Hello All,
Another interesting day. None of our entries hit from last nights report, but the initial downside direction was correct for the most part. We were expecting some more detailed information with regards to the EU's bailout plan for Greece, however plans are postponed to be released Monday/Tuesday. Greece's statement that it did not request any assistance provided immediate support, but just because you don't ask for a handout doesn't mean you're solvent. Overall there's too much trouble brewing in Europe and ultimately we've seen temporary highs in most markets at least for the next few months. Keep in mind we have an abbreviated President's day holiday session on Monday so I suspect we'll have Greece's plans revealed on Tuesday. I'm doubtful anyone would want to be holding any positions over a 3 day weekend, but todays strength could be continued tomorrow, only to be sold into early next week. The notable move in Gold is evident of a flight to quality. And you can also notice the big moves in the currencies as assets are being shifted out of Euros and into Australian and Canadian dollars.
1) Sell Mar. Emini S&P at 1086, with a 1095 stop. Exit to be determined. If the market were to extend its current rally by another 24% it would intersect close enough to the 76% retracement of the fall from 1100. Once again we may be asking for too much at 1086, but it would provide the proper risk reward. I think we'll eventually see 1000 sometime in late March, and depending on whether we can get crude ripping to the upside by that time, it will fuel acceleration to ultimately see 1200-1300 into July.
2) Sell Mar. Crude at 76.32, with a 77.17 stop. We came within 30 ticks of getting filled and if the market were to start heading back up to get us filled on the ES, I would suspect slightly higher prices than last nights target. We have our delayed DOE inventory report tomorrow due to the snowstorm, and we have to keep in mind we had a hugely bearish API report of a build of 7.2 million barrels. So lets see how tomorrows #s compare.
3) Sell Mar. Euro at 1.3747, with a 1.3790 stop. Exit 1.3511. We bounced off the 1.36 level which could be seen as a double bottom, but this market is ultimately doomed for the 1.32 region over the next few weeks. The bad news being deflected away from the US and onto Europe is actually re-stabilizing prices back to what we're use to with a fairly stronger dollar and the Euro trading at a fairer value.
4) Buy Mar. Jap. Yen at 1.1090, with a 1.1041 stop. Exit 1.1470. This is the only market that has been stagnant, and I'm assuming it will join the rest of the foreign currencies heading higher as the Euro continues to tumble. This can turn out to be a real nice positions trade for a week or so.
Best,
Arman Vahdatinia
Futures & Options Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com
*There is a risk of loss trading futures. Past performance is not indicative of future results.
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