Sideways to lower to end the month...

Hello All,

Fundamentals aside, these rallies will be met with profit taking on the last day of the month.  Depending on the strength of tomorrows selloff, we will determine as to which side of the fence we want to be on Sunday. It is currently viable to generate credible risk/loss scenarios for the bull case, so we will attempt to hold off for the best possible pricing until we have proof of solid technical damage.

1)  Buy June Emini S&P at 1336, with a 1326 stop.  Exit to be determined.

2)  Buy June Crude oil at 110.30, with a 109.20 stop.  Exit above 115.

3)  Buy June Euro at 1.4670, with a 1.4540 stop.  Exit to be determined.

We probably won't see these numbers until Sunday if I have the correct pattern.

Best,

Arman Vahdatinia
President, Chief Market Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a substantial risk of loss trading futures and options.  Past performance is not necessarily indicative of future results.

 

Bernanke stays the course, leaving the dollar without a friend..

Hello All,

The markets charge on as there is no change in the Fed's policy.  Gold climbed to a new high as inflation forecasts were projected higher, but downplayed to only be temporary.  The $600 billion QE2 will continue through expiration on June 30th, and interest rates will remain low for an 'extended period of time' as we grow at a moderate pace.  During his briefing we became aware that 'extended period of time' refers to at least a couple of meetings.  With the dollar at fresh 3 year lows, not too far off from an all time low in 2008, it is evident that solid growth is more important than a solid dollar.  Dropping for the 7th straight day in a row, the longest streak since Dec., the dollar has yet to find a friend as the Euro hones in on the 1.52 top at the end of 2009.  Crude oil climbed back from an initial drop after EIA reported a build of 6.2 million barrels for the week, which goes to show fundamentals are out the window.  At this point, I remain skeptical closing out the month as we have GDP and unemployment claims due tomorrow.  We are not trading technically, nor fundamentally, rather by momentum which leaves me uneasy.  It seems as though these markets are about to go vertical.

We'll get our rest and be ready for some action in the morning.

Best,

Arman Vahdatinia
President, Chief Market Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a substantial risk of loss trading futures and options.  Past performance is not necessarily indicative of future results.
 
 
 
 

FOMC - unprecedented briefing..

Hello All,

Equities end the day at 3 year highs on boosted consumer confidence and continued positive earnings.  Based on the days action you would have to conclude that higher commodity prices are still in the cards.  As much as I would like to think it's time to start tightening the belt, it's never that easy after a large meal, rather it seems as though Bernanke will opt for some dessert.  Any hints towards the end of QE2, or growth projections will give clues as to whether he will be hawkish or continue to support risk.  Given the fact that Bernanke will be holding an unprecedented briefing after the announcement to answer questions is for one of two reasons:  1) it literally took him less than 15 minutes to raise rates (as he mentioned in previous announcements), or 2) to keep investors focused on the reasoning behind the statement rather than overreact in the markets.  When in doubt, stay out.  Major reports will either make you or break you...

If it weren't for the announcement and we were trading purely off techincals, my recommendatinos would be as follows:

1)   Buy June Emini S&P at 1336, with a 1326 stop.  Exit Fri.

2)  Buy June Crude oil at 110.30, with a 109 stop.  Exit next week.  API inventory data showed a build of 4.9 million barrels today, we'll have to see what EIA states tomorrow.  And you never know when NATO will be dropping another one.

3)  Buy May Mini Silver at 43.30, with a 41.20 stop.  Exit next week.

Best,

Arman Vahdatinia
President, Chief Market Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a substantial risk of loss trading futures and options.  Past performance is not necessarily indicative of future results.

Thoughts for the day...4/26

Hello All,

The beast could be going bust.  I wouldn't touch silver with a 2 foot pole as all eyes are set on Bernanke's speech on Wednesday.  The contrarian in me gives me more confidence to believe that we will indeed be presented with a statement to shift the tides.  I believe that it is time for Bernanke to pull the emergency brake and join the rest of the world in curbing loose monetary policy and higher inflation.  With positive corporate earnings, and the end of QE2 near, one would have to assume that it's time to ween off the Fed's pacifier.  Support in the dollar would give reason to end the vertical advance in metals, and the skewed pricing against the basket of currencies.   Net long positions in the Euro are at a 3 year high, and you would have to imagine the ramifications if everyone hits 'go flat' across the board.  But, at the end of the day, nothing really matters aside from whether Bernanke deviates off course.  If we don't get any change in his verbage, the dollar sell-off will continue, and the action we saw today, that will most likely continue into tomorrow, will simply be viewed as position squaring ahead of FOMC.  Respectively, the whipsaw action could have silver hit 43 in the coming days, and then 52 by next week.  On the energy front, there was a direct hit on the Gaddafi compound which escalates the intention to take out the lunatic.  This could be favored as bearish with the end of the Libyan crisis near its end, but we have to shift the contagian back to Syria as tensions are escalating without much press coverage.

No reason to trade overnight, expected to be lower....congestive.

Best,

Arman Vahdatinia
President, Chief Market Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a substantial risk of loss trading futures and options.  Past performance is not necessarily indicative of future results.

