Greek austerity vote looms.

Hello All,

Wall St. bought it up again in hopes that Greek austerity measures will pass in parliament, but given the low daily volume investors still remain skeptical.  1300 on the S&P remains psychological resistance as we've been range-bound the past week.  Focused on Greece, we all await tomorrows vote by early morning.  The Euro kissed resistance this morning at the down-trending channel from the previous two highs.  Ultimately, 1.44 and 1.4450 will prove to be major resistance and if the trade holds up into the vote, we would like to sell on a spike.  In my opinion, a default is imminent as Greece is not too big to fail regardless of how much neighboring nations have vested.  One bad apple ruins the bunch, it's a ticking time bomb.  In hopes of positive news out of Greece, Crude oil also rallied today having its biggest percentage gain in almost 6 weeks.  API reported a draw of 2.7 million barrels, and EIA analysts expect a draw of 1.7mm to be reported tomorrow. 

No trades going into the vote, but we'll be ready to jump aboard and sell the fact 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.

 

Trade Recommendations for Tues. June 18th

Hello All,

Stocks rallied today on positive news behind Greek's debt restructuring, with a proposed plan where the banks would roll over half of the money received from Greek debt to new 30yr bonds.  Ultimately, we are stuck in a range until we get this vote out of the way on Wednesday, as the headlines shift sentiment from day to day.  Over the weekend, billionaire investor George Soros stated that it was probably inevitable that weaker economies will be allowed to exit the Euro.  We all know the problems evident in Greece, and we're all well aware of the possible next shoe to drop, and unfortunately for Angela Merkel she could very well be the currencies undertaker.  The massive liquidation evident in 2010 was also based upon Greek debt issues, so why are we now valuing the Euro 20% higher? Because they are 'attempting' to fix the problem? Any type of bailout typically takes anywhere from 6-18 months before realization, so maybe calling out the demise of the Euro might be premature, but these problems are not going away.  With QE2 ending in a few days, the massive liquidation in metals has been evident in light of the 'safe-haven' trade one would assume during a potential Euro crisis.  One would then turn towards the US bond market, but she was also under assault today.  The only logical conclusion one can draw is that both the risk trade and the safe-haven trade are off for the time being, money is coming off the table.  On the energy front, oil is hovering above $90 despite breaking below briefly.  Leading into the 4th of July weekend, I would typically want to be long, but we're so close to closing the gap at 87.50 that I will continue to hold out for it a couple more days, and in the event we break hard below $90 that may open up another can of worms. 

1)  Sell Sept. Emini S&P at 1281, with a 1286 stop.  Exit 1267.

2)  Stand Aside Euro. Will sell into weakness if we get an early breakdown.

3)  Sell Aug. Crude at 91.10, with a 92.20 stop.  Exit 87.50.

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.

Futures Trading Recommendations for Quad-Witching...

Hello All,

We had better than expected housing sales and unemployment claims, although still above 400k. Nothing too dramatic today as we await quadruple witching tomorrow.  We're at a critical juncture where tomorrows action could either make it or break it for the bull case.  If we close below 1250, it's possible we may have another 100 pts underneath over the course of the next few weeks.  With treasuries testing their highs, I would have to expect a spike higher to take out some stops, which will inversely pressure equities.  The question is whether the markets will be able to recover from such action before tomorrows close.  Heading into the weekend, after a few days of liquidation on Greece's account, I would doubt many small speculators would want to be long.  The Euro firmed up on the day, but the Greek debt situation is not going away anytime soon and the last thing we want is another slide back towards parity, although it's difficult to imagine any other outcome given the lack of confidence behind restructuring their debt.  Now being compared to Lehman Brother's, the psychological ramification would be to sell and go away.  On the energy front, Crude held its own for the day on option ex as Nat Gas prices tumbled.  July crude futures will be going off the board early next week, so we may see rollover action in conjunction with tomorrows witching to continue yesterdays slide.  IEA raised its medium term oil price forecast based on increased demand in the 3rd quarter, but given technicals you would have to fade the news.

1)  Hold Sept Emini S&P shorts, with a 1277 stop.  Exit Sunday/Monday.

2)  Sell July Crude at 95.40, with a 96.70 stop.  Exit next week.

