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Natural Gas Rising - Factor - Peter Brandt

Natural Gas Rising

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Natural Gas Rising

The dominant chart construction in Natural Gas is the completed 7- month H&S bottom on the daily graph (Oct contract). Note the appearance of a possible 6-day flag on the Oct chart.  Factor is long Natural Gas and members were alerted of this buy with our premium reports section.

Natural Gas Rising - Factor Trading - Peter Brandt

The chart of the soon-to-be nearby Aug graph displays a pennant, not a flag (see below). The difference is that a flag is a diagonal correction while a pennant is a horizontal correction. A pennant is more constructive than a flag. That the nearby Aug Natural Gas contract displays a pennant while the Oct contract displays a flag is a constructive indication – in my opinion, for whatever that is worth.

 

Natural Gas Rising - Factor Trading - Peter Brandt

 

Factor Membership is now available.  You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work.   Through the Factor Service I endeavor to alert novice and aspiring traders to the many pitfalls you will face – and to offer advice on overcoming those pitfalls. My goal is to shoot straight on what trading is all about.  For more information, visit the home page here.  Or watch my 30 minute webinar where we cover the Factor service in depth.

I hope you will consider joining the Factor community.

 

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Treasury Bonds are constructive - Peter Brandt

Treasury Bonds (T-Bonds) are Constructive

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Treasury Bonds (T-Bonds)

The dominant chart construction in Treasury Bonds (T-Bonds) is the 10-month symmetrical triangle completed on the weekly continuation graph in late Jan. The Sep T-Bonds futures contract has decisively completed a 4-month inverted H&S pattern on the daily graph. The advance this past week also completed the 4-month congestion zone on the daily continuation graph (not shown). Factor (see premium service here) is long the Sep contract. Stops have been advanced to just below Wednesday’s low.

 

T-Bonds - Treasury Bond Chart are Constructive - Factor Trading - Peter Brandt

 

T-Bonds - Treasury Bond Chart are Constructive - Factor Trading - Peter Brandt

Please forgive me for making a quasi-political statement. The behavior of the U.S. interest rate markets and the jaw-boning of the Fed are at TOTAL disconnect. This highlights two facts – the Fed is incompetent and totally out of control and Janet “The Felon” Yellon is way out of her league.  I have known more about U.S. Treasury rates as a chartist than has Yellon as Fed Chief.

 

Factor Membership is now available.  You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work.   Through the Factor Service I endeavor to alert novice and aspiring traders to the many pitfalls you will face – and to offer advice on overcoming those pitfalls. My goal is to shoot straight on what trading is all about.  For more information, visit the home page here.  Or watch my 30 minute webinar where we cover the Factor service in depth.

I hope you will consider joining the Factor community.

 

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Coffee Futures are Brewing - Factor Trading - Peter Brandt

Coffee Futures are Brewing

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Coffee Futures

Coffee Futures are brewing again.  Historically, the Coffee market has been a yo-yo — major Coffee bull markets followed by major bear markets, as shown by the quarterly graph. The market has been trading in an area of historical support.

Coffee Futures are Brewing - Factor Trading Peter Brandt 1

 

The weekly chart has been forming a rounding or complex H&S bottom. The right shoulder has taken the form of a symmetrical triangle.  Coffee continues to form a possible rounding bottom on the weekly graph. This bottom is forming in the area of likely historical support. I believe the advance last Friday was a classic Wyckoff Sign-of- Strength (SOS) day, meaning it could prove to be the launch for the completion of the bottom.

 

Coffee Futures are Brewing - Factor Trading Peter Brandt 2

The advance today has completed — at least intraday — the symmetrical triangle on the daily graph (red box).

Coffee Futures are Brewing - Factor Trading Peter Brandt 3
Pending a close above 135.30 a major bull trend will commence in Coffee. The most likely profit target is 160, or the area of the 2014 lows.
This is a HIGH RISK trade.
Coffee ETNs include CAFE and JO.
Coffee Futures are Brewing - Factor Trading Peter Brandt 4
Coffee Futures are Brewing - Factor Trading Peter Brandt 5

 

Factor Membership is now available.  You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work.   Through the Factor Service I endeavor to alert novice and aspiring traders to the many pitfalls you will face – and to offer advice on overcoming those pitfalls. My goal is to shoot straight on what trading is all about.  For more information, visit the home page here.  Or watch my 30 minute webinar where we cover the Factor service in depth.

I hope you will consider joining the Factor community.

 

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Simple Trade Management - Factor Trading - Peter Brandt

Simple Trade Management

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Simple Trade Management – Standing the Test of Time.

I have absolutely no control if the next trade or series of trades will be profits or losses. However, with a proper Trade Management process, I know that I only have control over:

  • The patterns I identify as trading opportunities – do they meet a certain standard?
  • The orders I enter – is my order entry processes consistent with conducting trading as an organized business enterprise?
  • Leverage and sizing – (Risk Management) am I risking too much, but also, am I risking enough to make a trade matter if I am right?
  • Ongoing Trade Management – am I taking the right balance between protecting capital and allowing a trade to fully develop?

