Trading Coach - Actionable Market Levels - May 16 2019

Actionable Levels:

Market

Trend

Range Low

Range High

SP500

Bullish

2792

2878

VIX (Cash)

Bullish

15.00

21.05

OIL

Bullish

60.12

64.21

GOLD

Bullish

1272

1308

10YR (Yield)

Bearish

2.36

2.50

Yesterday's Market Commentary from our Market Insights Letter:

Ugly data out of China and the US. Chinese Industrial Production and Retails Sales slowed in April and will likely slow again when we see the May data released of course in June. US Industrial Production slowed the most in 2yrs -0.5 vs -0.1% Prior and Retail Sales (US) slowed -0.2% vs 1.6% Prior. China is now back in a Growth slowing set up within their economy and as aforementioned we expect this to exacerbate as the trade war continues thru May/June.

The former Goldman Sachs Chief Lloyd Blankfein was out this morning in support of Trumps stance on trade with China:

Lloyd BlankfeinVerified account@lloydblankfein16h16 hours ago

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Tariffs might be an effective negotiating tool. Saying it hurts us misses the point. China relies more on trade and loses more. As in a labor strike where mngmnt & workers both get hurt, the process may demonstrate relative strength & resolve & where compromise needs to happen.

Lloyd BlankfeinVerified account@lloydblankfein14h14 hours ago

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As to who ultimately bears the tariffs cost: US buyers may eventually switch their purchases to domestic or non-Chinese companies (and pay a bit more than now). Chinese companies lose the revenues. Not great but part of the process to assert pressure to level the playing field.

I think its safe to say that Trump wont bend the knee to Xi on trade as support seems to be gathering steam from Wall Street.

UPDATE:

Gold Prices are falling back this morning - we're very interested in Gold headed deeper into May and into June. We think the time is right about now for Gold to flex its muscles against the Dollar. we're somewhat surprised by the USD's resillincy in the face of falling US Treasury Yields, but we don't think that correlation will last for much longer.

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Trade with the trend are words commonly echoed by professional traders. At what price does one sell in a bearish trending market and at what price does one buy in a bullish trending market? The Market Navigator is intended to provide guide posts to identify those price levels.

How to use our strategy:

Guidelines

The rules based strategy is simple.

If a market is in aBullishtrend a trader should only be looking to participate as abuyerand only at thelowend of the range.

If a market is in aBearishtrend a trader should only be looking to participate as asellerand only at thehighend of the range.

If a market is in aNeutraltrend a trader should be looking to participate as abuyeronly at thelowend of the range OR as aselleronly at thehighend of the range.

Trend

Determining how a market is currently trending depends on the time line. I typically track markets on both a monthly and weekly timeframe to identify trend bias. In my experience, studying market price, action, and behavior, Ive observed that markets that trend bullish or bearish on a 3-month timeline tend to hold that posture for an extended period of time.

With this in mind, all markets have the tendency to revert back to the mean, whether bullish or bearish trend. In other words, you get bull market dips that create buying opportunities, and bear market rips that create selling opportunities.

Range

Trading ranges are determined by an ongoing tug of war on price levels between buyers and sellers. The top end of a range is typically where buying pressure has run out of steam and the number of sellers overwhelms the market and pushes it lower. Conversely, the bottom end of a range is typically where selling pressure has run out of steam and the number of buyers overwhelms the market and pushes it higher.

Range trading with the trend enables one to participate in a market with predefined entry target levels while keeping the overall bias in sync with the market trend. My proprietary trading range levels can be viewed as support and resistance levels, however unlike traditional static support and resistance, my levels update on the open and close of the market and may be different each period depending on market volatility. The levels factor in both the medium term and near term price action.

Use these levels to help manage market swings and risk. Remember, the amount of risk that you accept is the only aspect of the market you control.Sign up for a free 2 week demo of ourRJOF PRO Trading Platformand John Caruso will include you on his daily email distribution during the trial period.

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