3)  Sell Sept Euro at 1.4150, with a 1.4208 stop.  Exit next week under 1.40.

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.

Greece - Fear - Liquidation

Hello All,

Greece fears pound across the board with hefty declines in the Euro, Equities, and Oil. The Euro had the largest 1 day slump since 2009, and the inverse effect on the US dollar pressured commodities into a sea of red. Crude oil slid more than 4% as the spread between WTI/Brent tightened as July Brent went off the board today. We have option expiration for WTI tomorrow, and it may very well continue its unraveling as we closed below key support at $95. Technically, resistance is at the 96.50 region basis July, and given thin conditions overnight their may be some whipsaw action before we attempt to close the gap on the charts from February around $87. It's make it or break it time for the bulls, but I wouldn't attempt to catch a falling knife. The S&P is projecting a test of 1240 for roughly a 10% correction off the 1370 top. The Euro will ultimately test 1.4050 then may get a short-lived bounce before trading under 1.40. If the US Dollar can break above 76.25, then 77 seems to be an easy target, with an ultimate target of 77.80.

1) Sell Sept. Emini S&P at 1267, with a 1277 stop. Exit 1244.

2) Sell July Crude at 95.90, with a 96.90 stop. Exit next week.

3) Stand aside Euro. 1.4270 seems like a long shot from here, but the only place to offer proper risk/reward on the short side. May attempt to purchase puts if we can get a bounce.

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. June 15th

Hello All,

Stocks rebound on not so negative economic data.  Retail sales reported a 0.2% drop when analysts were expecting a decline of 0.7%, but more importantly China reported strong output data and increased bank requirements.  Increasing bank reserve requirements would have typically put a dent in the markets, but that was not evident as investors shrugged off worries and praised the fact that China is navigating the second largest economy in a proper fashion.  The rally was also supported with the advance in Crude as the spread between WTI/Brent increased to over $23 at one point.  The confluence of supply/demand issues on the other side of the Atlantic provides fundamental reason for the premium, but it is difficult to assume the spread will widen any further than current levels given shipping costs.  API reported a draw of 3 million barrels this afternoon when expectations were for a draw of 1.5million, gasoline was up 1.1mm in comparison to the 1mm expected, and distillates were down 426k against the 1mm build expected.  As always, we await EIA data tomorrow morning to confirm these numbers, but it is difficult to expect much higher prices on the horizon as we have been on average sloshing between 97-103 for the past 40 days.  Our Euro trade was within ticks of being filled, but still retains the ability to retest upper resistance.  The Swiss Franc fell against the entire basket today, which continued Sundays decline prior to rollover Monday.  I expect 'fear premium' to be taken out of the Swiss Franc and lead to a test of the 1.1650-1.17 region over the next few days, which in turn may support the Euro more than I may have initially expected.  Overall, I remain a bear and will use these advances to sell at the higher end of resistance.  We'll be flat overnight, and await tomorrows reaction.

1)  Exit short Sept Emini S&P at the market. The market held up better than expected, so they may want to test the 1290s before selling off into the weekend.

2)  Stand aside Crude until after the report.  If we get a friendly reaction, we will want to sell into it, but difficult to determine whether $100 will be cracked, and if so by how much.

3)  Stand aside Euro. No proper risk/reward at this level.

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.

Futures Trading Recommendations for Tues. June 14th

Hello All,

1)  Sell Sept. Emini S&P at 1279, with a 1289 stop.  Exit 1253.  Equities ended fairly flat for the day, but the fears of another economic downturn are looming until we get a better understanding around our employment figures, and debt re-structuring around the globe.

2)  Sell Sept. Euro at 1.4470, with a 1.4525 stop.  Exit 1.4205.  Willing to sell the upper resistance band as concerns over Greece will gradually be detrimental for the currency.

3)  Stand aside Crude.  She is rangebound and on the verge of breaking out.  Brent/WTI spread has increased to $21+.  Will have to play this one by ear as I project the lower 90's, but do not want to get caught in whipsaw activity 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.

