Trading Coach - Actionable Market Levels - May 21 2019

Actionable Levels:



Range Low

Range High





VIX (Cash)












10YR (Yield)




2 things on my mind:

Equities- Last weeks disapointing Retail Sales and Industrial Production were piled on by an escalation of the US/China trade war - which doesn't look close to ending anytime soon. Stocks have been wading back and forth on trade headlines and tweets and we just don't see the logic in the long side of the trade as we head into late May early June. Our research continues to suggest there's lower prices out there and are sticking with our 7-10% near-term correction forecast - which of course will likely bring a buying opportunity, just not yet. Our call is to remain "short" of US Small Caps via the Russell 2000 for a drop off along 1507 support.

US Dollar- We've been calling for a roll-over in the USD recently, but just haven't seen it yet. The USD remains bullish trend, but overbought at present levels. Our data suggests that 98.25 will likely cap the USD in the near-term, perhaps on more slowing US data. We continue to expect the Fed will double down on their "Dovish" stance on monetary policy and will soon signal a rate cut in the back half of this year. Furthermore, we believe the next front of the trade war is fought with the USD/CNY exchange rate. Due out this weekUS Existing/New Homes Sales, Fed minutes, and US Durable Goods on Friday. The old saying is, if you get the Dollar right, you'll get a lot of things right.

That's all that's on my mind this morning - Good Luck!

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Trade with the trend are words commonly echoed by professional traders. At what price does one sell in a bearish trending market and at what price does one buy in a bullish trending market? The Market Navigator is intended to provide guide posts to identify those price levels.

How to use our strategy:


The rules based strategy is simple.

If a market is in aBullishtrend a trader should only be looking to participate as abuyerand only at thelowend of the range.

If a market is in aBearishtrend a trader should only be looking to participate as asellerand only at thehighend of the range.

If a market is in aNeutraltrend a trader should be looking to participate as abuyeronly at thelowend of the range OR as aselleronly at thehighend of the range.


Determining how a market is currently trending depends on the time line. I typically track markets on both a monthly and weekly timeframe to identify trend bias. In my experience, studying market price, action, and behavior, Ive observed that markets that trend bullish or bearish on a 3-month timeline tend to hold that posture for an extended period of time.

With this in mind, all markets have the tendency to revert back to the mean, whether bullish or bearish trend. In other words, you get bull market dips that create buying opportunities, and bear market rips that create selling opportunities.


Trading ranges are determined by an ongoing tug of war on price levels between buyers and sellers. The top end of a range is typically where buying pressure has run out of steam and the number of sellers overwhelms the market and pushes it lower. Conversely, the bottom end of a range is typically where selling pressure has run out of steam and the number of buyers overwhelms the market and pushes it higher.

Range trading with the trend enables one to participate in a market with predefined entry target levels while keeping the overall bias in sync with the market trend. My proprietary trading range levels can be viewed as support and resistance levels, however unlike traditional static support and resistance, my levels update on the open and close of the market and may be different each period depending on market volatility. The levels factor in both the medium term and near term price action.

Use these levels to help manage market swings and risk. Remember, the amount of risk that you accept is the only aspect of the market you control.Sign up for a free 2 week demo of ourRJOF PRO Trading Platformand John Caruso will include you on his daily email distribution during the trial period.

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