Hello All,
We had a fairly uneventful Monday aside from the dip and recovery in oil. Focus still seems to be on the dollar so we'll have to see what the change in commitment of traders will be tomorrow in reference to last weeks 50/50. There aren't any major reports out tomorrow, so the lack of fundamentals may provide for another slow session.
1) Hold Mar. Emini S&P shorts from 1133, with a 1144 stop. Exit 1120. Floor support is at 1120, and given the markets inability to muster up a significant rally today we should see a slight setback tomorrow. At best we may only see 1125 where we may want to exit and re-enter after Wed. Crude inventory report. The calm before the storm with Wierd Wally Wednesday as a precursor to next weeks option expirations.
2) Hold Mar. Crude oil shorts from 81.80, with a 83.20 stop. We were able to get a glimpse of how quickly this market can begin to slide, but were also reminded of the current markets trend and its ability to ignore fundamentals. We have API and DOE data coming up, but with all the bearish news over the past few weeks we may actually need to get a bullish report to crack this market to the downside. With stockpiles rising week after week we have to note that the forward curve is flattening out considerably. A 12 month contango has dropped from $8.32 per barrel to about $2.50 per barrel in the last 3 months. If we can get a close below $81 tomorrow, I am confident we will see $77 into next week.
3) Sell Mar. Euro on a stop at 1.3544, with a 1.3605 stop. Given its current weakness and the fact that gold and silver are also looking weak, leads me to believe that any flight to quality will go direcly to the dollar which will inevitably fuel the downside pressure. A stronger dollar goes hand in hand with higher yields which plays into the big sell-off in bonds on Friday. Resistance on the dollar is 80.90, so a breach of that level to the upside should coincide with our entry.
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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