Hit the Mark Trading’s Brief Review of Overnight Market Action Setting the Tone for the Trading Day
Good Morning Traders! Short and sweet…all markets trade very tight today. This is a great reminder of how seemingly un-correlated markets are actually connected…and today Yellen holds the key for price movement.
Yellen’s comments, we are told, are not televised and there shall be no question and answer session. Unless this changes, the media will rely on reporters in Jackson Hole conveying speech components. We could be in for a big "no never mind" speech. However, traders…being traders…are like a herd of wildebeests.
St. Louis FED Bullard contributed nothing to the party with his comments on potential FED rate increase this morning as Reuters reports:
(Reuters) – The Federal Reserve could hike U.S. interest rates this year, St. Louis Fed President James Bullard said on Friday, noting the central bank would have to watch out for risky financial bubbles emerging in technology stocks and elsewhere in the market.
"I’m agnostic on when we do that," he said on CNBC from Jackson Hole, Wyoming, adding "we could" hike rates this year. Asked about financial valuations, he said: "We’re fairly valued or on the high side of fairly valued, and I could see the process getting away from us, maybe tech stocks, maybe others."
Let me remind you, Bullard is a very minor player at the FED, but Wall Street loves a shill. For this reason we have to pay attention to his vacillations on FED policy.
Price action, being the psychology of the market coupled with a skittish herd behavior insures a reaction even if Yellen recited the opening lines from a nursery rhyme. This is how powerful the FED is to markets.
We have second estimate of GDP today. Unless this estimate shows an unexpected variance to first estimate, I would expect "no never mind" reaction.
Our copper trade wonderful. I have suggested anyone that has not taken profit to consider a partial then move protective stop to 210 for remainder. My concern is a market wide Yellen rally. Remember…anything can happen. Profits as of yesterday $1700 per contract.
At 7:45AM ET yesterday, nightly video clients received an email suggesting a November Soybean short based on signal trigger. The market moved in our favor, as expected, generating $1,000+profits. Like copper, I suggest taking partial profit. Anytime a 20 cent move is made in the grains, this is a gift. Runners, I suggest moving protective stop to break even.
It is one thing to follow signals…yet another to actually learn how to call these trades yourself. This is what the Boot Camp is all about.
I’d like to leave you with comments from a dear friend,Forex trader and an informer of mine…the "Pound Whisperer"…here are some of her comments from yesterday sent to the traders at the bank, where she works…
"Very significant article in last night’s Standard – not typically the place the Economic Gurus of the world tend to spread the gospel – but telling that the thoughts of the Chief Economist at Oxford Economics are in line with almost everyone else I’m hearing….”WHAT DOOM & GLOOM?” has gained momentum and the mindset of the Country is being forced to reconsider pretty sharpish – if it hasn’t turned already.
I DO expect a sharp downturn in UK Retail sales and CBI Realised Sales in sept. Manufacturing should be poor in August. Construction could be unexpectedly good. Unemployment will be better than expected for August – a slightly worse than expected figure in Sept.
My mate from Florida and I stayed at a hotel on Park Lane last week. Out front was room for 10 or so cars .They were all Mclarens, Lambos, Ferraris and they all had Qatari number plates. I spoke to the doorman and he said they were all in for three months.
We went shopping along New/Old Bond street/Knightsbridge/Sloane Street….chauffeurs were waiting outside every boutique. All weekend. RR Ghosts and Phantoms (one very nice metallic pink….) all Qatari number plates.
The Grosvenor House is now the new Park Lane Mosque….. 428 rooms ALL booked. ALL Summer.
The ONLY reason I can see for the sell off on Cable (down 40pips here) after the CBI realised number – is squaring ahead of Yellen. A couple of weeks of unexpectedly GOOD GBP numbers and a change of mindset. Lightbulb moment.
I think the market knows that IF tomorrow/Sept is a NO hike, the USD comes off and that leaves the way for Cable to get up to be where it should given the positive stats. So we get out of all positions today ahead of a cable buy during Yellen’s speech on a strong indication of where she’s setting her stall out."
GDP 8:30 AM ET
International Trade in Goods 8:30 AM ET
Corporate Profits 8:30 AM ET
Consumer Sentiment 10:00 AM ET
Janet Yellen Speaks 10:00 AM ET
Baker-Hughes Rig Count 1:00 PM ET
Everything…across the globe…all markets…moving incrementally. Professionals are afraid of buying and afraid of selling until the Yellen factor is known.
Think About This!
Good bye August, you are almost done.
To learn more from Martin, visit HitTheMarkTrading.com to join his mailing list and receive blog updates.