Hello All,
It seems as though our analysis is correct and the markets are topping on schedule. We have our FOMC rate decision tomorrow around 11:15am PST, and although it's fair to say that the rates will remain unchanged, the focus will be on the verbage of the minutes. Rates have remained near 0 since Dec. 2008, and with the given economic recovery it is only a matter of time before we really have to jumpstart the capital markets by getting interbank lending on its own feet. Could we be in store for rate hike verbage as early as the next meeting(April 27th)? As soon as they decide to drop the phrase "extended period", it would be extremely dollar bullish. My assumption is that tomorrows reaction will be in support of the dollar with continued hawkish speculation, which will continue to pressure commodities and foreign currencies. If that is the case, then we can see continued downward pressure in 3 waves through April 20th, with a slight corrective rally March 25th-30th.
1) Sell June Emini S&P at 1154.00, with a 1165.75 stop. Exit to be determined.
2) Hold April Crude oil shorts from 81.12. Use a 81.15 protective stop. Exit 77.00. She's the leader, so watch her take out the low of the day and the surrounding markets will tumble. It's funny how 'now' they realize demand isn't keeping up. Reactions are either too quick or too slow nowadays.
3) Sell June Euro at 1.3720, with a 1.3766 stop. Exit 1.3488. The market should remain steady going into the report, and then we should see a sell the fact reaction. And surprisingly, I anticipate we will continue to be rangebound for at least another week or two before descending to new lows.
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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