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What will the day hold, dax, nikkei and ftse  looking to bounce up off the prior low, dow trying to get back up above the key support broken yesterday.

The H1 S&P below shows much as the others, a recheck of the pivot which is interesting, I normally expect continuation, today being the same as yesterday until it isn't and price just continuing to drift down but a return up to the pivot is worth noting. Anyway, whoever controls the pivot will attempt to move forward to R1 or S1 and the plan for day trades is to catch rides between levels.

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Ger, Swiss and French bank holiday today will affect dax spreads. US GDP at 1:30pm  3.1% expected ;

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Seeing as everything seems to be stalled waiting for it here is a closer look at the US GDP chart, note this is the annualized 'Prelim' q/q, last months 'Advance' GDP came in at 3.2%. (see FF notes below);

Data due out at 1:30.

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Jeff Gundlach made an interesting statement saying that US debt was up 6% and GDP was 5% so US Growth was -1%.

Without the debt expansion economic expansion cannot move forward.

At some point the tap gets turned off.

We could hit it very soon.

Prior highs at moment do not seem to be ready to be taken out.

 

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The main story of the day was gold and oil, they started out gold down oil up looking good for indices turning risk on but both reversed leaving indices stalled. The strong risk off move on the daily candles (gold up, oil down) also broke through short term support and resistance levels, so not surprising dow was unable to lift through 25214. 

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The indices took another knock overnight on Trump reasserting his plan to steadily increase tariffs on China while China reiterated their stance to protect their sovereign right to thieve intellectual property and bar the foreign companies from China that they want to copy the business model of eg Amazon. 

The moves in the markets are very much sentiment driven as US GDP, PMIs and consumer spending are all good while inflation remains low, for now anyway.

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Dow tags the Feb 8th low support (24877 blue) before the US market open, Week and month end flows today could be interesting.

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We may get a small bounce to around 25200 on the chart but I would be looking at 24500 then 23500.

If those do not hold we double bottom.

Stochs are way oversold but I do not believe that means a lot other than people are skittish.

On the options and commodities floor in the old days guys would ride in at the overbought and oversold levels.

They were doubling up on momentum. 

We could be in a fade the rally mode. Summer and earnings season could be hard for stocks.

I am not a perma bear for my portfolio I would like it to let up.

Also Italy looks rocky again and Deutsche Bank they cannot give the stock away.

When the German Government unite the two largest banks in Germany you know they are exposed to some pretty horrible loans. They are making new lows daily.  Dax below 50 dma lower to go.

Does this remind us of a particular time. I hope I am wrong.

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Hi @Bell

I Felt sure 11800 was the floor on the dax now I look stupid, this is not good for bulls. Sure I was selling the highs like a bear but I was following the correction at 11800 I turned Bull, more fool me!!!

Now we have to get back above 11800 to even think about a long.

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Hi @Foxy

I think we may take out the 50 dma to suck people in on the long side.

The technical will push a bounce.

Then some piece of news will draft this lower.

I think stock entry prices and exits will be easier than indices.

Get the direction right big profits will be on though. .. the moves should really trend.

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Saw a great tweet   - " Trump can remain irrational longer than you can remain solvent"

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EU PMI data drifting in throughout the morning today and US manu PMI at 3pm.

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A quick explanation of the histo/oscillator indicator on the S&P chart, the histo red and green bars is a smoothed RSI above/below 50 and the blue and yellow lines are a fast and slow MA of RSI. Signals are the blue crossing the yellow or blue bouncing off the yellow, also as per normal RSI a good divergence indicator.

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Some recovery yesterday but price is looking for sentiment rather than a level and the next meeting between the main trade war combatants is not til the G20 at the end of June.

S&P key level support below at 2721, currently 2750.

On the calendar this week is the ECB rate decision Thursday and NFP this Friday.

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"Good trading is built around “if/then” statements. Bad trading is built around “I think” statements. What you think simply does not matter. The market doesn’t care." - Tom Canfield

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The Fed steps in to help the markets signalling the Fed was ready to cut rates if warranted sends all the indices back up.

US non-manu PMI today at 3pm, forecast is 55.6. 

ADP nfp data today at 1:15 could hint to Friday's number.

The S&P leaves key support intact (2721) and looks ahead to resistance at 2840, currently at 2800.

