+FASTMKT>> FOCUS

July Silver

2011-05-05T11:00:00.000-07:00

In the past, I've warned that the market liked to go after stops and July Silver (SIN1) had a huge amount of them in the $40.49 down to $39.22 area. I left out that when there's a huge amount of them very close together, they usually get taken out rather rapidly, like a giant swoop. EXACTLY what happened, the July Silver starting the day at $41.66 and then trading down to $38.94. A big move if you're trading commodity futures or options.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE.

Although looming, the row of stops I've mentioned from $38.15 down to $35.50 may not be hit for awhile. I'd say there's is a good chance the Gold and Silver may pause here and head back up. Some sources that I have great respect for are suggesting the Silver is now ready to give $50.00 a whirl as its next objective. Trying to find a spot to jump on a trend is not my style, so I'll probably just watch it go up.

Can't wait to hear the spin/excuse/reason in the next few days for why it's all of the sudden going back up again.

The June Gold 1510 Put I suggested buying at 7.30 has now reached my objective. Looking to for a fall from the 1577.0 area to somewhere near 1500.0, the Gold has traded as low as 1505.50 today. The option made it as high as 24.00. I like short term option trading.

For most traders, these conditions are too volatile to trade futures.

This fall in the metals was very predictable if you use the right indicators.

After making new highs, the Swiss and the Euro fell considerably.

THERE IS RISK OF LOSS WHEN TRADING FUTURES AND OPTIONS. PLEASE SERIOUSLY CONSIDER YOUR FINANCIAL CONDITION BEFORE TRADING IN THE COMMODITIES MARKETS. COMMODITY TRADING SHOULD BE DONE WITH RISK CAPITAL ONLY.

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Gold Put Results

2011-05-02T07:22:00.000-07:00

Hello All,

A Magical Moment happened with the trade I suggested on Friday morning.

+Buying June Gold 1510 PUTS @ 7.30>>

If you had/put your order in with the pit, it wouldn’t have been filled because the June Gold futures (GGCM1) hadn’t rallied high enough by the Option Pit close. Traders with orders entered electronically (would) have been filled at 7.30, with the Electronic Options Market having traded as low as 7.00 on Friday’s late trading.

As I write this on Sunday evening, (as anticipated) the gold has made another high over Friday, topping at 1577.40. And, -has now fallen $34 dollars off its highs to 1543.50. The race to the downside is on! Anyone that was lucky enough to have their option order in (in advance), may likely wake up to a $500 profit per option on Monday morning. Not a bad 1 day option trade. I suggest that traders lucky enough to be in this position exit ½ of their position now, and wait to see if we will test the 1510.00 area, where they can exit the remainder of their positions.

People that had open orders for the pit may go hungry on this one as the Gold seems to be falling like a boulder off a cliff.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. THERE IS RISK OF LOSS IN TRADING FUTURES AND OPTIONS.

Here’s a picture of one of the biggest one day falls I’ve seen in a long time (if ever). Daily bar chart below…

Even better, below is a 30 min. bar chart.

*Futures and Options trading should be done with Risk Capital Only.*

Monday, I will be looking to SELL into rallies in the Mini-S&P, Crude, Swiss Franc, Euro Currency and Aussie Dollar for short term trades. Contact me if you’re interested.

Please consider your risk tolerance for investing or speculating, along with a realistic assessment of your financial condition before trading in the futures and options markets. If unsure, please consult a qualified commodities broker for advice.

It’s best to call me on the telephone.

(888) 919-0444

Buying Gold Puts

2011-04-29T05:59:00.000-07:00

Hello All,

I am anticipating that the Gold and Silver will rally to new current highs on Friday and then have one more move above Friday in order to knock out any stops that will inevitably be there. Once that happens, I expect a pullback of decent magnitude toward the 1480.00 area in June Gold (GGCM1) and the 42.00 area vs. July Silver (GSIN1). My projections have all this happening in a span of about 3 - 5 weeks. Expecting a rally, I will look to buy put options at a cheaper price than they are now.

