Hello All,
We're back into earnings season and had a nice lift after Alcoa's release. I would expect more positive reactions over the next week before we get back to a bearish tone. Tech companies are at their lowest valuation in 2 decades with their highest level of cash on hand as well. As companies begin to spend, even in a slowing economy, it will naturally create growth. The Euro has fallen from its highest level in 2 months on speculation of the stress test results due to release on the 23rd, which will probably not provide as much detail as many would hope. Crude is trading near a 3-day low as an inverse relation to the dollar as it strengthens, and I'm curious to see if we'll have another big drop in inventories this week. Patterns are not yet complete to the upside for all 3 of these markets, so we'll use tonights/tomorrows pullbacks as buying opportunities.
1) Buy Sept. Emini S&P at 1068, with a 1060 stop. Exit to be determined. First initial exit target is the 1086 region, if that goes then we have a good shot at 1100 before the next major sale sets up. There's always choppy action with earnings, so we'll see what type of fundamentals will be thrown at us day to day.
2) Buy Sept. Euro at 1.2515 and another at 1.2480, with a 1.2430 stop. Exit 1.2820. The exit target may seem a bit far fetched, but I'll have to trust my numbers. Not exactly sure what type of catalyst we'll get for those numbers to manifest, but the energy coincides with my theory for outside markets.
3) Buy Aug. Crude at 73.20, with a 72.30 stop. Exit 77+. We'll hold out for slightly lower numbers than I would like to given API being released tomorrow. Don't necessarily need to be long in the morning, moreso towards the afternoon.
Overall, we'll give the bears some room to play before they tire out. =)
Best regards,
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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