Trade Recommendations for Thurs. April 29th

Hello All,
 
The world remains focused on the Euro and for due reasoning.  Standard & Poors cut Spains credit rating this morning, which led to an initial drop across the board, but we must keep in mind that the rating wasn't reduced by neither Moody's or Fitch.  Whether Portugal or Ireland will be the next shoe to drop, I believe the 'news' has already been factored into the market.  We have had enough upside momentum in the S&P, Crude, and Euro to mount a plausible reversal.  It remains in the hands of Germany's Angela Merkel to decide when to actually put the bailout into action.  Roughly 60% of Germans are against the bailout, yet the Germans know that if they do not act it will hurt the euro as a whole which in turn hurts Germany.  We must compare Greece's $357 billion dollar economy at 2.6% of the euro zones $13.6 trillion dollar economy and to Germany's $3.65 trillion dollar economy.  There are talks now that the 100-120 billion dollar bailout may be increased to as much as 800 billion euros to encompass all that may come forth.  It doesn't seem to be a matter of 'if' rather a matter of 'when' the bailout will be approved.  "Why the fire department has been scratching its head instead of operating the pumps, I don't understand" said former German foreign minister, Joschka Fischer.  The cost of not acting at this point in time is far greater than the cost of the bailout.  This reminds me of the first time we tried to pass our $700 billion bail out package, upon failure we lost $1 trillion in stock value in 1 day.   The ramifications are evident, and it may have very well been a different story had their not been elections coming up, but I believe that Germany can wait no longer.  There is a good chance that we will receive favorable news overnight that will lead to a recovery in the euro to 1.37-1.39 over the following 2-3 weeks.
 
The S&P has support at 1186 and 1179, with resistance at 1195 and 1204, breaches of these levels will lead to new highs towards 1222 and 1234.  The Euro has support at 1.3160, with resistance at 1.3231 and 1.3285, a breach of these levels will lead to 1.3442 and 1.3538.  Crude's inventory report showed a build of 1.9million barrels compared to API's build of 5.4 million barrels.  Regardless of a build or draw the market keeps buying it up.  Crude has support at 82.10, with resistance at 84.06, a breach of this level would lead to 85.27.
 
Big stops are necessary to trade futures in these conditions, but would be safer to buy on breakouts.
 
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.

Trade Recommendations for Wed. April 28th

Hello All,
 
The news of the day was Standard & Poors cutting Greek bond ratings to junk, and reducing Portugal's by 2 knotches.  Not necessarily surprising news, but officially titled as of today.  The Euro put in a 1 year low, and most outside markets followed by taking out the lows from last week.  Technically, the charts require a medium sized correction which in my calculations could equate to a 700 point rally in the Euro.  Speculators are quick to over-react in my mind, and just enough to take out the stops below.  The chances of the European Union allowing Greece to default would set-off a dominoe effect of unnecessary ramifications.  The chances of additional support for Greece out-favor a default.  The Euro is currently rebounding on speculation that the IMF will increase its share of financial aid to Greece by 10billion euros.  The combined 45 billion euro loan from the EU and IMF may be increased to 70billion euros to prevent further deterioration.  The EU President and the IMF Director are set to meet with German leaders overnight, as Germany is set to provide the biggest individual loan to Greece.  We have big things to come tomorrow, as we also have our Crude DOE report at 7:30am PST and our FOMC announcement at 11:15am PST.  Todays API data showed an increase of 5.4 million barrels of crude, yet the market brushed it off as it may have already been baked into the cake.  If we can get a much lower report tomorrow morning, it could possibly poise itself for higher prices into the Fed announcement.  Overall, I expect technical bounces going into the FOMC announcement, and then depending on what is stated we may return to a downside correction.  However, it is more likely than not that the rates and vocab will remain the same, which should put some downward pressure on the dollar as US assets will look less attractive.  And with a little icing on the cake, the astrologer in all of us must note a full moon tonight.  If you've been trading long enough, you will begin to attribute outside 'powers' to signal reversals.  All in all, we ended up giving ourselves a bailout and it only increased the value of our dollar, and I expect the same to come from the Euro.  This only comes at a time when political pressure may prevent aid until after the German elections, but the demeanor in which it is handled could influence voters perception.
 
