January 7, 2015 - MDT Pro Tips A.M.
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.
Current Positions
LONG 4 CA6H Canadian Dollar?????????? 84.49
SHORT 4 JYAH Japanese Yen??????????? 84.35
LONG Line????????????????????????????????????????????? 11.50????????????? 10.80 Close
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Today's Working Orders
No working orders.
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Stocks...
Spu's....need to sustain over 2010 resistance for a trad able low to be in place.
Price action under yesterday's low will lead to another leg down as seen on the point & figure.
Spu/Bonds... came close to putting in a monthly double bottom. We'll see if it holds.
Bonds ...
30 Yr. Futures...new strength is needed over yesterday's high of 149.10 for more upside.
146.20 is first Fib support.
As seen on the chart we've moved 6 full points with out any back and fill.
TLT Hit it's 132 tgt. 127.50 is the first low risk area to look for a hold.
FX...
CAD/JPY...100.00 looked to be a good level to try and use as a tool to get a Yen short on Via the cross. 101.20 starts minor resistance into daily momentum resistance @ 101.88.
CA6H5 (Futures Put In an ORL Day)...this chart pattern was put in with a very over sold condition, which is generally not a high probability trade.
The above pattern did not match up with the straight dollar chart.
Euro...waiting for a rally that is not forthcoming. Short Euro has been the trade with the least amount of angst. Looking for a running of the 116.42 stops.
Commodities...
Energy Futures....throw me a bone it's 50 below here.
Even the hint of price stability would be good for CAD/JPY.
The Energy complex sets up the 15 & 16th for another swing. Oil will either bottom around then or keep going.
General Comments or Valuable Insight
Thought Process...Yen...The Anatomy of a Trade.
I've headlined the 118.60 level in USD/JPY for a a couple of weeks,and in keeping with my thesis I was waiting for some trade location on a big rally to get in.
Yesterday I tried an early short in the Yen which I promptly puked when the Spu's wouldn't hold 2012. Long Dollar Yen is a Risk On trade and you needed the help of the Equity Indices for it to work.
Sometimes you just don't know until after the fact if the level will work, however if you stay disciplined around the level you can get in to see if you'll get the expected price rejection, or decide as I did yesterday that the Equity Indices were not cooperating, and it was best to close it out and await a better level with a cooperative board.
When you see you're not going to get any love you can push the trade for little cost and rethink your thesis and your market timing. You must stay disciplined to low risk levels or you won't make money.
Equity Indices were being volatile which meant I didn't know what the high would be in the Yen, so I looked at the crosses as an avenue to get on some Long USD/JPY exposure.
First I needed some trade location in a low volatility cross. Parity (100) in CAD/JPY seemed a likely candidate.
I had to pick a time frame for everyone to put on the CAD/JPY Cross which was my way of back dooring a Risk On Trade via a Currency Cross and getting some short Yen exposure.
In yesterday's case I chose the Chicago Pit close vs the NYSE close because the Spu's had a little giddy up at the time. (They were in rally mode)
Trading the Futures let's you give it a go and take a peek. It's all about Risk /Reward.
You're trying to get involved from a side at a major level for a bigger move.
Time frame Trading...the hourly charts needed to roll over which they were not doing at 9 A.M. CDT yesterday. They took into early Asia to top. Hence no early love.
FYI...I'm not a raving Canada Bull with falling energy prices, however I thought the cross was a viable low risk way to enter a Short Yen position with a modicum of risk management.
Now that CAD/JPY is starting to work I have the option of kicking out one leg of the spread (the Canadian side) and let the Yen hopefully run.
?Spu's
30 Yr. Futures?
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