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something to remember going forward ................

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Indices kick down on the ADP nfp employment data coming in at 27k instead of the 275k forecast, main NFP report comes in on Friday.

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ECB rate decision and mon pol statement at 12:45am and Draghi presser at 1:30pm today.

Dow and Dax heading into resistance with Ftse not far behind, seem to have shrugged off the very low ADP nfp number yesterday that's often a pointer to the big NFP data release tomorrow. Interesting S&P weekly chart with 2 trading days to go.

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NFP day today and it will be a bit nervy following Wednesday's disastrous ADP nfp coming in at 27k instead of the expected 275k, 180k is forecast for today. Average earnings and the % rate are also important so things could get very bouncy from 1:30 on.

Another blue day all round yesterday so expecting continuation until it's not, Dax having problems sneaking back into the channel and the ECB didn't help, Dow has previous highs resistance just overhead and Ftse needs to try to avoid a third point touch to confirm a downtrend trendline.

Let the games commence.

 

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Interesting one this, NFP was a big miss as the Wed ADP number predicted but the thing is the markets have already priced in the increased chance of rate cuts in the near future so the affect of the NFP today is looking somewhat subdued. There was talk that a big number could cause a hit on the market because it might reduce the chances of rate cuts.

Dax and Dow M30 charts;

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Fren, Swiss and Ger bank holiday today. UK GDP and Manu Prod data at 9:30. Dax and Ftse gapping up Sunday, closed the gap this morning and looking for continuation today.

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Coming up latter today I'll be showing you why you've been trading the Dow all wrong 🙂

 

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Guest Politica

news today is

  • By 5pm today we will have the full list of candidates to be the UK's next Prime Minister
  • Under the new rules, each candidate requires 8 MP supporters
  • Round 1 of voting by MPs will then take place this Thursday, 13 June, 10am-12noon. Result expected 1pm.

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23 minutes ago, Guest Politica said:

news today is

  • By 5pm today we will have the full list of candidates to be the UK's next Prime Minister
  • Under the new rules, each candidate requires 8 MP supporters
  • Round 1 of voting by MPs will then take place this Thursday, 13 June, 10am-12noon. Result expected 1pm.

Next PM odds from William Hill (in their popular markets section);

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"Coming up latter today I'll be showing you why you've been trading the Dow all wrong 🙂"

Profiting After the Market Closes

Since 1993, all of the S.& P. 500’s gains have occurred outside regular trading hours, which run from 9:30 a.m. to 4 p.m. Eastern time. 

Take a look at this chart from Bespoke as mentioned in the NYT article linked below.

SPY Returns: Owning outside vs. inside of regular trading hours ('93-present).

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Since 1993, if you bought SPY on open and sold on close each day, return would be a negative 5.2%, if you did the opposite & bought on close and sold on open next day, return would be plus 568%  (meaning that ALL performance came in after-hours trading) Source: @bespokeinvest.

https://www.nytimes.com/2018/02/02/your-money/stock-market-after-hours-trading.html

“We can show that the gap exists,” said Huseyin Gulen, a finance professor at Purdue University who has written about the issue. “But at this point we don’t know exactly why.”

"Buying and holding the overall market — using an E.T.F. like the SPY, or a traditional index mutual fund, or a very diversified portfolio of stocks — has been an extremely profitable strategy if you stuck to it for the last 25 years. On the other hand, buying and selling during the day has generally been a money-losing strategy — one that would have been far more painful if you had traded frequently, incurring steep costs, which would have compounded your losses."

 

 

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Isn't the best strategy just to 'buy and hold' and reinvest your dividends over a long period?

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5 minutes ago, dmedin said:

Isn't the best strategy just to 'buy and hold' and reinvest your dividends over a long period?

Depends on what you mean by 'long term', it's a good strategy but bear markets do come along occasionally (see pic below).

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If you had been lucky enough to put £10,000 into the SPY in 1993 and reinvest the dividends you'd probably have a few million by now!

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1 hour ago, dmedin said:

Isn't the best strategy just to 'buy and hold' and reinvest your dividends over a long period?

@dmedin

You are close but you still need to avoid this:

 

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you need to short this - without getting stopped out during bear market rally

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I was being ****'s advocate, the opportunities from being able to go long and short are obviously impressive. 

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