Hello All,
Todays economic data certainly overshadowed corporate earnings, as cycles are definitely mixed after todays action. The dollar took a beating on downbeat US manufacturing and inflation data, which inversely supported all the foreign currencies. The foreshadowed economic downturn weighed on crude prices, yet the market was able to muster up a rally into the close. All week we have been battling conflicting signals which show a slowdown in the US economy's recovery on one hand, and strong corporate earnings on the other. The Euro has put in a 2 month high above 1.29, and the risk is shifting from Europe back to the United States. The rise in treasuries signals the possibility of another round of government stimulus in the future, which would entail the beginning of a double dip. I would imagine that we wouldn't get too much of a signal tomorrow, rather more of a possibility of a breakdown come Sunday/Monday.
1) Sell Sept. Emini S&P on a stop at 1074, with a 1087 protective stop. Exit next week. Or Sell Sept Emin S&P at 1106, with a 1114 stop. Exit next week. The market will most likely remain in a congestive pattern in the 1080 region tomorrow as I doubt CPI or Michigan Sentiment will create much of a stir. I don't normally like establishing new positions on Friday's but if a breakdown is imminent we'll want to get on board, and if higher prices ensue we'll consider it a blessing.
2) Sept Euro - stand aside. We were stopped out of our trade from yesterday, and it seems as though the market wants to test the 1.30-1.31 region. The question is whether we will get a pull back, and if so how much. Support now lies at 1.27, but we shouldn't expect that level to be tested until the middle or end of next week. End of the week profit taking may or may not set in, so we'll sit on our hands for this one tomorrow and observe. Ideally I would like to take advantage of call pricing here and implement a ratio credit spread in the next few days.
3) Hold Aug Crude shorts from 77.60, and lower the stop to 78.20. Exit next week. We managed to get aboard this trade almost perfectly, and the end of day rally goes to show this bucking bull doesn't go down without a fight. We'll lower our stop in case we're wrong as this market is poised to test $80 if our stop is taken out. There are too many wildcards during earnings season, but regardless of outside market influences, we have to conjure our trade based on a slowing economy for the time being.
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.
Todays economic data certainly overshadowed corporate earnings, as cycles are definitely mixed after todays action. The dollar took a beating on downbeat US manufacturing and inflation data, which inversely supported all the foreign currencies. The foreshadowed economic downturn weighed on crude prices, yet the market was able to muster up a rally into the close. All week we have been battling conflicting signals which show a slowdown in the US economy's recovery on one hand, and strong corporate earnings on the other. The Euro has put in a 2 month high above 1.29, and the risk is shifting from Europe back to the United States. The rise in treasuries signals the possibility of another round of government stimulus in the future, which would entail the beginning of a double dip. I would imagine that we wouldn't get too much of a signal tomorrow, rather more of a possibility of a breakdown come Sunday/Monday.
1) Sell Sept. Emini S&P on a stop at 1074, with a 1087 protective stop. Exit next week. Or Sell Sept Emin S&P at 1106, with a 1114 stop. Exit next week. The market will most likely remain in a congestive pattern in the 1080 region tomorrow as I doubt CPI or Michigan Sentiment will create much of a stir. I don't normally like establishing new positions on Friday's but if a breakdown is imminent we'll want to get on board, and if higher prices ensue we'll consider it a blessing.
2) Sept Euro - stand aside. We were stopped out of our trade from yesterday, and it seems as though the market wants to test the 1.30-1.31 region. The question is whether we will get a pull back, and if so how much. Support now lies at 1.27, but we shouldn't expect that level to be tested until the middle or end of next week. End of the week profit taking may or may not set in, so we'll sit on our hands for this one tomorrow and observe. Ideally I would like to take advantage of call pricing here and implement a ratio credit spread in the next few days.
3) Hold Aug Crude shorts from 77.60, and lower the stop to 78.20. Exit next week. We managed to get aboard this trade almost perfectly, and the end of day rally goes to show this bucking bull doesn't go down without a fight. We'll lower our stop in case we're wrong as this market is poised to test $80 if our stop is taken out. There are too many wildcards during earnings season, but regardless of outside market influences, we have to conjure our trade based on a slowing economy for the time being.
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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