Last week the markets failed to build on the risk-on sentiment following the US non-farm payroll data. It was a choppy trading environment as economic data from the world’s largest economies was seen as weak, causing the US dollar to relinquish most of its gains. The US Treasuries also reacted, gaining back most of the losses from the prior Friday’s solid jobs report. However, stocks traded in a tight range with the S&P 500 repeatedly hitting new all-time highs on both intra-day and closing basis, but lacked any follow-through.
In the commodity market, crude oil traded in a wide range, from 40.90 to 44.73, providing trading opportunities. Technically speaking, crude broke out from the recent downward trend line on August 4 around the 40.90 level but ran into strong resistance at 43.52. By last Thursday August 11, crude had retraced the gains to test the 40.90 break level, however bulls managed to take strong control again, pushing it higher to close the week at 44.73, a three week high.
In the week ahead, I will continue to pay close attention to central bank activities and the reaction from the perceptive of intermarket relationships. Correlations analysis has been very helpful in keeping me out of choppy markets, a trading environment that has caused many traders to struggle.
Einstein III Automated Trading System
Last Wednesday was an opportunistic trading day for crude oil futures. Textbook charting pattern as past resistance breakout became future support level, the bears pushed it down to test the prior breakout level of 40.90, providing several intra-day shorting opportunities. Einstein III took 5 trades, two winners and three losers for a profit of $500.00 per contract.
The Trading Room TradeLAB – Global Trading with Quantitative Technologies
Monday through Friday