Tomorrow, I will enter Open Orders (GTC) to BUY JUNE GOLD 1510 PUTS at 7.30 ($730 bucks apiece) expecting the order to be filled sometime Monday morning.

WHEN TRADING OPTIONS, THERE IS RISK OF LOSING THE ENTIRE OUTLAY TOWARD YOUR PURCHASE.

I will follow with an option strategy for Silver after a few more calculations.

Also after a few more calculations, I will be coming up with some prices to sell into a new high rally in the mini S&P (ESM1), June Crude Oil, and assorted Currency futures.

TRADING IN FUTURES AND OPTIONS SHOULD BE DONE WITH RISK CAPITAL ONLY AND SHOULD NOT AFFECT OVERALL LIFESTYLE SHOULD LOSSES OCCUR.

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Sniffing Around

2011-04-12T08:14:00.000-07:00

Hello All,

The May Crude Oil did the basic “sniff” above the highs (of Friday) for stops, then promptly yielded to the gravitational pulls of the moving averages, falling way off its highs. I wouldn’t be surprised to see the mkt sniff around for some sell stops down in the 108.25 to 107.50 area.

I will not chase the market down, no matter how appetizing the downside looks. I will only look to sell (short) new highs at this point around the 114.57 area.

(Below) The Aussie Dollar did some sniffing of its own, then promptly retreated with the Crude. These two markets were way overbought by the close on Friday.

Below are two DAILY bar charts for May Silver. One expanded, one contracted. Notice the RSI hitting 90 on the first chart.

Typically when you see a reading this high on a daily bar chart, the market is moving up with such a vengeance that some might even term it, “outta control.” At this time, some might say to themselves, “Wow, I know its gotta come down sometime, I just don’t know when.” The futures could be brutal in a runaway market if you tried to get short. However….

Rather than focus on how far it could go against you, focus on how long it may take to get back down to the moving averages, “where it’s supposed to be.”**

Markets that climb at a sharp rate / angle on the charts often reverse and come back with the same magnitude. Said another way, The angle a market goes up is often followed by a move in the opposite direction with the same magnitude. Another way, A sharp move up (like a spike) is often followed by a sharp move down. The (4 hour) bar chart below is an example.

Past performance is not always indicative of future performance.

Angle up, followed by (same) angle down.

If a market is on a straight up tear, look at it in terms of, ‘How long can this <foolishness> last?’ Look at it in terms of time. One, two, three more days? Straight up? (One two, three more <bars>?)

If the market spikes, it will be coming down with the same velocity that it went up. Observing the chart, we have moving averages that are 3 dollars below where the market was trading. (39.00 area) If one were to use that as a target, start to calculate and consider:

A three dollar drop in Silver should be enough to shake up some put prices.

Look for an option that will increase in value (to your satisfaction), with a move two-thirds the way toward your objective.

A “close to the money” option running between $1,000 and $2,000 should give you the bang for the buck / a decent delta your looking for if a sharp move in your direction occurs.

Just like today in the Silver. At highs in the 41.00’s this morning May 39.00 puts could be bought for about $2,000 (40 cents) and have quickly gained in value do to the sharp move to well beyond 49 cents ($2,450.) Not a bad day trade, and with an option at that. (Remember, futures were too risky)

Didn’t hurt that the RSI was up around/at 92 when the options should go on.

There are good times to use options rather than futures. Friday or Sunday night was the time.

Look at a weekly chart for an indication that an option may be in order.(Below)

Lotsa potential to the downside if you look for the Silver to retreat to its moving averages. Bulls better look out below.

(Below) Daily bar chart for May Crude.

Same story in Crude. Buy a PUT OPTION when the market is almost heading straight up and expect in a few days (or less) it will find its highs and retrace at the same angle. Options give you time without necessarily putting you in such unbearable pain that you get knocked out of the market, like futures.