I want to be able to look at past trades on a chart a year or more after the fact (both entry and exit) and be able to say – “YES, that trade made sense, my sizing was right, my trade management was precise.” Picture this concept: If I blow up charts to wall-sized and stick pins into price bars at every spot where I bought and sold, will the placement of all the pins make sense a year after the fact? If I look at a pin and say, “I have no idea what I was thinking in that trading action,” then I have some serious issues I must address in my trading operations. Food for thought?

 

Factor Membership is now available.  You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work.   Through the Factor Service I endeavor to alert novice and aspiring traders to the many pitfalls you will face – and to offer advice on overcoming those pitfalls. My goal is to shoot straight on what trading is all about.  For more information, visit the home page here.  Or watch my 30 minute webinar where we cover the Factor service in depth.

I hope you will consider joining the Factor community.

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Gold Pausing - factor trading - peter brandt

Gold is Pausing

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Gold is Pausing

While I believe Gold has experienced a cyclic bottom, gold is pausing here.  I have for several months openly expressed my opinion that the advance would be choppy at best. In recent Factor updates (premium service) I have highlighted the significant problem with the composition of open interest – the commercial interests with a record short position and the large specs (hedge funds and large traders) with a record long position. The Gold market gained way too many friends too early. I am not surprised by the lack of upside follow through in Gold. I might be interested in buying a retest of the falling wedge on the weekly graph in the 1170 to 1180 zone.

 

Gold Pausing - factor trading - peter brandt

 

Gold is Pausing - factor trading - peter brandt

 

Factor Membership is now available.  You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work.   Through the Factor Service I endeavor to alert novice and aspiring traders to the many pitfalls you will face – and to offer advice on overcoming those pitfalls. My goal is to shoot straight on what trading is all about.  For more information, visit the home page here.  Or watch my 30 minute webinar where we cover the Factor service in depth.

I hope you will consider joining the Factor community.

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Long Term Euro Charts Point to Trouble Ahead

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Long Term Euro Charts

For a considerable period of time I have held a very negative opinion on the Euro. The Euro currency has a complicated history. The Maastricht Treaty of 1992 obligated certain Euro nations to adopt a common currency – although it was not until Jan 2002 that currencies such as the D-Mark were officially replaced by the Euro currency mechanism. It is possible to create a proxy EUR that dates back to 1992. In fact, IMM and proxy price data exist back to the early 1970s. Several technical developments on the EUR graphs are worthy of note.

 

Long Term Euro Charts Points to Trouble Ahead

 

A 6-1/2 year descending triangle on the quarterly graph was completed by the decline in Jan 2015. This pattern has an unmet target of 84 cents, the area of the 2001 low. The monthly graph also displays a dominant multi- decade trend-line connecting back to the 1985 low. The decline in the first quarter of 2015 found support at this trend-line. It is interesting to note that the price range in the first quarter 2015 has contained the market ever since. The weekly graph displays a possible 27-month congestion. It is my contention that this congestion will eventually be resolved to the downside – and that the simultaneous violation of the lower boundary of this congestion zone and the multi-decade trend-line will tie into a crisis in the Euro currency mechanism.

 

Euro chart - Peter Brandt

 

The daily graph displays a completed 14-week rising wedge with a target of 1.0822.

 

Euro chart daily - Peter Brandt

 

Factor Membership is now available, including a quarterly option.  You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work.   Through the Factor Service I endeavor to alert novice and aspiring traders to the many pitfalls you will face – and to offer advice on overcoming those pitfalls. My goal is to shoot straight on what trading is all about.  For more information, visit the home page here.

I hope you will consider joining the Factor community.

 

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stock market updates - Factor Trading - Peter brandt

Stock Market Updates

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Stock Market Updates

It is with some discomfort that I am always pointing out potential tops in the U.S. stock market indexes. But, I must call them as I read them. The S&P daily chart has made ZERO upward progress in 18 months. A possible complex H&S top formation is under construction. Also note the appearance of a 7-week H&S top pattern. I am willing to short this smaller H&S pattern if given a well-defined risk point. I will give up on a bearish interpretation of the S&Ps if a new high is made – but this does not mean I would have any interest in being long in new high territory.

The Nasdaq is tracing out a possible broadening top, although as I have pointed out in recent updates, the rally from the Feb 2016 low has exceeded the normal construction of a true broadening top. Outside of the Nifty (India), the Dow Utilities (dividend play) and the Japan Mothers Index, I have a hard time finding a futures market index I am willing to own.

 

S&P 500 completed head and shoulders top - Stock market updates - Factor Trrading - Peter Brandt

 

Nasdaq is tracing out a possible broadening top - Stock market updates - Factor Trrading - Peter Brandt

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bullish on the US dollar index - Peter brandt - Factor Trading

Bullish on the US Dollar Index

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US Dollar Index

I remain bullish on the US Dollar index. Like every other chartist in the world, I am well aware that the DX penetrated the important line of support at 93.00 this past week. I had absolutely no desire to short the apparent breakout of this level. In fact, I believe the decline below 92.00 was a gigantic bear trap – bringing in new shorts and washing out stalled longs.

