Let's review the fundamentals first. We have overcome:

**Europe

**a slowing world economy

**stagnant employment data in the world's leading economy (US)

**uncertainty over the upcoming US Presidential election

**uncertainty over healthcare in the US which is keeping employers from hiring

All this and a market that can't be kept down. That is where technical analysis comes in. You can see the buying come in. Take a look at any "High, Low, Open, Close" bar and you will see that it is rare (very rare) that the markets close on their lows when looking at daily bar. This screams out that the buyers are winning.

Another analogy. All of the pit traders are standing around and anytime someone puts up their hands and says "Sell", buyers come in. So if you are selling these markets over and over, you are probably losing. Take a look at the trend and ask yourself if swimming upstream or downstream is easier. The stream of the markets has been . This is proven by the very small percentage we are off from our early summer highs - less than 1.5%. Buyers have been rewarded and if they wait for a dip, enter the markets, then soon after see a surge higher. Remember, any "anxious" moments the markets have had, whether it is Europe or a slowing in global growth, the markets have dipped and come right back up and ferociously quick at that!

So we clearly have a trend up full of higher highs and higher lows. Now the question is what will happen at resistance - the same point that we fell from in May is just ahead of us. Are there enough buyers to push us through? Will there be a fundamental event that will push us through? I am in the camp that it could be a little of both as fundamentally, we see "Quantitative Easing 3" arrive to push us over the top.

Getting back to the fundamentals, if you look at recent economic data, whether it is better than expected or weaker then expected, the markets go up. I don't think the data will come in too strong or too weak that it pushes the Federal Reserve away from acting.

With the understanding that all recent fundamentals have been "bullish" events and with a basic understanding of technical analysis, this keeps you long the markets or at least neutral, but certainly not short the markets.

A few bellwether stocks that are at new highs or breaking out to new highs:

**Apple Inc (AAPL)

**Exxon Mobil Corp (XOM)

**Chevron Corporation (CVX)

**General Electric Company (GE)

I think you get the point. These are household names that are multinational companies and as a special bonus, provide nice dividends.

It seems like only a matter of time before the "love" continues and prices of the overall indices rise above old resistance.

Invest Intelligently,

Brian

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

As I posted on Friday, be aware of the multitude of data that is to be released this week. Macro events such as European elections, European austerity and the FOMC may take center stage and give us some "guidance".

Technically, the SPX is back at 1360. It has been in a 1360-1390 range and it seems like just a few days ago, we were at 1390. So a 30 point range for 13 trading days is actually a 2.2% trading range. Trading ranges can provide trading opportunities and if you want to learn more about those opportunities, please join me Wednesday evening for the IBFX webinar titled: "Rangebound Trading Opportunities"

Moving into the charts, let's start with forex and a pair showing very much a range, the EUR/USD:

(click to enlarge)

Next up is another range bound pair, the USD/CAD. You know that I have been talking about it as it has been oscillating in a 2 penny range for months. We approached the top of the range today as equities and oil traded lower:

(click to enlarge)

The next chart of the USD/CAD shows the past few days, where it found support at .9900 and moved higher:

(click to enlarge)

Moving into equities, let's take a look at an ETF that acts as a "leader". The Financials (XLF) are looking to make a lower low (as is the SPX), which would change the "sequence" and could potentially put us in a downtrend:

Another ETF that has a chart that is hard to decipher, but is getting closer and closer to old support at 3.00 is natural gas (GAZ):

It should be a volatile week, so make sure you trade appropriate size if trading ranges do in fact pick up.

Happy Trading and Be Environmentally Cool

Coach Brian

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I am going to stay with what I know and that is a rangebound USD/CAD. We moved halfway back into the range yesterday during the American equity session as equities went down and the USD went up.

Last night, we received positive news out of Europe and US futures were flat to positive and now, most equity markets are heading higher. As a result, oil got a bit of a pop and additionally, not sure if you can throw in any weekend risk bid to oil prices.

But, overall, that means higher equity prices, higher oil prices and a higher CAD. But, even more interesting is the comparison between equity moves and the USD/CAD. Look first at yesterday's post for a chart of the USD/CAD and the just under 2 penny range it is has been in for over 3 months (.9830 to 1.000). Now look at yesterday's trade and today's. As I described above, we moved halfway up and now are coming back down towards the lows. The Fibonacci shows yesterday's rally and the percentage we have retraced today as the USD has gotten weaker:

(click to enlarge)

Past performance is not indicative of future results

(click to enlarge)

Past performance is not indicative of future results

Overall, the USD is really weak against all majors today. That has been another underlying theme as of late. When equities go down, the USD barely gets stronger. When the equity markets go up, the USD gets absolutely creamed, hammered, stepped on, thrown down, you get the picture!