If a market breaks up sharply, followed by sideways trading, it is a signal to cut out quickly and minimize losses. (Bull Flag formation)

Future and Options are Risky and Not Suitable for Everyone. Carefully consider your risk tolerance and potential for adverse market movement before entering ANY position in the Futures and Options markets.

**The market is never “supposed to be” anywhere.

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"High, Ho Silver!"

2011-04-05T06:55:00.000-07:00

It looks like the Aussie and the Canadian weren’t too interested in hanging around the highs once they rallied above Friday. Selling to a buyer that’s so late to the game that he has to get in on Monday, has its benefits. In “overbought” territory, once these two made the new highs they were looking for, it was “So long Sally” to the downside.

As I write this, the Aussie has dropped 81 ticks from its highs and the Canadian 77. They're probably not done yet, either.

Below is a 30 minute bar chart showing what the Canadian Dollar did once it made its highs for the day.

Both Aussie and Canadian are worth $10.00 per tick, per contract traded.

I suggested selling into the rally, please be aware that rallies can travel much farther than anticipated, and cause significant loss if not planned for or monitored closely.

Nice uptrend for this daily bar chart of May Silver. (Below)

Thrill-seekers with a lot of money might consider shorting the 38.895 area looking for a correction back down to the 38.505 area.

I’m suspicious that the market might pull a fast one and turn around (back down) in the 38.730 area, but I’ll stick with my price for now.

Actually, I’ll add a level. I like shorting the market at 3909.5, for a decent correction (probably into the 38.70’s). I would be semi-surprised if we can reach this level on Tuesday, but if we do, I wouldn’t be surprised to see the Silver trade lower, soon thereafter.

DEFENSIVE TRADERS- My suggestion might be shorting the May Silver at 39.095 with a downside price objective in the 38.70’s somewhere.

Silver is a very risky commodity to trade. In this environment, these Silver comments should be more for amusement / observation than actually taking a position. The Silver market can explode with nothing on its mind but “death and destruction” for those that are going the wrong way.

Commodity futures and options should be traded with risk capital only. One should carefully consider the environment and volatility of the markets they are trading in before committing real funds to a position.

+FASTMKT>> ACADEMY

Don’t chase the market at new highs or new lows. Typically the only people that are joining you in that trade are those that are stopping out because they <messed> up, or late birds that are late to the game.

*Late to the game- Usually lose.

*Stopping out- Already lost.

Please remember that there is risk of loss in commodities trading, and one should carefully consider whether they are a suitable candidate for the futures and options market.

Success be with you.

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What's HOT!

2011-04-04T08:21:00.000-07:00

For those of you interested in the stock market, I feel like the mkt is going to climb past its former highs. Once above there though, the mkt will become “overbought” on the short term and will offer a great opportunity to short against some Super-Late-Market-Chasers. Buying new highs might work out good in the long run, but usually the initial move after you chase it…. is against you. Below is a daily S&P chart.

Therefore, I will look to short the Jun E-mini S&P (ES) at 1339.75 with a price objective of 1320.50. This trade is contingent on the RSI having a high reading on a 30 minute bar chart. If the RSI hasn’t climbed high enough when we’re at 1339.75, I will focus on shorting in the 1353.00 area.

Be especially careful. In these times, there could be a giant gain in confidence in the Administration (hahaha) and the mkt could go up. There is risk in shorting the mkt in this condition, however I think if you take a little from any “haircut” the mkt chasers get, I think it will turn out well for a short term move.

Don’t forget, we’re in an uptrend, you could lose.

On to what’s HOT,

Cocoa fulfilled its duties and sprung back from whatever lows we were predicting.

Cocoa- Daily bar chart

Sorry for the miss in posting, the move was exciting (money-wise at least).

Crude is entering overbought territory again. I will be looking to sell into a new high on Monday. I like the 109.67 area for now, but may have to revise my price (lower) on its first bid higher if we don’t see big volatility Sunday night.

