No vote tonight. It's up to the democrats, if not Obama

Hello All,

The republicans cannot agree amongst themselves, and as we've kicked the can down the road, so do we for Boehner's vote.  Ultimately, I'm glad to see politics beginning to be put aside and governing to be the main duty, but we're a little too close to the wire.  It doesn't seem as though we'll make any progress before we close out the week tomorrow, which will leave a big decision on Obama's lap.  Will Obama exercise the 14th amendment and raise the debt ceiling over the weekend to prevent panic on the 1st?  Anything can happen over the next few days, but I would assume stocks and commodities to be lower, and treasuries and metals to be higher.  Even if we're on the path to having our credit rating downgraded to AA, it's still only one notch below perfect.  Stay tuned folks....it's history in the making....with huge gap down potential come Sunday.

1)  Hold Sept Emini S&P shorts from 1306, lower the stop to 1303. Let it ride to 1225.  With no additional news overnight, I would expect Asia and Europe to close weak.

2)  Sell Sept Crude at the market (97.30), with a 98.60 stop.  Exit next week around 94.50.

3)  Continue to stand aside Euro until we're under 1.41.

 

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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.

And the beat goes on.... investors continue to pull out

Hello All,

The saying goes, when in doubt - stay out.  The red flag has officially been raised now that we've dropped back below the 1300 marker on the S&P.  Without any progress on our debt ceiling, investors took money off the table ahead of tomorrows unemployment claims and pending home sales data.  The US dollar bounced off the May low as investors booked profits on bets against the greenback.  Even though circumstances may not call for the money supply to tighten with higher interest rates, it seems inevitable at this juncture.  Nothing over the past year has been 'normal' and this radical shift may temporarily put a halt in the global recovery, but will put us on a different track towards solvency in the long run.  The Euro gave back yesterdays gains and echoes the issues we still have across the Atlantic.  With a possible credit rating downgrade here in the states, I will continue to take the contrarian stand and buy dollars as the Greece bailout issues resurface.  Crude inventories showed a build of 2.3 million barrels today which hinted at less demand near $100. 

1)  Sell Sept Emini S&P at 1306, with a 1322 stop.  Exit 1225.  If the bulls don't step in before the weekend, I would assume the previous top from April 2010 would be a place to ultimately test support.

2)  Crude Oil - not sure what type of bounce we'll get, if any. But will probably look to get short again tomorrow.

3)  Stand aside Euro.  Waiting for 1.41 to break before pressing shorts.

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.

Debt gridlock pressures stocks

Hello All,

We're one week away from the deadline and there are three possible outcomes: 1) We raise the debt limit and agree to budget cuts 2) We raise the debt limit and postpone finalizing budget cuts 3) We are unable to raise the budget or finalize budget cuts.  The most likely scenario in my mind is #2, where we will not default, but retain the possibility of losing our AAA credit rating.  Ultimately, consumer confidence will be shaken and the economy will see a second round of slowing as the money supply will tighten with rising interest rates.  Although corporate earnings are keeping stock valuations propped up, I believe that we are overvalued given geopolitical circumstances, as we can only kick the can down the road so many times.  The US dollar is currently testing the May low and if a 'default' were already being priced in, we would probably be dramatically lower, so that is most likely not the case.  Inversely, foreign currencies and safe-haven contracts were well bid for the day.  Crude oil continues to have trouble breaking above $100, and API data this afternoon showed a large build of 3.96 million barrels.

1)  Sell Sept. Emini S&P at 1329, with a 1338 stop.  Exit 1312.

2)  Sell Sept. Crude Oil at 99.47, with a 100.25 stop.  Exit 97.10.

3)  Stand aside Euro.

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.

Euro zone and U.S. debt - what's there to celebrate?

Hello All,

Both sides of the Atlantic are making headway on their debt issues, and today's rally puts us up near statistical resistance on stocks.  A head and shoulders pattern can still be played out on stocks from this point, and it will be interesting to see how many investors will actually hold through the weekend.  EU leaders agreed the private sector would provide 37 billion euros to a second bailout package for Greece, with a grand total of about 109 billion Euros.  A big waste of ammo if you tell me, who's to know what will come of Spain, Portugal, or Italy; if anything, it will be catastrophic.  On the home-front, an increased credit line is what America is all about, and we can smell it right around the corner.  Whether that is reason to celebrate is another debate on its own.  Crude oil rallied along for the ride but met resistance at the psychological $100 barrier, and the fact that jobless claims are still on the rise and we had weaker factory data from China.

We'll continue to sit on the sidelines until we see something enticing.  The possibility of a big downside reversal is there tomorrow, and we will add incrementally if that is the case to make the most of it.

