Oil Drops and Stocks Chop

Oil Dropped. There was a run-up last week due to bombing of an oil pipeline in Iraq.

I tried out the new feature in quotetracker today, comparing multiple symbols at once.Noticable divergences seen between financial and oil sectors. XLE was weak due to the drop in Oil and Financials provided support until the Oil complex closed.

XLE Chart

Comparing YM and ES against ER2. Noticable bullish divergence in ER2 mid-day that corrected before market close.

QuoteTracker Rocks

My Free Chart provider "QuoteTracker" just released some really Cool new features available in the BETA download.

Something we've all been waiting for-

Multiple symbols on the same chart, with dynamic or static anchor points (both intraday and historical charts). I can't wait to see what this will look like tomorrow. This will be a great tool to see stock correlations in real time.

Also, another feature is the ability to edit individual indicator parameters by just double clicking on the indicator legend on the chart. You all know this is going to save a lot of time from not having to open all the indicators at once.

Also Remember, QuoteTracker is FREE! And works with a ton of Brokers like TD Ameritrade and Interactive Brokers.

In other news, I've decided to not load an operating system with windows media center. I shouldn't be watching TV at my computer and I have tivo/DVR on my regular TV if I want to record something. I will be keeping the Windows XP Pro 64 Ed. I installed this weekend. So far no "blue screens of death".

PS.-I hate Vista

10K Thrown Away

My Trading friends over at 10K Thrown Away did an interview with TraderInterviews.

Update on CPU status-
With any luck, I should have my computer up and running by Monday.

I'M DONE WITH VISTA......



Picture of my CPU torn apart.

I switched the OS to Windows XP Pro 64 Ed. (Hopefully the 64 Ed. doesn't cause too many problems, ie other software providers not compatible with 64bit OS, no drivers etc.)

Next I have to put back in my nVidia card, TV card, and 2Gb of RAM I took out of the system.

I've always had compatibility problems with the nVidia card and Vista OS starting when I got this system(I made a video about the monitor flickering due to Vista). So hopefully switching to XP will solve this problem.

I think the cause of the BSOD may be due to bad RAM. I'm running on 2Gb instead of 4Gb right now with no problems yet. After I install the full 4Gb back in the computer I will investigate things and make sure nothings gone corrupt. (Note: go to- run, check- msinfo, check- hardware reseources.)

After Installed XP 64 Ed. and updated to service pack 2, my USB ports all stopped working. Apparently this was an issue that MSFT made a hotfix for. Anyway, I fixed the problem by un-installing SP2 and I don't plan on installing it ever again.

Lets see if I can get both monitors up and running now.

Thanks for all the suggestions and tips in the comment section guys.

On Hiatus

My Primary computer that I trade on is sick. I'm still getting the "blue screen of death" (BSOD) after trying to correct it for the last week. Reformated the hard drive, took out TV card and nVidia Video card, re-installed Vista, but still getting BSOD. I suspect I have a virus in the BIOS or some other problem that I've overlooked. It really sucks not having my comptuer running because I can't trade and internet surf.

Good Friday Links

Denial as trading motivation (Excellent article by Dr.Steenbarger -regarding traders in denial of trading with no edge and ways to help solve the problem.)

More links to come....

What if this is the bottom?

Lets face it. GS will never go down. As soon as the March Crude Oil contract expired, Oil dropped $10. Same thing with Gold. Meanwhile, the 2yr bond isn't any lower after the 75bp cut. The Euro has retraced and commodities are declining. Is this too good to be true?

What if-
Commodities deflate
The US dollar rebounds
The US stock market rallies
Bond Yields go back up

I'm looking at the 13 week treasury bill. This may be all time lows on it. Hitting a low of 0.20 today. If I could buy it, I would. What does this low on ^IRX mean? I have no clue, except that we may be setting up for a reversal. A reversal where bond futures retrace off there highs and the US stock market poses a bull rally of epic proportions.



HPT's word of the day-
EPIC- (definition)-
very imposing or impressive; surpassing the ordinary (especially in size or scale);

Used in a sentence- The decline in Gold the last 2 days has been of epic proportions

Holy $HIT GOLD....DROPPED!

Gold dropped 70 bucks today. It that the biggest move ever for gold?
I just gotta say, holy crap to that. The dow is up over 400pts yesterday and now down 300pts today. I told you that this market was going to go nuts the next 12 trading days. Just waiting for next Tuesday. Is it time to buy gold? Is this a massive shakeout of the longs, or is this the top?
I think the Euro is headed back up, and along with it gold is too. And I think the stock market is going down. I could be wrong on both. Time will tell.

March 18 FOMC announcement

Here's the video- The top right chart is the Euro, bottom left is ZN (10yr bond future), and the right chart is ES (SP 500 future).



Sorry for the High Probability Trading watermark, I should have made it more transparent but I'm too busy to go back and fix it.Unfortunately my computer got the "Blue screen of death" while recording, and this is all the video I was able to recover. The one thing I can take away from today is that Vista sucks.

Profit taking in Oil before expiration

6 dollar trading range on Crude Oil = NUTS



One of the dumbest headlines I've read in awhile-



Notice how the further out contracts are trading less then the front month contracts.
Interesting to note that USO options have a lot of premium built in to the options for the months ahead, which makes me think that there could be an arbitrage trade between USO and CL.


April USO options

Let the Madness commence...

