Weekly Piece first edition!

Weekly Piece first edition!

After 17+ years in trading and 15+ in trading education area, here comes the first piece.

Actually, the first blog piece. The educational pieces are not ready yet. Until they are ready what we are going to talk about? You’ve got that right it will be about trading.

So 17 years, that’s a lot of time and certainly a lot of new all-time highs for S&P500. I wish somebody told me the following when I started “Ah! Trading ... just buy some stocks and wait for 17 years.” That’s a lot of money.

And right now we are there again, at all-time highs for some of the US indices. And the question comes what’s next? Recession, global crisis, end of the world? With the latest unemployment figures, with the current yield curve and interest rates, I don’t think so. Actually, I will write some blog pieces about recessions and will explain my ideas about it.

Now let’s focus on the present market state.

Since we’ve stated with S&P500, I would like to mention that currently, the only disturbing thing (excluding the forever-taking US-China deal) is the little short-term divergence with VIX. The E-minies> are closer to the top than VIX future is to its bottom. We are in May and what to do in May if not sell and walk away :) But in a good year like this you don’t want to sell. So what do you do? Buy insurance, which is VIX. That explains the short-term divergence, especially when the liquidity is not being troubled at the moment.

Can we go higher? Wouldn’t it be very brave if, in my first blog piece, I say we are going higher? Probably viewers will hate me just because I do not talk about the coming end of that bubble. However, going higher is what my work suggests, and that is what I will try to do in the coming week – to find a good entry point.

If you are like me, and you missed the Friday’s breakout where you’ll enter the market? Here is what I’ll do. Most probably Monday will be an inside day or at least will have a decent pullback toward Thursday’s high or even Friday’s low. That’s where I’ll be looking for the magic to happen and will search for an entry in a pursuit of new highs.

Besides that E-minies stuff, I will look for the Japanese Yen future to go higher. If you are a Forex trader, it is the opposite - the USD/JPY to go lower. Check the next chart of JY futures. For the seasonality, credit goes to Larry Williams.

Japanese Yen futures

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So much for the first post. See you in the next weekly piece!

Let's find your missing piece!


Trades mentioned here are either taken or will be taken if the right conditions appear. They are NOT recommendations nor investment advice. Please read the Risk Disclaimer

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