Tag: Daniels Trading

The US Dollar and Inflation!

Posted on by The INO.com Team

The US Dollar Index is a measure of the value of the United States Dollar compared to a basket of currencies weighted accordingly:

  • Euro 57.6 % weight
  • Japanese yen 13.6 % weight
  • Pound sterling 11.9 % weight
  • Canadian dollar 9.1 % weight
  • Swedish krona 4.2 % weight
  • Swiss franc 3.6 % weight

The US Dollar typically has an inverse relationship to the other currencies and is traded at the ICE exchange. Post WWII, the US Dollar was tied to the Gold Standard, but today, the dollar is without intrinsic value. It is only valuable in that the US states its value. In recent years the value of the US Dollar may be decreasing due to oversaturation of the currency, low interest rates and the increasing debt in the US. The weaker dollar does typically help boost US exports as the foreign buyers may garnish more for their money when the dollar is undervalued. The US Dollar may also act as a safe-haven product that investors may flock to during times of uncertainty. The investment community may often reference the CFTC Commitment of Traders (COT) report to see the net longs or shorts in the market that week to determine any trends. It is typical to follow the big money in trading. Last week, for example, traders held a net short position in the dollar of $11.4 billion as of September 18th which was one of the largest short position in some time. The allocations shift and traders may follow the allocations. The US Dollar also may trade inversely to Gold which is actually another (hard) currency as well. Continue reading "The US Dollar and Inflation!" →

Beyond the "Spotlight"

Posted on by The INO.com Team

The GBE Trade Spotlight advisory service applies the GBE trading methodology (buying or selling commodity contracts based on breakouts of chart formations and technical indicators) to identify one to two trade setups per week.

Highlighting This Week’s Potential Breakouts:

December 2012 Soybean Oil

The December 2012 Soybean Oil contract has potentially formed a 1-2-3 Top Formation. The contract made a new 12 month high on September 4 at 58.60. This high sets up the number one point of the formation. The market pulled back to 55.68 on September 12. This low sets up the number two point of the formation. Friday, September 14, the contract traded as high as 57.80. If this price holds, it would setup the number three point of the formation. The market sold-off in the afternoon and on the close, so it's likely the market continues to sell-off into Monday's session. A break of the number two point of 55.68 would trigger an entry to the downside. There was a surge in trading volume on days when the first two points of the formation were established. Currently the Trend Seeker (a US Chart Company tool) is Up. This trend could reverse if the market trades through the support level near the number two point. A potential stop loss could be the number 2 point of the formation. Potential targets could be the 51.88 low (8/8/12) or the twelve month low of 48.64 (6/15/12). Continue reading "Beyond the "Spotlight"" →

The Gold & Silver Speculator

Posted on by The INO.com Team

The Gold & Silver markets continue to take giant leaps forward as the calendar heats up early September. After 3 consecutive weeks of solid performance to the upside, Gold rests just shy of $1700 while Silver marks time near $32.25.

Major short covering and new momentum buying before/during/and after the Jackson Hole Symposium has been fueling their moves higher. As elated as the Bulls are, there is danger on the edge of town.(The End, The Doors) Look out for Weird Scenes Inside The Gold Mine.

A potentially massive macro event risk loom large in the form of “Super Mario’s” ECB Decision tomorrow and next week’s FOMC Meeting. The current paths of least resistance for these Heavy Metals. Hard Currencies are up but face enormous near-term obstacles should either meeting disappoint/fail to satisfy. We could very well be in an environment where these event risks could trigger enormous moves in either direction. Be prepared. Continue reading "The Gold & Silver Speculator" →

Savvy Option Trading for Well-Capitalized Investors

Posted on by The INO.com Team

If you are a “writer” of commodity options, you inherently have exposed and unlimited risk. However, it’s this risk potential that provides the capacity to reap rewards. Therefore, a savvy commodity option writer understands that managing risk is more important than reaping rewards. The trade setup below details a strategy to help protect short option positions with longer than a month until option expiration. In a follow-up, I will discuss a strategy to help protect short option positions with less than a month until option expiration. These strategies can be tailored to reach your short term objectives and long term goals. Continue reading "Savvy Option Trading for Well-Capitalized Investors" →

Beyond the Spotlight: Highlighting This Week's Potential Breakouts

Posted on by The INO.com Team

September 2012 Euro Currency

The September 2012 Euro Currency contract lows are trading along a lower trend line, touching at 1.2051 (7/24/12), 1.2140 (8/02/12), and 1.2258 (8/16/12). A close below the lower trend line will trigger a sell entry. It appears the market will need to settle at 1.2280 or lower for confirmation of a breakout. The Trend Seeker (a GBE trading tool) confirms the market is in a down trend. The 50 day moving average (1.2387) is just above recent highs which could act as resistance and a natural level for stop losses. A short term target could be the 1.2051 low from 7/24/12. The stochastic indicator crossed over to sell signal and MACD is converging. These indicators may fall in line once the breakout occurs. Continue reading "Beyond the Spotlight: Highlighting This Week's Potential Breakouts" →