Same with the Euro, Australian and Canadian Dollars. I will wait for Monday’s US trading hours before considering a price to sell into a rally. Short term trade only.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE.

There is risk of loss when trading futures and options.

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Cocoa & Sugar

2011-03-30T17:23:00.000-07:00

Hello All,

May Cocoa – Daily bar chart

Above is what we call vicious stop loss selling. Now the May Cocoa is venturing into short term “oversold” territory. I like beginning to scale in buy orders starting at 3027. With an upside objective of the 3068 to 3088 area. A second position might be considered at 2981, should we see it.

Cocoa’s long term objective may be the 2800 area but I think we’ll see a decent upside correction first. Maybe even a little sideways chopping before it attempts the 2700 to 2800’s made late last year / early this year.

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE.

I suspect Sugar will be following Cocoa’s lead shortly. (heavy stop loss selling)

Afterwards, I will consider buying the May Sugar underneath 2512, perhaps the 2491 area, looking for an upside objective of 2549. Should we see it, a second position might be added at 2449, looking for an even sharper snap back to the upside. Once long, I doubt if we’ll see 2449 before we see 2549 though.

If the market moves down slowly these prices may change.

AGAIN, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE.

YOU CAN LOSE MONEY ON THIS TRADE. A SUGAR CONTRACT IS $11.20 PER TICK.

Crude may have found a short term bottom at 102.70. Look out above! Too late to get in though, the mkt’s jumped 200 ticks from there. (you’d be chasing the market)

On the Horizon: S&P, Canadian Dollar, Aussie Dollar

+FASTMKT>> ACADEMY

When initiating a position…. Basically, You Want to be Buying from Someone who Shouldn’t be Selling, or Selling to Someone that Shouldn’t be Buying.

Go figure.

THERE IS RISK OF LOSS IN FUTURES AND OPTIONS TRADING.

Trading should be done with Risk Capital Only.

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Aussie Results

2011-03-29T10:29:00.000-07:00

For those of you that were lucky enough to catch that high I was talking about last week (shorting the 102.23 area), the Aussie has fallen from a high of 102.19, to a low of 101.38 as I write this. Don’t hesitate to book the trade, sometimes I miss my prices by a few ticks.

This is how it looked on a 30 min. bar chart.

Didn’t spend much time up there. (Better get your orders in early.)

When selling, always put your price below a “round” number.

Below is a daily bar chart.

New high, closed lower. I think they call that a “Key Reversal.”

**Past performance is not necessarily indicative of future performance.

+FASTMKT>> ACADEMY

Don’t push your luck on trades. If you have a nice profit for the day, book it. Have a rule of thumb where if you make a certain amount within a certain amount of time, you just book the trade and say, Thank you very much!

THERE IS RISK OF LOSS IN FUTURES TRADING. EVERY TRADE IS NOT PROFITABLE.

Just a thought: One of the things pushing the Japanese Yen higher (and the Aussie Dollar for that matter), might be the need for their currency to be strong do the fact that they’re going to have to buy a lot of goods for repair, etc. from around the world. Their strong currency will make things cheaper.

On the Horizon: Sugar, Cocoa

***Futures and Options Trading is Risky and Not Suited for Everyone. Trading in Futures and Options should be done with Risk Capital Only, and Should Not Affect Overall Lifestyle should Losses Occur.***

P.S. Ending this blog, I see the AD has just taken out the price objective I spoke of last week. (101..32)

Past performance is not necessarily indicative of future performance.

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Short the Aussie

2011-03-25T08:36:00.000-07:00

Hello All,

I like shorting into the current June Aussie Dollar rally in the 102.23 area, with a 2-3 day downside objective of the 101.32 area. In my opinion, the AD has ventured into short term overbought territory and new recent highs are good for selling into. Short Term Swing Trades Only.

A small Daily Bar Chart below….

If you’re trading, use a prudent stop loss. There’s risk of loss in this trade. Past performance is not necessarily indicative of future performance.

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