Trading Blog: TnT Group

Good morning all. I hit on this a litle bit in my webcast. I wanted to go a little more in depth about it though. When I left for vacation over the holidays I left a gold and S&P market that seemed to be somewhat correlated. To say it was a great correlation would be an absolute lie. However it seemed like gold was being traded solely as part of the commodity basket and was rising with oil, copper, rubber, etc which was also followed slowly but surely by equities and the free money that was being pumped into them.

Now after my first day back from vacation and stepping back into these markets it seemed as if there was a definite change of scenery. Overnight gold was getting hit harder than Brett Favre’s head on the frozen field in Minnesota while equities, continuing there impressive day from yesterday, gradually rose higher (as I type S&P 500 Minis are up 4.25 trading 1269.50 while gold is down 14.7 trading 1408.2). This was not a small divergence from what had been happening before I left. This was a farely large change of thought. Are people or the markets now thinking, more than we have in a while, that the economy may be on track?

Below is a daily chart showing the somewhat correlated gold and S&P markets and the slight divergence over the last few days.

The overnight session really made me think that way. We had a ton of risk on trading happening. Minis up 4.25, euro trading up 30 some pips, yen getting hit farely hard down 87 pips, debt (both US and European) down a good amount, and gold getting clobbered. Oil had a tough time doing anything overnight. I understand it. Do they want to rally it because of equities rallying and a slight sell off in the dollar or is it confused because gold is getting pounded. It eventually rallied slightly, as it should if the markets are showing signs of adding risk and the outlook being somewhat positive.

Below is a 5 minute  chart of last night session and the distinctive inverse relationship of gold and Minis.

I am not coming out and saying that our economy is back on track and let the jobs rain down from the heavens. I still whole heartedly believe we are nowhere near where we need to be. My point is to keep an eye out for this inverse type relationship as it will tell a story as to risk on or risk off trade. It is hard to deny how these markets moved last night and is something to pay close attention to moving forward into this new year.

Today was a day that seemed orderly and slow.  It seemed like a yawner compared to most recent days….. But in the reality of it, we did make some moves.

In the overall picture it was a day or corrections from Friday.  I was not here on Friday, because I was licking my wounds from Thursday.  But we corrected most of the debt and equity move.

Again…. I can not stress the amount of importance on the risk currency spreads and out rights.  I believe that these currency moves are what is giving us these momentum moves.

As long as this Euro/Yen stays below 1000 and Canadian Currency stays below 95.50……. Just stay short equities and long debt.  I know I am probably sounding like a broken record every Monday…… But it is what it is.

As for my trading….. The market has licked me as a scalper.  It has put another local click trader in it’s hopper.  The numbers are scary out there.  I just talked with some exchange heads, and we are pushing over 75% automation in all products.  I have come to the realization that you can not react and click in these markets anymore.  I feel like I am one of the last cowboys standing…. But I need to move on with the TnT Group business plan.  We are being tremendously successful with our automated prop business, our own automation, and our long term trading.  I am going to focus more on the long term trading.  Today was my first day doing it 100% and we had great success.

This type of trading is the only way to survive in my eyes….. It is definitely a lot less stressful and a lot more relaxing.

In no way am I happy about this change in my career.  But I think it is the only way to go to continue my career.  I do not want to be another mounted head on the automated trader wall. 

IF YOU CAN’T BEAT THEM…….. JOIN THEM!!!!!!

Good luck and happy trading……. Remember no drinking and trading.

Spyder here,

Mark is on vacation for the next few weeks so I will be chiming in for the days he usually writes on the markets.

Overnight seemed to look pretty tame and stayed the same early into the morning. Things seemed to really pick up around 7:00 however. To me it felt as if it was a pretty volatile session.  Jobless Claims came out +473K which was better than the expected +490K  with Continuing Claims coming at at 4456K after an expected 4495K. Now these numbers came out better than expected which the markets took positively, rallying equities to new highs. However, one of the traders that came on CNBC made a very valid point; these economists are beginning to realize the negativity within our economy and are lowering their expectations on these numbers. So a number, such as this Jobless Claims, which beat expectations, it may solely be because of the lowered expectations in the surveys that are given. Markets may have taken that to heart as equities came off the rest of the morning. S&P Minis as I am typing down 2 dollars on the day.

Taking a look at the commodity markets we had a big move up in copper even with the weakness in equities.  Oil, which once again seems to have a mind of its own most of the time, kept with that MO again today. Seemed weak when the equities were on the highs. When equities came off and went negative oil seemed to be strong. Ultimately you can make money in that market but its all about timing and if you are in it too soon you are as good as dead.

I think looking at the bigger picture you still need to be short equities. One of the risk currencies, the New Zealand Kiwi, has stayed below a daily trend and broken the 6996 level in which it needed to stay above to keep the trend higher.

With that being lower, as shown below, and the Euro/Yen Cross at the level it is at, as Brian has talked about, I think that longer term play is just to be short equities. Not to mention the unstopaBONDS where they are at!

Good luck trading!

Andy Turner here on a Monday.

The dollar is looking to hold onto the gains it made late Friday in after hours trading.  Although stock index futures were higher going into the open, those gains were quickly erased.

Oil gave some signs of life too but finally rolled over with the dollar holding the 83 even area.

I wanted to see the S&P mini test the 1103 area last week but it doesn’t look like that is in the works anymore.  Add in the fact that the Euro/Yen cross looked  like it would test the lows made in June today, it makes me think this is a very sick market and we will be testing the aforementioned 1050 before 1103 trades again.