Hello All,
Fear is here to stay for at least another week. Concerns in Europe with regards to Greece, Spain and Portugal are leading the fundamentals. In after hours action the Euro has gone beyond my 1.37 target, and could be vulnerable for a bigger push down to 1.35 before we see a retracement into Sunday/Monday, but there is no risk reward to be buying. There is some major unwinding of positions with regards to currency spreads and hopefully it will be done within the next few days to begin a new pattern. The biggest shock of the day was crude, and although it may have been an exaggerated move we have to respect market movement. I suspect Crude should stay within the 70-73.50 range within the next week, and I probably wouldn't feel too comfortable buying it until next Friday, as there is a slight possibility we can see 68 next week. With regards to the S&P, the bullish moves on Monday/Tuesday had me switch patterns, and now going back to last weeks research we should utlimately see 1035 to complete this correction.
Unemployment data is set to release at 5:30am PST tomorrow, and although I suspect a volatile move in the currencies, I wouldn't be surprised if its a dull reaction. Both Tuesday and Thursday this week, typically expected to be quiet days before reports have proven otherwise. Everything may already be baked in the cake. We shall find out tomorrow.
1) Sell Mar. Emini S&P at 1074.25, with a 1083.00 stop. Exit 1047.75. The A wave down from 1150 to 1070, was retraced 38% to the 1100 region, and a 24% extension would take us to 1057, 38% to 1046, and 50% to 1035. 1074 may be asking for too much to trigger a sale, but after all this craziness its better to try and get the best risk/reward.
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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