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Key Numbers for July 24

Site Administrator | July 23, 2012

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So much for quiet summer markets eh?  That last part there was thrown out to our good patrons up in Canada!  Anyways, back to the markets.  Even though the markets rallied back there was no doubt some heartburn among any bulls in the crowd.  Here is a quick recap of a few of the major markets and then we have posted a look at our good friend, Tony LaPorta's key numbers for June 24th.

The ES Futures:

- This contract literally traded lower bar after bar until throughout the whole globex session.  We saw this market bounce off a key support level around 1333 and we continue to focus on 1330-1333 as big support in the market.  If this level is taken out the next levels we are eyeing based on previous trading is 1320-22 and then 1316.  As far as the upside goes, today's day session rally topped out just below 1350.  We are essentially looking at anything between 1345 and 1333 as chop as the market waits for the next move.  With AAPL earnings due out tomorrow it could get interesting.  Here is a twist for you... in addition to AAPL, the most important news due out in our opinion for the ES futures is the German Flash Manufacturing PMI (reported at 3:30 am eastern).  European markets are definitely in the driver's seat and that will be an important news event for the Dax which drives the US Futures at that time of day (and any time of day lately).

The Grain Complex:

- They say markets are moved based on supply and demand.  As prices drop, goods are cheap so there is more demand causing prices to rise.  As prices rise, goods become more expensive, causing supply to drop and with it price.  We got a bit of a dose in the grains market of this lesson.  If you pull up a chart of any grain market you will notice the parabolic rise that has hit alongside one of the worst droughts the US has seen in quite some time.  The problem with parabolic runs up is the fact that once a move begins for a way out it is like you can't sell it fast enough.  A few weeks ago we shared the following on twitter:

On July 5th, with grains up significantly we said it was time to take the blindfold off and have a look.  In hindsight we would look really smart had we waited until Friday to say that but hey, we are pretty happy with it either way.  What we mean by this is that sometimes you can just step into a market go long and feel ok about walking away.  Now is not that time.  Volatility in these markets today was extreme and money is changing hands at rapid rates.  After the move we saw in grains today, maybe we wish we still had the blindfold on.  Soybeans dropped .40 in the first half hour of trading, in case your calculator is out of batteries, that translates into a $2000 move per contract.

If you trade this market, there is nothing wrong in hitting that down button on the quantity button of your platform and trading less size.  Remember that as volatility increases, there is additional opportunity for gain but also much more risk taken to make those trades so adjust size accordingly.

The Bond Markets:

- Our good friend TLP always tells us to keep an eye on the bond market.  The bonds rallied pretty much all the way through the Globex session up until 7:00 am eastern time when the 30 year traded 153.01 (condolences to the guy who was short with a tick above 153).  Interestingly though, the bonds started coming off steadily from that point forward signaling what the equity markets would do throughout the US open.  As Tony says, keep an eye on the bond market!

We hope you enjoyed our recap and as far as parabolic markets go, we would like to thank everyone for your support on our facebook page... we have increased from 2000 fans a few weeks ago to hitting over 4000 today!  Click the following link to keep up with us on facebook and gain access to Breaking News and Recording - Like us on facebook!  Let's hope unlike the grain market we do not see a major pullback!

Here is a look at Tony's Numbers for Tomorrow (you can click to enlarge and print)

Be sure to join our next event this Tuesday on Candlestick Breakout Patterns

Cheers,

The TradingPub
“Trade, Talk, Learn – Cheers to Success”
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Risk Disclaimer: Past performance is not indicative of future results. Futures trading involves substantial financial risk. Views of guest commentators do not represent those of TradingPub.com. Article intended for educational purposes only and not meant in anyway as a solicitation to buy or sell certain securities. Please consult your personal financial adviser before using this information for your own trading purposes.