FAZ as an event hedge for the SP500 Index

FAZ AS AN EVENT HEDGE

The FAZ Financial Bear 3x is a short-term [read Daily rebalancing] timing tool that can be used as a hedge for a potential event day.

With Employment numbers released tomorrow and the SP500 Index at a major inflection pivot [945] the FAZ can be a good value “insurance” bet.

Buying the FAZ this afternoon or near the close and exiting tomorrow or Monday’s close.

The SP500 JUN’09 contract is currently keying off the 945 and 962.50 Inflection Pivots. Buying the FAZ on a 1 and 2 unit size ratios, 1 unit at 945 and 2 units when the SPM’09 is at 962.50.

If the recent rally is going to fizzle and turn sour it will do so off either of these inflection points and if so put the Index back in a vulnerable position with the potential to put the lower Bear trend pattern back in play for a revisit to the April’09 lows at the 780 area. Not in the session mind you but as a psychological sentiment shift that this could be so, with the expectations displayed in the price of the FAZ.

A rise above 962.50 and the Index will have another 40-50pts in it for a challenge to the 1010 level. This will be another opportunity to buy FAZ, as even a small reaction here should pay for any losses incurred on the original FAZ buys. Consider using the 3.5pt stop at each SP M’09 inflection point for any FAZ buys. Each inflection pivot level can be used with a REVERSAL strategy if stopped out as well as any violation of resistance should be sustained and hold structure if the MKT is good.

Looks like a 1 to 8 risk reward, which it should be as this is a counter trend FADE.

Insurance is not cheap but this has the potential to make something for you.

945, 962.50 and 1010 Inflection pivots. 1 unit, 2 unit and 3 unit respective opportunities. Remember the FAZ rebalances each day so pushing a position beyond a couple sessions is too much.

The best option is to use the JS Services Price Map each day to isolate the key session inflection points to leverage opportunity in the FAZ.

For more information please contact me at info@jsservices.com

JS

BRITISH POUND - Applied Strategy Based Trading

BRITISH POUND – Initial Target Attained

In my May 20, 2009 post, with the JUN’09 BRITISH POUND contract trading at the 15663 Inflection Pivot, I highlighted a positive divergence signal with a 16633 initial target.

Impressive day in the British Pound.

15663 is the Inflection Pivot to key off for the current advance. If the MKT is going to run it should just go with 16363 and 16633 the initial targets.

Today the MKT attained that target.

By using the Price Map you optimized your position by not only locking in your gains but were also presented an opportunity to get short.

The service is published at 12am cst and highlighted the MKTs technical position to be “BULL TREND EXTREME”. In this technical state the MKT is extended and an exhaustive reaction is expected.


At 1am cst the MKT was at our forecasted target, which was also today’s UP [Upside Pivot or Resistance Inflection Pivot]. With the technical posture exhaustive, taking profits at 16634 was the only option. If you were not on the MKT, a resting overnight order was a nice wake up call.



But the day is just getting started and on the right foot. On the regular session open the Price Map produces a negative signal below the DIR [16542] providing a sell opportunity. Additionally a failure from the 16420 DP [Downside Pivot or Support Inflection Pivot] provides another sell signal with two opportunities to enter and attaining the 16266 DT2 [Downside Target #2].

This is a classic Price Map BREAKOUT strategy. Where the MKT breaks outside the UP-DP Critical Range extremes.

The original May 20, 2009 post signal was valid for a 1000 point move. The Price Map enhanced this with another 800-point winner on the reverse.

This is the power of Strategy Based Trading.

Aligning your strategy with the market expectations.

Today JS Services Technical Outlook was BULL TREND EXTREME. Our expectations are for an exhaustive reversal or digestive trade. Combining this with our long term forecast target we can anticipate a negative reaction and accept exhaustive Reversal and Breakdown Failure signals.

By using the sell bias Price Map entry strategies at risk qualified inflection points we can systematically exploit this opportunity.

By anticipating opportunity we capture it.

For more information regarding Strategy Based Trading and the Price Map please contact me.

JS

BRENT CRUDE OIL - Position Management Using the Price Map

BRENT CRUDE – Initial Target Attained

In my May 21, 2009 post when the JUL’09 BRENT CRUDE OIL Contract was trading @ $59 the expectation was for a rally up to $68 or $74 oil. Today the contract topped out at $68.65, after a reversal signal and potential short-term top.

The rally may or may not be over but by incorporating JS Services Price Map and MarketColor analysis into your trading plan for this opportunity you would have improved your performance and reduced any profit give-back by exiting or establishing a hedge to your long position at the $66.35 level.

Here is how.


JS Services is published each trading session at 12am(cst). In the June 2, 2009 Brent Crude Oil release the service defines the MKTs Technical Ste in its Highlight Comment, which today was “BULL TREND EXTREME”.

In a BULL TREND EXTREME technical posture expectations are for either an exhaustive reversal or digestion.

The Price Map defines the key Inflection Points for the session with the UP [Upside Pivot] being the key resistance point to key off.


In today’s early action the MKT produced a REVERSAL signal off this Inflection Point confirming our expectations for a sell opportunity.

At the regular session opening the MKT produced another negative signal breaking structure below the DIR [Directional level] and then confirmed that break in structure by failure from the DP [Downside Pivot].

Will the negative signal follow through or is today’s action just a pause for the cause? No one knows but the Price Map will allow you to capture the opportunity whatever the direction.

JS