How to trade Quiet Summer Market

The market has been very quiet and less liquid the past month. Mainly this is due to summer inactivity when most fund managers go on holiday. Having said that, if you were a swing trader these past months it has been very difficult to trade. The most difficult thing is to sit there and wait for your trading opportunity. This may take a very long time. Patience I find is a killer for new traders. One way to to offset this is to go into the shorter times frames. What I have found is that the market ebbs and flows in many different directiions. If you were to give me a chart and tell me to guess what time frame it was in, it didn't really matter to me. What really matters is how the price action trends. I've seen 5 min charts trend so well that you could make a killing in the market. Same could be said about 15 min. charts or even 1 hour charts. The only other factor is the time. Price action on the 5 min charts are faster than 1 hour charts. I truly believe when we see things in clarity, this is when our trading excels. So don't just sit there on the 4 hour charts. Learn to read lower time frames and you will see greater success.

Looking Ahead: August 26 through August 30, 2013

Equities mostly declined last week as investors worried about what would be said in the FOMC minutes. Mostly favorable economic data in the industrial countries helped to neutralize the impact of the minutes. Growth in both Germany and the UK picked up in the second quarter — certainly good news. Further, flash PMI readings tended to substantiate growth going forward and not just for Germany and the UK. China’s PMI surprised in edged over the breakeven point with a reading of 50.1 indicating that manufacturing is stabilizing — certainly good news to supplier countries. The last week of summer is already here! As always, the last week of the month is a busy one with new economic data from Europe and the usual slew of releases from Japan. Investors will shift their attention to FedSpeak as they gear up for the FOMC September meeting.

Looking Ahead: August 19 through August 23, 2013

Investors continue to be obsessed with the Federal Reserve’s next move and in the process could be ignoring mitigating information that could delay any cut back in stimulus. Most equity indexes advanced on the week except those in the U.S. The last two weeks of August are typically slow with light trading. Data releases in Europe are typically deferred during this time as well. Investors will wait for September before making any dramatic moves, ceteris paribus.

Is this the bottom of Gold August 2013?

Looking Ahead: August 12 through August 16, 2013

The news once again, revolved around central bank activities. Economic data were mostly positive in the UK and in China but mixed in Canada. Investors continued to focus on the Federal Reserve and when it will begin to taper bond purchases.

 

There are no major central bank meetings scheduled for this week and the Bank of Japan and Bank of England meeting minutes are expected to give little illumination to policy going forward. It is vacation time in Europe and things will quiet. The major event will be the release of flash estimates of GDP for Eurozone members. Japan will also release its first estimate of second quarter GDP.

Looking Ahead: August 5 through August 9, 2013

Four central banks met and left their respective monetary policies unchanged. Economic data were mixed. New data from Europe indicated that the economies there are beginning to stabilize. In Japan, the data including industrial output, manufacturing PMI and retail and household spending were negative. In the U.S. results were mixed as well, with the employment report disappointing while indicators of manufacturing activity picked up.

 

After last week, the coming week almost seems peaceful. The Reserve Bank of Australia meets as does the Bank of Japan. The betting is that the RBA will lower its policy interest rate while the BoJ will sit tight. Also on the calendar are the monthly deluge of July data from China and a slew of service and composite PMIs