April 13, 2012 - Issue #631

In This Issue

1. Watch a Seasoned Market Veteran TRADE LIVE Using Order Flow Analysis
2. Trade The News April-May 2012 Market Outlook
3. Economic Calendar

Featured Articles This Week

a. How to Handle an Economic Implosion
b. Diagonal: Straight Shot to a Trading Opportunity
c. Public Pension Funds: Tens of Billions at Significant Risk

1. Watch a Seasoned Market Veteran TRADE LIVE Using Order Flow Analysis

Join us for a Webinar on April 17

Space is limited. Reserve your Webinar seat now at:
https://www2.gotomeeting.com/register/228463594 →

Cannon Trading is hosting Thomas DeLello, Founder and Head Trader at Order Flow Edge for a webinar - Order Flow Edge and understanding supply and demand

OrderFlowEdge is headed by 15 year veteran trader Thomas DeLello.

Thomas trades look for low risk profits as a function of trading what is real. By basing his market decisions on simple, objective ways in which to quantify Supply & Demand he effectively eliminates subjective emotions from his trading.
Thomas is very active in the ES S&P eminis and the Forex spot currency markets. He also trades currency futures, oil futures, and bond futures.

In this webinar you will learn:
* that Order-Flow is the driving force in the market. Change in order-flow precedes change in price.
* Understanding current supply and demand conditions in the market is the key
* How changes in order flow affect price
* Understanding current supply and demand conditions in the market.
* Identifying supply and demand imbalances in the market.

SEATS ARE LIMITED, SO DON'T MISS THIS SPECIAL FREE WEBINAR!
Risk: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

Title: Watch a Seasoned Market Veteran TRADE LIVE Using Order Flow Analysis
Date: Tuesday, April 17, 2012
Time: 8:15 AM - 9:15 AM CDT
After registering you will receive a confirmation email containing information about joining the Webinar.
System Requirements
PC-based attendees
Required: Windows® 7, Vista, XP or 2003 Server

Macintosh®-based attendees Required: Mac OS® X 10.5 or newer

2. Trade The News April-May 2012 Market Outlook

April-May 2012 Outlook by TradeTheNews.com

Stimulus Addiction

The first quarter of 2012 saw some dramatic changes in market sentiment as Europe found its equilibrium, the US showed signs of a sustainable recovery, and the Chinese economy officially downshifted. Global political forces finally regained the upper hand on contagion and bond market vigilantes, stabilizing European bond spreads, easing overstretched foreign exchange rates, and restoring some confidence in the stock market.

The first quarter centered on the questions of whether Europe could keep its unity, China could manage a soft landing, and politicians could restrain themselves from spoiling the economic recovery. The questions for the next few months remain the same, but we now have a few more answers. Europe threw up enough stabilizing measures to take Greece through an orderly default process. The continent still faces a looming recession and more political turnover, but it may be able to limit the impacts of these factors following the successful effort to save Greece. The Chinese miracle is entering a natural slower phase, and so far Beijing's planners have shown a steady hand. On the political front, Europe's leaders are tentatively forging ahead with plans for greater fiscal unity, Washington has called an uneasy truce until the presidential campaign begins in earnest, and the world community appears ready to tackle the thorny crises in Iran and Syria.

In this environment, equity markets got off to a blistering start in 2012, as some of the mountain of cash that fled into the bond market last year started to reallocate to stocks in light of an improving economy. The recent 10 percent drop in the price of gold could indicate a return of confidence, although the forex market still shows a muddled picture as the "currency wars" continue.

The sentiment shift is underpinned by central bank programs, namely the ECB's LTRO and the prospect for the Fed to launch QE3. These programs may be the final injections of extraordinary stimulus that central bankers will deal out, so it may be time for the markets to consider how to handle the withdrawal symptoms once the stimulus drains from its veins. Central bank chiefs appear to be wearied by the extraordinary lengths they have had to go to during this crisis, and are ready to plan exit strategies to gently break the market addiction.

Europe on the Patch

The question was raised last week at the ECB press conference, where President Draghi was quick to reply that banks are not addicted to cheap money. But how true is that statement? The situation in Europe has been shored up for the time being by the Greek debt swap arrangement, pledges of fiscal consolidation from EU governments, a dollar swap arrangement between central banks, and an "adequate" firewall agreement. Sentiment did not really turn, however, until the ECB was finally drawn into the fray with its innovative Long Term Refinancing Operations. The two LTROs greased the wheels of lending which indirectly helped prop up the sagging European peripheral sovereign market, easing Spanish and Italian 10-year debt yields back below 7 percent. The program bought Europe some time to enact its austerity measures and to work on improving "competitiveness" in the region.

3. Economic Calendar

Source: Moore Research Center, Inc.

* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.

** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.

*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!