Eventually, some fundamental or technical event will get the USD/CAD to break out of its range. Until then, use it to your advantage by understanding support and resistance!

Looking at the remainder of today's and the week's trading, as I said, we have a seriously weak USD. With this being the case, we always have the opportunity for BUFFALO BOUNCES to show up. We don't have any USD data today, so be careful of trading ranges that decrease as the day goes on. If for some reason we get a Friday selloff in equities, that 61.8 line in the USD/CAD could continue to be support.

Speaking of USD data, let's look ahead so you have an idea what to watch out for on the economic calendar next week:

**durable goods

**FOMC STATEMENT

**weekly claims

**Advance GDP

**earnings

**smattering of international interest rate talks

**the usual "surprises" from various regional central banks

That is quite a lot, so keep your trading plans in tact for each and every trade you put on. This data also affects your investment portfolio that you are trying to generate income on as well as protect its downside risk. For now though, the goldilocks scenario is in place. A president trying to get re-elected and a president who can lean on the Fed to QE his way to another 4 years!

Happy Trading and Be Environmentally Cool

Coach Brian

Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.

If you remember back to late 2011, we had upside moves of 10-20% in very, very short timeframes. Can this continue? It can if the markets are "still in love" with quantitative easing, austerity measures and centralized bailouts. But as a trader looking to always generate "absolute returns", the technicals give me reason to use certain option strategies at this very moment.

Let me explain. The SPX has reached a recent high of 1420. If we are going to continue to trend higher, we will have to take that high out and proceed to new "bull market highs". The recent break off of the 1420 level down to 1360 may just have been large enough for us to finally "fail" and not make a higher high. Currently, we are sitting at 1390 and if recent data is any indicator, we could be at new highs in a day. It could be a good economic report, shorts getting stuck or a fundamental event such as Bernanke saying QE "to the Nth degree".

Until we hear more QE or until technicals show me that we are breaking through to the upside, I am going to look at the rallies as an opportunity to generate returns. There are two option strategies that I use to generate returns when technicals and fundamentals tell me to.

The first is covered calls. Covered calls are an "income strategy" and by income, I mean the production of 1/2 to 2% per month of income based on the underlying holding.

The second strategy is purchasing long puts. These long puts, purchased in favorable locations can take some of the risk off the table that the long portfolio holds in overbought situations. An "umbrella insurance policy" can be as easy to implement as purchasing puts on the SPY ETF.

The bottom line is fundamentals and technicals are always updating and they are always causing us to refresh our trading plans. Maybe our ongoing analysis causes us to enter trades, maybe to exit trades and maybe to monitor or as I call it, "massage" the trade.

Happy Trading

Brian

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

So the question is. What will get the SPX to break out of its tight range. And what, opportunities do we have while it is in its current range.

First, what will get things to change. It could be a fundamental event such as an economic calendar event - a speaker and/or an actual scheduled data release. If you aren't following the economic calendar, you may find yourself behind the eight ball on trades. Why? Well, big moves in the markets have been a result of speakers, interventions and events such as bond auctions in Europe. Recent ones have gone well, but the next one could be bad.

In the meantime, a range bound market provides plenty of opportunity. We are bouncing between support and resistance and these areas can become trading opportunities that provide a positive risk to reward ratio. As always, there aren't any guarantees, so always use stops and targets that are pre-defined using technical analysis. Using technical analysis assures you that you are realistic about gains and losses based on the charts.

So the question I have for you is: when the SPX hit 1392 yesterday, was that an opportunity to enter a swing trade to the short side and if SPX goes back into its previous range, where will you be realistic about taking profits off the table?

Happy Trading

Brian

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Technically, we have the SPX moving back towards the lows at 1360. Besides this recent low at 1360, support could also come in at the "psychological level" of 1350. (click to enlarge)

Past performance is not indicative of future results

The next chart shows the XLF - an ETF that represents the Financial Sector. This can be viewed as one of our "bellweathers" as many traders and investors look to financials to set the trend. You can judge for yourself if it is a leader or lagger as you compare it to your watchlist. The point of looking at it is to learn "sequence". Is the up trend sequence changing? We can classify that it may change if a new low is set if we violate 14.94. We will then have a lower high and a lower low, which will make it difficult for XLF to retrace all the way back up to its previous high of 15.98.

Past performance is not indicative of future results

This pickup in the VIX that I mentioned is correlated to a move lower in equity prices. This pickup in the VIX is also an exciting time to look for opportunities as the markets provide larger trading ranges.

Happy Trading

Brian

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.