 

Trade Recommendations for Fri. June 10th

Hello All,

There wasn't much variance with respect to unemployment claims, and Trichet's comments about being 'strongly vigilent' with respect to inflation probably means we'll see a rate hike in July.  The narrowing trade deficit provided the bounce we expected in the S&P, although she was knocked back down into the close we still anticipate higher numbers to try and snap this 6 week decline, as we just snapped a 6 day decline.  The weakness in the Euro should continue into Friday, which will inversely support the dollar and pressure commodity prices.  Controlling inflation is key to a global recovery, and seeing prices come off will support the S&P tomorrow.  With respect to Crude oil, the market did not accelerate past resistance after the surprise decision from OPEC, so I am actually ready to sell a day early as I do not want to miss this pullback.  We await trade data from China, which may signal additional cooling globally and pressure commodity prices.

1)  Hold June Emini S&P longs, with a 1273 stop.  Exit 1303.

2)  Sell July Crude Oil at 102.20, with a 102.90 stop.  Exit 100.35.

3)  Sell June Euro at 1.4545, with a 1.4590 stop.  Exit 1.4390.

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 Thurs. June 9th

Hello All,

Stocks broke down a little further today, and given the slowing of its decent we should be poised for a bounce into Friday.  We had energy inventory data released today which was fairly bullish, but the main factor for the bounce was OPEC's decision to not increase output.  Crude should bounce along with stocks into Friday, but we will be ready to resell come Sunday.  The ECB has their interest rate decision out in the morning, and even though we anticipated todays sell-off, it was deeper than expected.  This naturally leads me to agree with many analysts that Trichet will most likely not hint towards any increase in rates.  Time will tell.  We have unemployment claims, trade balance, and wholesale inventories to be reported tomorrow.

1)  Buy June Emini S&P at the open tomorrow morning, with a 10 pt stop.  Exit on Friday.

2)  Stand aside Euro until after the rate decision.

3)  Buy July Crude oil at 100.47, with a 99.50 stop.  Exit 103.25 into Friday.

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 Rec's for Wed. June 8th

Hello All,

1)  Hold June Emini S&P shorts, with a 1303 stop.  Exit at the close on Wednesday.  It was a fairly dismal day as investors kept a lid on prices awaiting Bernanke later in the day.  Given the weak reaction into the close, we will hold.  QE3 seems to be off the table as we wait and observe the effects once the program ends at the end of the month.

2)  Sell June Euro at 1.4722, with a 1.4760 stop.  Exit 1.4630.  The ECB has its next policy meeting on Thursday, and although they may hint at another rate hike, I would expect some selling pressure ahead.

3)  Hold July Crude oil shorts, raise the stop to 100.20.  Exit at the close on Wednesday. Our stop survived by a tick, as API reported a decline of 5.5 million barrels, when analysts are expecting a draw of 1.5million barrels tomorrow.  Given the large variance, I would assume that if we come in well below the 5.5mm, it will be a sell the fact situation.

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 Tues. June 7th

Hello All,

The signs of an economic slowdown became more evident today with another decline in stocks.  Outside markets had inside ranges for the most part as we lack any real economic data until Wednesdays energy inventory report.  OPEC is also set to meet on Wednesday, and their is a proposal for the Saudi's to increase output to meet demand and combat rising prices.  Fuel costs could very well be the tipping factor towards our global recovery, thus holding OPEC responsible for contributing to the current soft patch in our economy.  The recent swing in natural gas prices contradicts supply and demand pressures, and today's headline noting that global demand will increase by 50% in 2035 comes at the perfect time to draw in the average investor near the highs.  If oil prices, and gas prices are heading lower due to a slowing economy, then it is only a matter of time natural gas will follow as we do not export the product, hence global demand will not effect our abundant supply.  On the European front, Portugal's center-right party defeated the current governing socialist part on Sunday, which opens the door towards proper austerity measures and optimism towards a brighter future in light of problems in Greece.  The Greek's should learn from their neighbors and quit rioting when budget cuts are announced, and accept the road to recovery will be a difficult one while they move right with conservative leaders.  There is no alternative other than another bailout for Greece, as the real uncertainty lies in implementing the proper measures for a balanced economy and possibly requiring strict conditions tied to the aid package to get it approved.

1)  Sell June Emini S&P at 1292.75, with a 1306 stop.  Hold into Wednesday.

2)  Stand aside Euro.  RBA rate decision out shortly.

3)  Sell July Crude oil at 99.20, with a 99.80 stop.  Exit Wednesday.

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.