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It’s that time again! It’s Fed week. These meetings are getting more interesting as the Fed continues to talk about raising rates. Rate changes will send ripples through the market if and when they come.
The USD continued its MTPredictor wave 3 rally and is very close to the bottom of some major DP resistance. This is a make or break area for the Dollar. Corrections should come in a wave 4 pull-back.
Stocks are extended with the NQ and YM in weekly wave 5’s so corrections will not be a surprise from these levels but the Fed may have a lot to say about this.
Gold and silver are heading toward their wave 5 targets to the downside but are also a bit extended. Gold has come into some weekly DP support. Silver has a bit more downside before it will come into some weekly DP support. Below these DP levels are the wave 5 targets.
Check out the rest of the analysis in this weeks MTPredictor Weekly Market Update.
MTPredictor runner up 2011 Readers' Choice Award for best futures trading system.
-Read the MTPredictor article "95% of Traders are Insane!" in the August 2012 issue
During this weeks MTPredictor trading webinar, I looked at the trade setups that the software generated over the last couple of days. These trade setups help the new trader setup low risk/high reward trades with the larger degree trend.
Later, I showed how the more experienced trader can use the additional tools in the software to create and execute their own trade setups based on their own analysis. The software found a 5 wave pattern down this morning in the ES where the more experienced trader could execute a low risk/high reward trade to the long side.
Check it out in today’s MTPredictor trading webinar.
If you haven’t noticed, the US Dollar has been on a tear. In a bit more technical terms it is in a daily wave 3 up. This has had a major impact on many of the commodity prices including oil, gold, silver, corn, soybeans etc. All of which have seen some sharp declines as of late.
This dollar rally has taken some by surprise but as the Euro Zone continues its easy money policies along with a 0.05% interest rate, the play has been to buy the USD vs. anything or sell anything against the dollar. The next major resistance levels will come at the MTPredictor weekly DP resistance level of 84.60-85.20. The Dollar has not been able to get through this level after many attempts over the last few years. Maybe this time it does.
US Stocks continue to make all time highs fueled by low interest rates and cheap, borrowed money that corporations and their executives are using to buy back their own stock. Do they really believe their companies are worth a CAPE of over 26% or is it simply greed as part of their compensation is tied to the price of their stock. If the FED is truly following through with winding down QE and interest rates set to move higher next year, it may put an end to, what I call the internal stock market bubble. Stay tuned!
In today’s MTPredictor trading webinar, I demonstrated both versions of our software – the add-ons for Ninja Trader 7 along with our MTPredictor stand alone v7.5.
Both versions provide low risk, high reward trade setups with scanners that alert the trader to these automatic setups. The name of the game is to control risk and look for larger rewards. These software generated setups allow the new trader to follow this path while the additional tools in the software allow the more experienced trader to find additional low risk, high reward setups based on their own analysis.
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Last week I suggested that if the market took out option expiration Friday’s high, we could begin to see the market to ES 2,000. That is precisely what unfolded. On Monday, options expiration Friday’s high was exceeded and the run began northward before settling at around 1987 at the end of the week. The weekly MTPredictor resistance begins at 1997 and the magical ES 2,000 just above that. The question now becomes, will the rally continue or has the ES become extended and due for a pullback?
The AUDJPY, which is correlated with the ES is also coming into some major resistance. This will be one to watch to see if it precedes the ES lower or continues its rally.
A nice Holy Grail trade is playing out in the USD and we have seen the Dollar strengthen against many of the commodities, including the metals. The Dollar still has some room to the upside but is beginning to get a bit extended so keep an eye on this.
Check out the rest of the analysis in tonight’s MTPredictor Weekly Market Update and follow me on Trading View