This week will go down in the history books.

BSC being bought by JPM for $2 bucks. GS to announce big losses. Fed emergency rate cuts 25bp on Sunday night. Overseas market down over 3-4%. This is only the beginning.

This is the exact type of crap you would expect going into FOMC WEEK.

We are setting up for an extreme bear raid, but be careful of Bogus moves when OPEX approaches.

You have been warned.

Futures Rolloever

Time to Roll over to June month contracts and cut the March contract.

My simulator position is in the red because I didn't use 2 contracts on ZF as noted earlier. Interesting how ER2 has gotten support and lost the $1,000 spread with the ES hedge and has turned negative by about -$200.

Expecting havoc in the markets very soon.

"Expect the un-expected. "

"The only thing you can count on in these markets is uncertainty"

Yen/USD intermarket relationship

Daily chart view of Yen vs US dollar.
Overnight we made new highs, which caused some margin calls and a drop in Asian markets, with a setup for a gap down for US markets the next trading day.






US markets open, and resistance is seen in Yen and bond futures after a big run up. Profit taking in bonds leads to buying in US equities and a big
reversal after the DOW closes the day higher after
being down over 200pts in the morning trade.

Be Prepared for the worst the next 12 Trading days

Tomorrow looks like the markets could be brutal if your a bull in the stock market with the way the Asian markets are looking. Everytime you think the market is going to crash, the FED comes in and saves the day. I think the FED is out of options. We are in a bear market and traders need to accept that fact. Perhaps this is another setup by the powers that be, and next week we could see the bottom with the decision from the FED on interest rates. The 30yr bond is approaching Jan 23rd lows of 4.10% yield. The next 12 Trading days I expect to be VERY volatile . Every market is swinging all over the place, from stocks, commodities, to forex. What the FED does next week is huge and the market seems to be setting up for a big move. I think bonds will keep going lower in their yields until we get closer to next weeks meeting, which means weakness in stocks. Tomorrow should be an interesting open. There's a good chance tomorrow we could break through the January lows. It would be the ultimate scenario to have the markets looking there worst so that the FED could pull off another miracle right before options expiration.


Oil ($110 today)
Various other commodities hitting all time highs recently
The Euro at $1.56 to USD
Stocks approaching multi-year lows

You have a choice- To trade or not to Trade.
Remember those stops. Don't over leverage. yourself. Trade with a Plan.
Good luck.

One last note- Congress Weighs Budget Plans
"Democrats are backing twin $3 trillion budgets for 2009 that would produce sizable surpluses in a few years and provide generous increases for many domestic programs, but only by assuming major tax increases when President Bush's tax cuts expire in about three years.

All three major presidential candidates planned to be on hand Thursday in the Senate for votes on taxes, a one-year ban on lawmakers' pet projects and a vote to pass the measure late in the day. The House also votes on Thursday." By Andrew Taylor, Associated Press Writer

Oil Momentum pushes prices over $110

The idea seems that the run up in oil will continue until the March future contract expires.
"Oil prices actually fell after the Energy Department’s Energy Information Administration said crude supplies jumped by 6.2 million barrels last week, more than three times the 1.6 million barrel forecast of analysts surveyed by Dow Jones Newswires. But buyers quickly returned to the market."

Commodity prices and the Fed(good article by Econbrowser)

Second Chance at Life

Have you ever thought about the things you would do differently in your life if you could start all over again?

Become a Doctor or Pilot
Spend more time with family
Watch less TV
Eat healthy
Exercise more

What if this life was your second chance but you didn't know it?
Is it too late to start over?
Can you go back to school at age 50 to get that degree?

Ray Kurzweil thinks that if you can make it to 2023, you won’t ever die of old age.

"The closer we come to death, the more we appreciate life."

Hedged positions

Here's a trade I put on a week ago. It's been steadily increasing in Profit. I realize it's not a perfect hedged position. Short Russell 2000 with a long SP 500 hedge, and long 2yr notes with a short 30yr bond hedge. (I could have used 2 contracts on ZF to make the ZB hedge better balanced and put the position in the green by another 1k).

Scaling in on Trades according to Plan

To scale in or not to scale in, that is the question.
I can find good entries, but the addition of contracts to the original position is where I mess up a lot of the time. I notice I add to winners with buy/sell stops, but these adds are placed at bad places because the majority of the adds occur on price spikes. After the add to the original position has taken place on a price spike, the trade retraces and the trailing stop is hit, turning a winning trade into a breakeven to losing trade. This brings up the question, to scale in or to scale out of the trade? I say, only scale in if the trade is giving another signal. Don't scale in just because the trade is a winner and looks like its running, because many of these "runners" occur during price spikes and will likely retrace and bring your average price on the contract down to breakeven or even losing.

Here are some examples-

Good trade gone bad by adding at the wrong place-



Good trades following the plan-



My trades-

The Chop continues

Themes this week= Buy the close.

Gold to $1000 by weeks end?

We're at $982 as I type right now on Monday morning. With the weakness in the US dollar and the momentum driving commodities up, you would expect to see gold go to $1000 very soon.

Weekend Wondering

NRG, Bullish speculation in the calls?



Looking at XLF options, resistance seen above-



Time to buy INTC ?



Another Yahoo sentiment poll, this time the US Dollar.



Funny, The dow is down over 300pts and the last news article says
"FDA ok's new anti-depressant".




The Plunge Protection Team