Good morning traders and Happy New Year. I sure hope you enjoyed and maximized your time with friends / family and downtime from the markets, because we’re coming out of the gate roaring in 2012. From the dual perspective of trading / analyzing the markets, as well as running the business, we saw a lot of things we did well that yielded results, and we saw things that need to be addressed in 2012. As you know we never sugar coat the realities of trading when we communicate with you. The faster you learn what life in the markets is really all about, the faster you will stop losing money. That means you need to stop making rookie mistakes, your trading will then stabilize at a breakeven level, and then you will take that magical step into profitability.
With that said, and continuing on with our policy to not sugar coat life in the trading trenches, as a trader your evolution process is a journey; not a destination. Tiger Woods knows full well you can never “win” at golf. You can never reach the pinnacle and say “I’ve arrived”. Because when you do, the trading (golfing) gods will knock you flat on your butt. Dave and I hit close to 62% of winning trades since we adopted our PnL and accounting system in March ’11. It was good, but we know there is room to grow and attain better results in 2012. We have addressed this several times with our subscriber base, and one area that needs to improve is our average winning size vs our average losing size; they are too close.
Market Analysis
Now to market analysis. In the early goings of 2012 the risk trade is as encouraged as we are. The S&P futures are trading higher by 1.55% at 1272.50 as the US dollar Index broke below the psychological 80.00 level, trading 0.58% lower at 79.80. Gold, copper, and crude all higher confirming the risk-on rally, and the Australian dollar is higher by 1.05% as 1.0343. In the past few days we have seen strong international data with a better than expected Chinese non-manufacturing PMI, strong German employment data, and a positive PMI from Switzerland. Next week we will be watching Italian and Spanish sovereign debt auctions, which puts the focus for now on the US. At 10:00 AM EST we have ISM Manufacturing PMI and Prices, as well as Construction Spending, and then at 2:15 PM EST we the FOMC minutes from the prior Fed meetings.
Turning to the maps, let’s survey 4 major markets on the daily charts and set the tone for the beginning of 2012. On Friday’s Money in Motion, I communicated the same risk-on bias, which put me on the complete opposite side of the market as former Goldman Sachs VP, Jens Nordvig. I even tried to bet him on the call, but he didn’t take the bait. To accentuate the New Year’s Eve episode, as well as my bold EURUSD call, I did wear my wedding tuxedo. I recommend you watch as it certainly caused some laughs on the set, especially from my friend Andy Bush. So to the maps, here’s how we see the markets unfolding in the first half of 2012. Commentary is included on each chart.
Webinar Series Continues on Thursday:
Aspen Trading’s Director of Marketing and Client Education, Bart Marek, will continue his Thursday webinar series on Thursday at 4:30 PM EST. The topic of the week will be the “A,B,C’s of Elliott Wave Corrections”. To register
CLICK HERE
Until next posting - Todd Gordon of Aspen Trading.
