Hello All,
The risk trade seems to be back on with improved housing data even amidst lower consumer confidence. The Euro and S&P edged higher yet closed the day practically unchanged, but the fresh interim highs will provide the bulls enough fuel to surge on. The significant moves of the day were the black gold running out of steam below $80 and nosediving along with yellow metal putting in new lows. API data reported this afternoon was somewhat bearish, but we'll have to wait and see what the DOE reports tomorrow given the fact that production was somewhat halted last week with the tropical storm scare. And with gold hitting a fresh 3 month low on option expiration, we will have to wait and see exactly how much damage is done technically or if its simply due to a rollover and strike price gravitation.
1) Buy Sept Emini S&P at 1104, with a 1095.75 stop. Exit 1132. We continue to put in new highs during this earnings season and we actually closed the day practically flat year to date. Double dip fears seem to be nothing but a ploy to attract fresh meat to take to the cleaners. We'll have to keep an eye on the Euro, as she continues to hold stable and rise this trend will continue.
2) Buy Sept Euro at 1.2990, with a 1.2910 stop. Exit 1.3160. She continues to hold strong and the 4th time above 1.30 was the kicker to a fresh new high. One can also make the case that the Euro/Gold trade is continuing to unwind, and I would suspect to see this correlation stall or reverse by Sunday.
3) Crude Oil - Await inventory data, look to possibly buy on a stop around 78.50. API reported a build of 3.1million barrels, however I feel tomorrows DOE data will be the exact opposite and spur a short covering rally. If the risk trade is back on, and the dollar continues to get knocked down, there is no reason for this market to be below $80 at this juncture.
Best,
Arman Vahdatinia
Futures & Options Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com
*There is a substantial risk of loss trading futures. Past performance is not necessarily indicative of future results.
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