Futures Trading Recommendations for Tues. July 20th

Hello All,
 
We saw a sea of red today across most markets and it became evident that Friday's rallies were for the most part a short squeeze to close out the week. The S&P held fairly steady amidst the weakness in outside markets, so we have to respect that and assume that if we cannot break below 1050 over the next couple of days we should be set to rally back above 1100.  This would entail that the retracement we've had in treasuries is a simple bullish correction, but it's too soon to tell.  The Euro continues to be relentless ahead of stress test results for the 91 European banks on Friday.  Nobody can possibly expect positive results from these tests, but will they actually buy the fact?  Investors out, traders in.  I would expect to see 1.31 before 1.28, so we'll hold out a tad longer before we sell some call ratios.  With respect to crude, the support is more evident as the market is unable to break the 75.50 region.  The August contract expires tomorrow, so we'll pull profits and roll to September.
 
1)  Hold Sept. Emini S&P shorts from 1074, lower protective stop to breakeven at 1074.  Exit 1052.  Look to re-enter based on how she acts around the 1050 level.  Although the market took out Friday's low we rebounded most of the day and then withstood another hit from IBM's earnings falling short of forecasts.  Downward targets of 1048, then 1043.  We still have hundreds of companies left to report earnings over the next few weeks so we will see how transparent the 'slowing' economy is.
 
2)  Sept Euro - Stand aside.  The Euro continues to rise ahead of the stress test results as speculators evidently anticipate some decent news that will wane fears of insolvency and that the credit crisis will not worsen.  The banks will most definitely need an influx of capital, but people are optimistic that it will be a reasonable amount that the markets can provide.
 
3)  Exit Aug Crude shorts from 77.60 at the market (76.60).  Re-enter by selling Sept Crude at 77.20, with a 78.05 stop.  Exit Tues afternoon.  Look to re-enter after DOE data on Wed.  Crude advanced for the second day as the dollar continued to slide and China's purchasing power came into play.  Resistance is at 78, support is at 76.40, 75.80, 75.03, and 74.20.  A true barometer of our economic recovery, it's possible tomorrows August expiration and API data may be the catalyst to influence all outside markets in this time of uncertainty.
 
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.