 

Thursday, 4/21

Hello All,

The bulls charge on positive earnings and better than expected housing data.  EIA reported a draw of 2.3 million barrels of crude which fundamentally agreed with practically every market rallying on a weaker dollar.  The bull trends not only remains in tact, but have gained considerable momentum.  We have unemployment claims and Philly Fed out tomorrow.  Will we see a round of profit taking prior to the 3 day weekend? Or would that be the beginning of a turn?  Historically associating good odds towards trends changing over long weekends.  One would have to play either side with fairly wide stops, but I wouldn't quite attempt to short any market over the next two sessions.  It would probably be wiser playing mini contracts on the long side if a pullback ensues. 

1)  S&P - Support at 1324, 1313, 1300. Resistance at 1341, 1352, 1368.

2)  Euro - The breakout has left many participants stumped, but you can't fight a charging bull.  I expect this market to surprise everyone and continue towards 149.

3)  Crude bulls are back in the drivers seat. I expect to see 115-116 over the next few sessions, but given volatility a $3-$4 pullback would have to be accounted for as part of the bullish ascent.  These conditions aren't for the faint of heart, so stick with the minis and chalk up a bit more on your stops.

I'm not ready to go on the offensive trading futures until I have a tighter grasp on wave counts come next week.  In the meantime, hats off to the bulls...

Best,

Arman Vahdatinia
President, Chief Market Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a substantial risk of loss trading futures and options.  Past performance is not necessarily indicative of future results.

Market Analysis for Wed. April 20th

Hello All,

The S&P has bounced on positive earnings, trapping shorts that jumped aboard the downgrade scare.  Given that the market traded inside the previous days range, we anticipate resistance at 1320 and a break above could possibly lead to 1365 before we see real trouble.  The timing of this last thrust upward could play into next weeks Fed meeting, at which point talks about ending QE2 could ultimately deflate the rally.  It is only a matter of time before we stop printing money at this rate, which would ultimately begin to prop up the US dollar.  As difficult as it is timing a big turn in the markets, I would have to peg it for the next 30-45 days, but the real turn will not only depend on the end of our quantitive easing program but the aggressiveness behind possible interest rate hikes to close out the year.  With lending rates near 0, financial institutions have no reason to lend and grow our economy naturally; rather all that 'free' capital continues to inflate the markets and will ultimately hinder growth.  There is definitely fear driving these markets as gold and silver keep marching on.  Aside from being a contrarian at record levels, there is still no end in site as metals can still go vertical, raising the question as to why equities are valued at these levels.  The pressure was put back on the dollar today, which has now closed a slight gap on the charts from Sunday evening.  As long as the DX stays above 74.80, I remain positive that foreign currencies will not put in new highs on their recent runs.  But if we do break below, then I would rather anticipate the trend to turn in the first couple weeks of May.  Keep in mind that markets are closed this Friday, and given the technical possibility that most markets can really go either way at this point, we may be in store for a few more inside sessions before we recieve another catalyst.  API reported a build of 667k barrels of oil, and the problems stemming from Nigeria and Libya have kept floor support at $106.  Technically we can either be headed straight for the $115 area, or we still have a chance of seeing the $102 region before we see new highs.  June Crude is currently knocking on trend line resistance from the $114 high, with another level of resistance at the $110 marker.  EIA data and housing starts await us tomorrow, so we'll stay flat overnight. 

Best,

Arman Vahdatinia
President, Chief Market Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a substantial risk of loss trading futures and options.  Past performance is not necessarily indicative of future results.

S&P downgrade, China tightening, European debt woes...

Hello All,

Standard & Poor's downgraded the United States credit outlook from 'stable' to 'negative' on a not so positive budget outlook.  The S&P tumbled below the psychological 1300 support which could very well be the start of something bigger.  Some analysts feel that the reaction to the downgrade was overdone, hence the recovery into the close, so we'll have to see how she fares overnight.  China took measures to help curb liquidity by increasing bank reserve requirements for the fourth time this year to fight inflation in the world's second largest economy.  Crude oil tumbled on the news ahead of the May contract expiration, which may or may not have been magnified by rollover.  I continue to have my eye on the dollar index as it crossed above and closed at my 75.70 resistance noted from last week.  At the end of the day it's about which currency stinks the least, with a rise only evident in the dollar and yen. With Greek debt restructuring back on the table again the Euro had the biggest selloff since November.  All factors combined, we have Gold knocking on $1500/oz which has come a month later than I had expected, and with Silver closing in on the $50 mark we still have to respect the upside potential.

We remain cautious playing futures overnight as whipsaw potential is elevated.  We'll look into getting short come morning.  Possible targets are as follows: S&P 1265, Crude 102.50, Euro 1.4070.  On a good note, volatility is kicking up premiums, ripe for the picking.
 
Best,

Arman Vahdatinia
President, Chief Market Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a substantial risk of loss trading futures and options.  Past performance is not necessarily indicative of future results.
 
 

Can option ex for Crude add to the pressure?