Not worth trading the choppy action tomorrow, but I favor the long side of most markets, especially Gold as there is a definite flight to quality, and we should be on our way to testing the 1225 region.  This should 'normally' coincide with a lower dollar, which wasn't necessarily the case today, but if the favored scenario comes through we should consider these levels as superb buying opportunities for outside markets.
 
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.

Trade Recommendations for Tues. April 27th

Hello All,
 
It feels as though the markets are poised for higher prices going into Wed. FOMC announcement.  I expected a quiet market prior to the last announcement, but I suspect they'll continue to push higher again.  We put in a new high on the S&P and I think the market should stay above 1203 overnight and shoot for my 1224 target from last week.  With respect to the Euro, Germany is now giving conditions to be met for the loan, but I doubt much will get done until after the May 9th German election.  We must also note that there is the May 6th election in the UK, which could hold the markets fairly standstill until then, which is fine by me.  The Euro peaked above 1.34 at the open of the evening session, support is at 1.3334 and we should have resistance at 1.3450 and 1.3507 (back to the gap). 
 
1)  Buy June Crude at the market (83.82), with a 83.10 stop.  Exit 86.22.   We have Consumer Confidence set to report tomorrow, along with API data in the afternoon, followed by DOE on Wed. morning, which is then followed by our FOMC announcement.  This is the only market that regardless of what is reported, we head higher.
 
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.

Trade Recommendations for Wed. April 21st

Hello All,
 
I anticipated todays action, but didn't have the nerves to follow my guts with all the looming news.  The S&P is knocking on the door and should continue to post new highs into next week.  We had short covering in crude with May expiration, and todays API data was bullish with respect gasoline/distillate inventories in spite of the grounded airlines.  The $84 region basis June has 4 levels of resistance, so once we break above $85 we will probably want to be on board.  A concurring DOE report in the morning will provide the strength necessary to push all markets higher.  The Euro is attempting to complete its pattern around 1.3382 before heading higher. Strength in outside markets should hopefully rollover to the Euro, as it is the only market covered in ash.
 
1)  Buy June Emini S&P at 1207, with a 1196.50 stop.  Exit 1222, or 1229.  So it's turning out that we did have an overreaction to the Goldman Sachs news, and quarterly earnings are proof that we're doing just fine.
 
2)  Buy June Crude at 83.42, with a 82.70 stop.  Exit to be determined.  Or Buy June crude on a stop at 85.30, with a 84.05 protective stop.  Crude oil inventores dropped 774k barrels, gasoline dropped 1.7m barrels, and distillates dropped 3.1m barrels.  We'll need similar numbers to come in tomorrow to get the desired scenario.
 
3)  Buy June Euro on a stop at 1.3495, with a 1.3435 protective stop.  Exit 1.38.  The market should find foothold around 1.3382, but the trade would not offer a good risk reward if you were trying to pick a bottom.  Thus we'll buy the market when she breaks out uptop.

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.

Trade Recommendations for Tues. April 20th

Hello All,
 
It seems as though the downward pressure from the Goldman Sachs news and the repurcussions of the volcano in Iceland could be fading. Most markets are attempting to bounce, however we're not out of the woods yet.  Most downside patterns as of late, never really completed which allowed for continued strength to the upside.  The question is whether that will be the case this time as well.  Tuesday will fare to be an important day as the market can go either way.  For the most part we will continue to be in a congestive triangle as we continue to sort out the news.  Europe should be running some test flights overnight, and you can only begin to fathom the amount of money being lost from all the grounded airlines.  And the crazy part is that the last time this volcano erupted, it went on for a year.

1)  Sell June Emini S&P at 1190.25 on a stop, with a 1201 stop.  Exit 1173.  The S&P has retraced 50% of its drop and is now back above the uptrending channel which was broken on Friday.  It's possible that we may have simply overreacted with regards to the Goldman news, and now we can make a case to stay above this 1195 region over the next day or so to restore some faith in the market and continue the quest for new higsh.  If we begin to breakdown, we can possibly see a max of 1173 which is a 24% extension of the current fall.

2)  The Euro didn't quite make it to the 76% retracement level of 1.3382, and if weakness continues that should be the bottom end of the range.  If we can manage to break above the 1.3540 region we would then attempt the 1.36 region, and a breach of that could lead us to 1.38 quickly.  I'd rather play this market during the day than have some orders parked overnight.  Too many things surrounding the volcano situation which can easily affect this market.
 