A chart showing the recent CFTC COT data is also shown. Commercials have the smallest short position and large specs (hedge funds) the smallest long position since June 2014 – the month of the last major low in the DX. I am willing to “bottom-pick” DX should the 93.10 level be retested. My goal is to establish a 60 BP position near the lower boundary of the rectangle in DX. My long term target in DX is 120.00. Along the way I would like to build to a 100 to 150 BP position.

 

$USD bullish on the US dollar index - Peter brandt - Factor Trading 1

 

$USD bullish on the US dollar index - Peter brandt - Factor Trading 2

 

$USD bullish on the US dollar index - Peter brandt - Factor Trading 3

 

Factor Membership is now available.  You could consider your membership in the Factor Service as just one more trade. If the Factor Service is not of value to you, well, it is just one more trade that did not work.   Through the Factor Service I endeavor to alert novice and aspiring traders to the many pitfalls you will face – and to offer advice on overcoming those pitfalls. My goal is to shoot straight on what trading is all about.  For more information, visit the home page here.

I hope you will consider joining the Factor community.

 

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platinum continues to shine - peter brandt - factor trading

Platinum Continues to Shine

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Platinum Bull Market

The dominant chart construction in Platinum is the completed 9-month H&S bottom on the weekly and daily graphs with an implied profit target of 1179. Note the near perfect Apr 25 retest of the neckline on the daily chart. The strength on Apr 28 goes a long way to confirm the H&S bottom interpretation.  Is this a Platinum bull market!

 

Platinum bull market - Factor Trading - Peter Brandt - Platinum Chart $PL_F

 

Platinum bull market - Factor Trading - Peter Brandt - Platinum Chart $PL_F 2

Factor Trading is long Platinum and well positioned with a protective stop in place.  To consider Factor Membership options, please visit our home page for further details.  https://www.peterlbrandt.com

 

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Apple (AAPL) – Head and Shoulders above the rest.

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Apple (AAPL) – Head and Shoulders (Pattern) above the rest.

 

As a trader, my favorite chart configuration is the Head and Shoulders. The H&S pattern is easily recognizable (although for reasons I will not go into here, the novice chartist falsely finds the H&S form everywhere), produces far more reliable trading signals than more frequent patterns and is found at major turning points.

Apple has formed H&S patterns at many major turning points in recent years. The Factor has identified, alerted members and traded many of the following H&S patterns in real time.

Chart traders need to keep their eyes on Apple. The H&S pattern, when it occurs in Apple, is always worth a trade. Truly, Apple is head and shoulders above the rest.

Apple - $APPL H&S Head and Shoulders pattern Apple - $APPL H&S Head and Shoulders pattern Apple - $APPL H&S Head and Shoulders pattern Apple - $APPL H&S Head and Shoulders pattern Apple - $APPL H&S Head and Shoulders pattern Apple - $APPL H&S Head and Shoulders pattern Apple - $APPL H&S Head and Shoulders pattern

 

Factor trading tactics explained

Identifying a pattern is a relatively easy task in which to gain competence. Trading a pattern once identified – now that is a horse of a different color.

How many times have you heard another trader say (or said to yourself): “I knew that stock XYZ was going to go up, and it did, but I did not make a dime on the move?”

Trade signaling, in my opinion, is far less important to net profitability than is proper trading tactics and aggressive risk management protocols.

Factor LLC, in its proprietary account, traded two of the H&S pattern featured herein as follows (adjusted for splits, not adjusted for commissions):

 

2015 H&S top sell signal

Shorted the close on Aug 3 at 116.68 with an initial risk to 122.31, or a risk of $5.63 per share. The target was

103.22. Factor risked 60 basis points on the trade (6/10th of 1%), or $6,000 per $1MM of trading capital. A 60 BP trade represented a 1,000 shares position (actual initial risk was $5,630 per $1MM).

The protective stop was moved to 116.82 after the close on Aug 21. Factor takes profits when targets are met. The target was exceed with a gap down open on Aug 24 at 93.98. Factor maintains open orders to take profits at target levels. The profit for the trade was

$22,700 or 227 BPs.

 

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2010 H&S top sell signal — then 2010 H&S failure buy signal

  • Shorted 2900 shares on the Aug 24 close at 31.71 with 60 BP risk to 33.71. Stopped out on the Sep 3 opening at 33.76 for loss of $5950 per $1MM, or 60
  • Factor considers the failure of a H&S top pattern to be a buy signal. Bought 2400 shares on Sep 3 at

34.24 with 60 BP risk to 31.79 and target of 40.79. AAPL reached target on Oct 15. The profit for the trade was $15,720 per $1MM or 157 BPs.

 

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