Hello All,

1)  Hold June Emini S&P shorts, lower the stop to 1319.  Exit 1301.50.  Depending on how the market reacts around 1300 we may jump right back in as I expect to see 1260-1280 before its over.  Record 1Q earnings from JPMorgan, and a bump in retail sales helped the market from falling apart leading into Obama's speech.  The announcement of $4 trillion in deficit cuts over the next 12 years helped support the dollar, stocks, and treasuries.  We have unemployment claims and PPI out in the morning, along with Google reporting after the close.  It could be another whipsaw day, but I'm pretty confident the bulls aren't out of the woods quite yet.

2)  Sell May Crude Oil at the market (107.15), with a 107.70 stop.  Exit next week.  I still have my eyes set on the $102 region.  The slight stall after a two day $8 fall would have to be associated with the 7 million barrel draw of gasoline reported this morning.  Crude had a build of 1.6 million barrels, but going into the summer driving season the refined gasoline is the key.  A break above resistance could possibly lead to 110 one more time, but I remain skeptical of a bullish move on option ex.

3)  Stand aside Euro.  The market remains resilient for no apparent reason.  Would need a break of 1.4350 to bring more sellers to the table.  Still awaiting the US dollar to take out 75.70 to feel confident about a reversal.

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Best,

Arman Vahdatinia
President, Chief Market Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a substantial risk of loss trading futures and options.  Past performance is not necessarily indicative of future results.

Trade Recommendations for Wed. April 13th

Hello All,

While Alcoa's revenue numbers were disappointing to start off earnings, all eyes remained focused on the energy sector as it continued to put pressure on bulls.  Key resistance levels have been broken in the black gold, and if we were to match the $11 pullback in March, we would be looking for crude to fall to about $102 basis May.  We have option ex on Thursday, and it's a repeat of last month where the market dropped ahead of paying up on calls, granted the earthquakes were also a month apart.  Japan has raised its nuclear crisis level to 7, which is the same as Chernobyl.  In my opinion the bad news has yet to come, which could dramatically hinder global growth stemming from Japan.  We were unable to trigger a sale in the S&P, and for those that didn't get short intraday, we've got numbers for you.  JP Morgan is set to report earnings before the open tomorrow, so that will dictate trading until EIA data is reported.  On the currency front, we've seen a flight to quality in the Swiss Franc which was expected along with a nice bid in bonds, but ultimately we feel the flight to true safety has to be in the US dollar.  The dollar index basis June is trading at the nice round psychological level of 75, and inversely the Euro has traded up to 1.45.  Barring any additional technical support/resistance, nice round numbers are enticing to investors as they impact the human psyche.  I would expect a rebound in the dollar towards 75.70 as a minimum which will continue to pressure commodity prices.

1)  Sell June Emini S&P at the market (1312.75), with a 1321 stop.  Exit 1301.50. 

2)  Sell May Crude oil at 106.70, with a 107.70 stop.  Exit 105.30.  Tomorrows inventory report will be important as I expect it will determine whether we break through 105 or not.  Another market to watch is Silver, if she's held up well overnight, we may have a smaller chance of a breakdown in Crude.  The trade can get choppy here, but I do expect on seeing 102 by next week.

3)  Stand aside Euro.

If you would like to receive these updates in a more timely manner via email, please submit a request.

Begin trading alongside me. Request a free futures trading demo account and gain access to real time data, charts, and $50k in virtual cash.

Best,

Arman Vahdatinia
President, Chief Market Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a substantial risk of loss trading futures and options.  Past performance is not necessarily indicative of future results.

Equities & Oil.....do you buy or sell into the pullback?

Hello All,

1)  Sell June Emini S&P at 1317, with a 1324 stop.  Exit 1301.50.  We came to an agreement on our 2011 budget which would have been positive for stocks, but investors peeled some profits off the board ahead of 1Q earnings.   The tax season selling pressure I mentioned last week has come right on schedule.  And there's no telling as to how much of a negative reaction the markets will continue to have given the recent earthquakes out of Japan.  I expect to see 1260-1280 before real support kicks in.

2)  Buy May Crude oil at 107.30, with a 106.85 protective stop.  Exit 110. Or Buy May Crude oil on a stop at 109.25, with a 108.58 protective stop.  Exit 111.30.  The possibility of a cease fire in Libya gave way to a pullback in oil, but has come to no resolve.  Goldman Sachs recommended its clients to take profits on their CCCP trade from December, which contributed to the days selloff across the board.  Crude has broken through the March high support level of 108.40; the upward trending channel from the March low has also been broken and can now lead to a larger meltdown.  But given the bullish sentiment surrounding this market, we would have to assume that buyers will come in at key support levels.

3)  Sell June Euro at the market (1.4389), with a 1.4440 protective stop.  Exit 1.4240.  With the continued quakes in Japan, we should see a flight to safety in the US dollar and the Swiss Franc which should divert further upside in the Euro.

If you would like to receive these updates in a more timely manner via email, please submit a request.

Begin trading alongside me. Request a free futures trading demo account and gain access to real time data, charts, and $50k in virtual cash.

Best,

Arman Vahdatinia
President, Chief Market Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a substantial risk of loss trading futures and options.  Past performance is not necessarily indicative of future results.