3)  Crude oil is poised for a volatile day as tomorrow the May contract expires.  There are too many resistance levels in the $84 region basis June to properly trade the market.  We would need an initial break of 84.14 to set things in motion, but a lot will depend on the outside markets.  Should be a good day for initiating strangles as there should be an abundance of speculators on both sides of the market.
 
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.

Trade Recommendations for Wed. April 7th

Hello All,
 
Choppy action in anticipation of tomorrows crude report and rate decisions on Thursday.  I don't think any decisive move will be made until Thursday morning.  Our orders from last night just barely missed their entries for the S&P and Euro, and now the proper risk/reward isn't there.  I'd love to be able to top pick these markets perfectly, but I've got to give myself at least a window of 1 week to get close.  I'm already 2 days into that 1 week window, so hopefully we'll be able to see some confirmation over the next session.  The downside for foreign currencies looks promising, but the strength in stocks and oil throws a wrench in the equation.  The S&P would still need a break below 1174 to signal a short, and crude would need a break below 85.80 to add to the pressure.  The Euro is well on its way to 1.3311, and should be there by morning to coincide with support levels for relative markets.  Let's see what happens overnight and we shall be ready to sell into weakness if we are presented with the opportunity after the DOE report.
 
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.

Trade Recommendations for Tues. April 6th

Hello All,
 
My timing for a topping scenario seems to slightly in effect for a few outside markets, but stocks and crude maintain their resiliency.  The DOW is too close to 11000 to not attempt cracking it, which may drag out a few more days, but isn't necessary.  The foreign currency markets should portray a lot of indecisiveness as Australia is having their FED meeting overnight, and the Bank of England and ECB are to meet on Thursday.  Only the RBA is set to adjust its rate policy and the minutes with respect to the ECB and BOE will deem more important to close out the week.  Overall, trouble still brews with Greece trying to find financing for its debt, so your bias should be to the downside.  I'd prefer selling into weakness rather than trying to top pick, but if offered a good price we've got to take it.
 
All in all, we're seeing 18-19 month highs in most markets, which correlates to levels seen before Lehman Brothers collapse.  Time sure does fly.  Profit taking should begin to set in for fund managers that actually purchased near the bottom, and fresh sellers will begin to speculate from these higher levels.
 
1)  Sell June Emini S&P on a stop at 1174, with a 1188.25 protective stop.  Exit 1158.00. Or Sell June Emini S&P at 1189.00, with a 1212.00 stop. Exit 1148.00.  If the market can begin to breakdown, we can count on selling through tax day.
 
2)  Sell June Euro at 1.3448, with a 1.3496 stop.  Exit 1.3341, with an extended target of 1.3311.  We'll continue to press on the Euro with the same time frame into mid April, which would coincide with a double top or new high for the dollar index.  As long as Greece continues to be in the headlines, sell sell sell.
 
3)  Sell May Crude on a stop at 85.80, with a 86.65 protective stop.  Exit 84.40.  Surprise, surprise.  The market continues upward against all fundamentals.  Todays breakout signals a possible test of $88, but I believe we should have a minor dip to the mid-84's, rally to 88, and then a sudden drop to 81.  And all of this can occur by......yes, tax day. Last minute tax selling triggered by next weeks DOE report.
 
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.

Trade Recommendations for Fri. April 2nd

Hello All,
 
Tomorrow is Good Friday and we have an extra abbreviated session with all markets closed by 8:15am PST.  Unemployment data is set to be reported at 5:30am PST, and I don't recommend trading with thin holiday conditions.  We should see a reaction to the data on Sunday night rather than tomorrow morning.  Analysts expect an increase of 180k jobs for the past month, however I have a feeling we will get an exceptional number around the 300k mark. But we must observe how much they revise the previous two months as well.  Overall, I expect the data to be dollar supportive which would signal a reversal of current trends, which plays into the 3 day weekend.  Just an observation over my career, that we see trend reversals over 3 day weekends, so I would suspect weakness in most market to begin setting in Monday/Tuesday.
 
I wish you all a great weekend, and we'll be ready to tackle the markets come Sunday/Monday.

Best,
 
Arman Vahdatinia
Futures & Options Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com
 
*There is a risk off loss trading futures.  Past performance is not indicative of future results.