Credit induced bounce or something more?

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“It's always darkest before it becomes totally black.”

― Mao Zedong

Commentary & Analysis

Credit induced bounce or something more? 

Commodities prices have staged a nice bounce.  We have been long in our Key Market Strategies service and captured some decent gains.  

Our target for oil (WTI) has been 50.88 on oil for some time; we are getting close and seeing some waning in momentum as oil tests its first swing high level at 48.28; next swing comes in at 50.92 [just 4 cents above our 50.00 target achieved as Wave A=C].  Lots of bullish sentiment growing here…hmmm…

Gold has made a nice move and many expect gold to continue to rally if stocks come off.  We are skeptical.  We expect gold to play its usual role and fall along with commodities on a major risk off event. The chart below compares gold and the US dollar index.  We are expecting a yield-driven risk off rally in the dollar and gold to correct, or consolidate, recent gains. 

Iron ore; turning over?

The question is:  Is the move in commodities just a bounce?  We think so.  Why?  For the same reason we think we got the bounce: China.

China’s massive stimulus this year is yet another page out of the old playbook of the capital investment model; at the expense of delaying the economy’s transition to a more consumer-based model and adding to the towering debt load, which will ultimately further depress cash flows and corporate profits.  We think there will be blow-back and it will take a major bite out of the run up in commodities we have seen.  It will likely be especially bad news for the emerging market economies in Asia. 

There are significant currency implications and opportunities if this view proves correct.  I will be discussing those trading ideas and providing a bit more in the way of global macro at a webinar tomorrow scheduled by Trader’s Exclusive.  If you would like to attend, please click on the registration link in the webinar summary and invite from Trader’s Exclusive below:


-----Free Webinar----

A lot has been going on in the markets! What do you need to know right now to stay ahead of the curve? Join us on May 18, 2016, to hear what five different market commentators have to say regarding current trade ideas, strategies and the most profitable ways to make money in the current market environment. 

 Register Here for the Trader’s Exclusive Event!

 12:00 PM to 12:45 PM CT— Price Headley of on “My Top 3 Technical Analysis Techniques"

 You're invited to join CEO and Founder, Price Headley as he packs 25+ years of trading experience into a fast-paced "cliff notes" summary of his top strategies that are still consistently producing results in today's markets, including:

·         Bullish and Bearish Entries and Exits with Williams' %R, Acceleration Bands and CCI

·         "Triple Confirmation" in Multiple Time Frames with %R - on a Single Chart

·         How to Find the Next Mega-Trend on Long-Term Charts with Acceleration Bands

·         Why CCI is My Favorite Indicator for Option Charts

·         Case Studies on Both Winners and Losers to Show You What Works Best in this Market and Much More!

12:45 to 1:30 PM CT—Matt Davio and Josh Schuler of Market Profile Trading Academy on “7 Secrets of Trading Success”

 Many traders are looking for the trading holy grail that will lead to perpetual success. Unfortunately, a holy grail does not exist for trading. However, there are 7 simple principles that are at play in every successful trader. This presentation will reveal these principles and provide participants ideas for activating them in their own trading businesses.

 Matt Davio is a veteran trader of 20+ years.  He has traded for firms like parallax and peak 6 in Chicago. 

 1:30 PM to 2:15 PM CT— John L. Person III of John Person Inc. dba/ on “New Millennium Scanning & Screening Tools for Quality Stock Picking

 John Person will explain what he’s discovered as some of the best indicators and tools used to identify high probability trades. This session will walk you through the process and the best technical indicators used to select stocks for swing and position traders between five days to ten weeks.

Here’s what you will learn in this session:

1.) How and When to determine which sector to scan for stock trades.

2.)  Where to define when to cut the trade if the signals fail.

3.) Anticipating the time horizon for the expected outcome and exit targets.

2:15 PM to 3:00 PM CT— Roy Swanson of on “Where Are the Gains in Today's Market?

 Roy Swanson, is a veteran trader and math geek.  He started trading at the dawn of the online brokerage era.

 We are now 2 years into a "flat" market, and many traders are frustrated. The good news is that double-digit annual gains are entirely possible, as long as traders adjust their strategies to trade the market "as it is today" and not as it was a few years ago. In this presentation, you will learn simple steps that anyone can take to trade the new market conditions. We'll look at how to apply professional disciplines to generate and select "buy signals", as well as specific trade management techniques can maintain a very high winning trade rate.

 3:00 PM to 3:45 PM CT—Jack Crooks of Black Swan Capital, LLC on “Macro Themes and Trade Setups in the Major FX Pairs”

 Jack will examine the key global economic themes in play and the potential intermediate-term impact on the US dollar. Jack will also take a look at some key forex trading opportunities—in intermediate- and near-term timeframes—based on our pattern analysis which utilizes key Fibonacci levels and Elliott Wave.

 Jack has over 25 years of experience in the currency, equity, and futures arena. He has held key positions in brokerage, investment research, money management, and trading.

 ***Incredibly, there is no registration fee to attend this event. But, our space on the webinar is limited to 1,000 people. Since we cant go over that limit, please be sure to register early and enter the room 15 minutes before the scheduled time (12:00 pm Central Time [1:00 pm Eastern] on May 18, 2016).***

 REGISTER HERE for the Trader's Exclusive Event!

 Registration URL:

 Jack Crooks

President, Black Swan Capital