“When emotions interfere with performance, you’ll often find evidence of inadequate training. Psychological assistance can aid the performance of a well-trained professional, but does not substitute for thorough training.”
Dr. Brett N. Steenbarger
Enhancing Trader Performance
Crude oil has been trading in a tight congestion pattern lately and it's starting to look like a coiled spring that is about to explode. I've been hearing some chatter lately about oil getting ready to move, etc., etc. There are also some analysts saying that OPEC cuts are going to lead to a short term rise in oil. Anyone who reads my blog knows that I don't care about chatter or what analysts tell Bloomberg, I care about the current chart pattern. Here's a daily chart of oil:
As you can see, there is a congested trading range (the light rectangle) and within that range a wedge of some sort (I can never remember all the technical names for different wedges and triangles) is forming. I think a strong close above or below one of the yellow lines will be the signal to look for and by a strong close, I mean a candle that is much longer (bigger range) than the recent candles accompanied with a close at the high (for a bullish break) or low (for a bearish break). 
Note from the above chart that the trender lines are giving a sell signal and that the fisher trasform (one of my favorite indicators) is giving a sell signal as well. I'm not saying to run out and sell the kiwi short but, it seems to be a pretty good trade for the time being. If you do choose to take a position one way or the other, just remember that Forex offers a substantial risk to any individual trader. Please take care when making trading/investment decisions.
I'm not a big fan of the stimulus packages either but French citizens are taking it a little too far in my opinion. Striking...come on! Do you really think that will help....really? Check out the full article here."Hundreds of thousands of strikers marched through French cities Thursday to demand pay rises and protection for jobs, challenging President Nicolas Sarkozy to do more for ordinary workers."A good attempt, but...
"...the one-day strike failed to paralyze the country and there was little evidence of huge support from private-sector employees."Sounds like the French government employees just wanted an excuse to socialize in the streets for a day. Good for you guys, keep up the great work.
I'm still short the pair because my daily trend following system is giving the short signal for the Eur/Usd but it appears that a buy signal is not far away if the current rally continues...note that sometimes this situation (i.e. having a signal in one direction but being on the brink of change) provides a great low risk entry in the direction of the primary trend.
On a different note, I have downloaded and started playing around with Ninja Trader recently. This is an interesting platform that allows for free advanced charting and trading simulation. I'm mostly interested in the simulation trading. You can trade actual back data as if you were in real-time and you can also trade randomly generated data to hone your trading skills.
Iceland's government bites the dust, according to this Financial Times article:Iceland’s government collapsed on Monday, becoming the world’s first administration to disintegrate as a direct result of the global financial crisis.
The demise of the two-party coalition forced Geir Haarde, prime minister, to resign with immediate effect and left the country without a government amid its most serious economic crisis in recent history.
Certainly looks like a flight of capital to me. Stay tough Iceland, hopefully things will get better for you soon.
TLT
"To change emotional responses takes constant self-awareness, time, fundamental personal honesty, and the willingness to suffer the pain of letting something go that we feel is dear to us."
On a different note, gold is continuing its rally and the dollar continues to gain on the Euro...it will be interesting to see how low the Eur/Usd pair will go.
Guys, you can keep emailing me, but I think you would have gotten the message when I failed to respond to the first 15 emails. Now, I'm actually contemplating responding to the next email I get just to see if I get there hopes up. Also, most of these emails ask you for a phone number...boy it's tempting to email them someone's number just as joke. I don't know if I'll do any of that but I sure find these scams humorous.
Fortunately my Eur/Usd short went as planned and the dollar is continuing to rally against both the Euro and the Pound. For now, I will stay out of Gold until it calms down. As a rule of thumb, I get out of a position when I am confused by the instruments price action (like the rally in gold). If traders fade this breakout, which is tempting but very risky, and gold falls back to the 840's, I will probably put my short back on. 
(*I meant that the stoch is over bought)
Notice that all the same signals from the Gold chart above are also giving sell signals in the Eur/Usd pair. This tells me that I should definitely hold onto my short gold position, as well as my long dollar position. Although there is some doubt as to wheter the Israel/Hamas war will end, the price action tells me that gold is heading lower, indicating that there will be peace in the middle east...for now. Like I always admit, I could be wrong and that would not be anything unusual. That being said, the technicals on the dollar seem to be getting stronger while the technicals on gold seem to be getting weaker...i.e. short gold and buy the buck. At least that's been, and will still be, my trading strategy until the market tells me otherwise.
“If the markets have a reality all their own, then the reason so many people fail is because they refuse to find out what that substance truly is and adapt to it. Market reality must be something so completely unpalatable or unacceptable to most people that they would rather fail at trading then embrace it. Of course, that is exactly the case. The true reality of trading and the markets as a whole is something that most people would rather die than accept.”
As you can see from the chart above, there was a pretty good opportunity to squeeze a few pips out of the pair after the retail numbers...although I'm still short because I still think the primary trend is down and it probably has several hundred more pips to go. 
As you can see from the chart, the OBV is still trending up and the BB Width is still low. Now I would like to see a breakout above the short term resistance (see the red line on the chart) with a higher high in both the OBV and BB Width. 
Okay, so I see the narrowing range and I hear that the unemployment rate will be worse than expected, (which is humorous because it is actually expected if it's being broadcast on CNBC) now what? If the street is expecting a bad number, then the pros probably know that the amateurs will think that the dollar will surely fall if the unemployment number is so bad. This is were the "head fake" comes into play.
Notice how big the candle is for the minute that the unemployment rate was released. My stop was almost hit with the initial dip but then the pair quickly rallied in the "dumb money" direction and most likely took out lots of stops. To exit I use the 1 minute chart and I exit immediately at the first sign that momentum is waning. For this trade, the signal came in the candle after the release...the pair stop rising and then fell below the close of the prior candle...and I jumped ship and starting looking for a good entry in the opposite direction.
As you can see from the above chart, the Eur/Usd kept falling after the release which provided a good trend trade. 
"Human emotion is both the source of opportunity in trading and the greatest challenge. Master it and you will succeed. Ignore it at your peril."
A couple of noteworthy factors in the above chart are the up-trending on balance volume that is setting new short-term highs, the higher moving MACD and the low level of the BB Width. It would be nice to the BB width breakout and start making new 2 month highs. If I were going to play this stock here, I would either wait for a pullback and buy a new breakout, or buy half my position here and then wait for a pullback and then a subsequent breakout to add to the position. With a strong trend in place along with good relative strength, ARA is certainly worth keeping a close eye on.
I have numbered the various factors that I look at when entering a trade.
As you can see, I exited short of my profit target but I did manage to book 57 pips of profit. The reason for my bailout was a spike that formed on the 5 minute chart followed by weakness in the bar after the spike. In this case, the currency pair continued to rally after a slight pullback but like I said, I tend to get nervous on the counter trend trades. In the future, I'll have to make following my predetermined price targets and stop signals more of a priority...always good to know what specific areas need improvement. 
As always, only time will tell with this stock, but at least for now it looks like there might be a promising trade with this stock.
