Chicagostock Trading

Chicagostock Trading

Pulling the 6.5% NFP Target

Since the December 2012 FOMC statement adding the 6.5% unemployment target to the fed funds rate:

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Bonds, Gold, and the Yen (BGY), all front ran the FRB NFP target, moving down heavily for the year 2013, while the SP500 moved up 33%.

 

In 2014, just as the NFP target reached 6.7% to near the 6.5% target, it was pulled.

Year to date for 2014:

Bonds, Gold, and the Yen, working against a major downward trend last year falling an average of 20.3%, all started the year of 2014 on the lows and grinded higher. This reversal for 2014 is counter to the 2013 trend, however is the way of the market completing its front run into 6.5% target.  The SP on other hand, coming off a +33% move in 2013, has held flat for 2014, threading on the highs, fighting to hold its trend versus what bonds/gold/yen are doing.  The SP is also needing to take a lot of juicing at these levels as the FRB chair came out on the 31st of March to reassure investors of continued support, WHILE THE MARKET WAS AT ALL TIME HIGHS! Seems to be the last leg of longs are being lured into the market and we did see since March 31st the market ran 20 handles higher into 189250 only to fall 90 lower.

 

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Thus far both of the last 2 NFP reports turned out to be the peak highs of the year and provided great trading opportunities. Join us for next NFP report by subscribing today.

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DAYTRADING SP500, CRUDE, GOLD WITH CHICAGOSTOCK MONDAY 04/28/14

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DONE BEFORE THE OPEN

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Coming into this week, tax day and a shortened holiday week was tricky. We had FRB chair pump the markets end of March into new highs reassuring investors of continued stimulus, only to see the NFP numbers double top the market and the rally get sold into.  The selling picked up with the March lows taken out, confirming a short term double top as it shook out longs and left buyers from the "stimulus" talk trapped.  This led to a breakdown on Friday with lows of 180725 going into the weekend.

 

On Friday our systems triggered many buy signals which gave opportunity to collect up to 32 handles from base hits during the day, however the market remained weak on Friday. Settling near the lows, this put pressure for a flush to take place going into Sunday. This was seen Sunday night with new lows down to 180325 before reversing higher. This triggered new buy signals at 180650 with a 5 handle stop for aggressive buyers.  Going into the cash open, the market had retraced up to 182375 allowing to lock in majority of profits and allow runners to work for a day on cruise control. The cash open was followed by profit taking seeing the market fall into lows of 181550 to allow intraday buyers an area to defend, which they did and pushed the market up to highs of 182800 to test the upper vol window. Profit taking led the market to run out of gas and see a shake down into the afternoon, falling down to 180825 to retest the overnight lows before seeing a squeeze up to settle at 182450.  Flushing intraday buyers, luring in shorts sub 1815 and squeezing 10 higher.

 

Monday 04/14/14 reversal off lows:

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CST aggressive long signal @ 180650.

Target 1 181150, Target 2 181650 completed prior to the open to lock in 15 handles with runners. Target 3 was scaled at 182650 to lock in 20 handles and leave 1 contract on with a 1814 stop. Afternoon attempted to buy 4 more at 1818 only to see the market dance at the level too long, in turn scratching the position at 1818. Flush kicked out the overnight 180650 runner at 181400. On 6 contracts, 57.5 handles locked in. If one only bought 3 contracts @ 250 risk each total risk of 750, would have allowed to take tgt 1 181150, 2 181650, and 3 at 182650 to lock in 35 handles.

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DAY TRADING TODAY'S DOWN TAPE

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Buying the SP500 today with the market breaching the March 182350 lows to open at 1816 was not an easy task, nor was it impossible. The market provided opportunities intraday for longs to defend. The cash opened at 1816, followed by a squeeze through 1821 to establish a bullish intraday bias which was followed by a shakedown to the reversal window at 181275, offering buyers an opportunity to defend.  This new low and test of reversal window failed to continue lower, seeing a squeeze back through session highs and up to 182850 to test major resistance off the overnight highs of 1832. Failing to get through, the market retraced lower to retest the 181275 session lows which was followed by a small bounce up to 181950. This bounce failed to push through resistance and regain above 1822, seeing sellers take control (read post: Running out of buyers?) and take out the session lows to fall into 180725, squeezing out session longs and luring in late sellers below 181275.  This new low was followed by a bounce up to 181650, once again failing to push through resistance before falling back to 180950 into the close and settling at 181175.

 

With the market settling 15.50 handles from Thursday's close, actively day trading the SP still allowed to collect 32 handles on all LONG trades.  It is always more aggressive to go against the tape, however if risk is defined and reward opportunity is healthy, a day trader can trade any tape long or short.

Below is the AIM feed sent out to Chicagostock members.

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DAY TRADING SP500'S DOUBLE TOP

Both peak highs in 2014 were made on NFP days and only 1 month apart. 

Below are videos on Chicagostock's day trading signals

 

Trading March 7th Non Farm Payroll Number:

 

Trading April 4th Non Farm Payroll Number:

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