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 Thurs. July 21st

Hello All,

Debt woes outweigh earnings as we are unable to sustain a plausible advance after yesterdays rally.  The proposed deal to raise our debt ceiling by the 'gang of six' will be difficult to pass through the House as Republicans will not sign off on anything that would raise taxes (ie obsolve tax breaks).  With the clock ticking, in all likeliness we will come down to the wire with this one.  In the meantime, we turn to the European summit overnight to see if EU leaders can come to a consensus on how to approach Greece's debt.  While an agreement on how to proceed would be welcomed, we remain skeptical and will watch the performance of Italian and Spanish bonds ahead of the meeting.  At this juncture, I am a perma-bear with the Euro, which will inversely prevent the US from continuing to bash our own dollar.  On the energy front, Crude inventories dropped 3.7 million barrels, which were shy of yesterdays API estimates.  Nonetheless, the market remains propped up and we missed our scalp buy by a quarter.

No trades overnight until we get through our unemployment claims and Philly Fed.  Not to mention anything can be reported from the EU summit in Brussels.

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. July 20th

Hello All,

Goldman Sachs and BofA hit 52 week lows after their earnings hit the tape, but IBM and Apple take the cake.  The current earnings season is a distraction from the bigger picture encompassing global debt, but Obama addressed a proposal to cut the nations debt by $3.7 trillion over the next decade and to raise the countries debt ceiling from $14.3 trillion.  It's no question that the ceiling will be raised, but show me one financial institution that will increase your credit limit with a maxed out credit card.  It is inevitable for the US' credit rating to be cut from AAA, but in no way does this attribute to the possibility for default.  Debt payments will continue to be made in a timely manner regardless of whether we meet the Aug 2nd deadline or not.  We may continue to get support temporarily, but ultimately we are still heading in the 'wrong' direction, all we're doing is raising our 'stop' order, which all of us traders know rarely works in your favor.  On the European front however, plans for restructuring another bailout package for Greece don't look as bright.  ECB leaders are set to meet in Brussels on Thursday which may prove to be a final attempt at patching things up before we unravel at the seams.  Stronger nations will want to leave the currency to prevent further aid bailouts, and the weaker nations will want to leave to regain control over their own fiscal policy.  The clock is ticking, and we can be sure that any 'outcome' will be broadcast over the weekend.  On the energy front, Crude Oil rose on the heels of positive housing data, and API data showed a draw of 5.2 million barrels this afternoon.  If tomorrows DOE data coincides with todays report, we would have to expect a run above $100 basis Sept., which should be helped by Aug. expiry tomorrow.

1)  Sell Sept Emini S&P near 1330 at the open tomorrow.  Use a 10 pt stop. Exit 1316.

2)  Sell Sept. Euro at the market 1.4113, with a 1.4185 stop.  Exit 1.3970.

3)  Buy Sept. Crude at 96.70, with a 95.20 stop. Exit near $100.

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 Thurs. July 14th

Hello All,

Strong GDP data from China and comments from Bernanke set the markets on fire today.  Similar to yesterdays advance, we were confronted with a late day sell-off after the news had digested.  While the FED remains prepared to provide additional monetary easing should the economic environment warrant, this shouldn't come as surprising news.  The US dollar was slammed as a consequence and Gold surged to a new high amidst all the uncertainty.  Moody's and S&P both threaten to downgrade US debt which contributed to the late day sell-off in stocks.  We have earnings from JPMorgan and Google tomorrow, along with weekly jobless claims data.  Bernanke might have played his cards too soon as part of the plunge protection team, which has fared well for the Euro during its crisis.  Euro bank stress test results on 91 banks are due on Friday, which will be a key test of credibility.  If we do not get any positive news out of Europe by the weekend, I suspect selling will resume next Monday at the latest.  On the energy front, crude supplies dropped 3.12 million barrels which fueled the rally towards resistance above $99 on the heels of China's GDP data, yet investors may be weary of breaching the $100 marker on inflationary concerns.  Ultimately, market correlations will one day have to go back to 'normal.'  i.e. Crude up, stocks down, and the past year has been nothing but orderly.

No trades overnight, but my bias is to sell into all these rallies by morning.

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. July 13th

Hello All,

Stocks and the Euro continued to slip for the day, aside from a short lived rally after the FOMC minutes were released on the premise that some members were in favor of additional monetary easing.  But with Ireland's credit rating being cut, the prospect of additional liquidity wasn't able to turn the tide.  Gold continued higher along with bonds, and the USDA crop report lifted grains.  With respect to crude oil, there was no particular reason for the rise in prices today, but API reported a build of 2.3 million barrels and we await tomorrows DOE data to confirm.  With the Euro debt crisis in the forefront, we would have to imagine all signals would be against inflation as we favor a stronger US dollar.

1)  Hold Sept. Emini S&P shorts, with a 1320.25 stop.  Exit below 1300. 

2)  Sell Sept. Euro at the market (1.3960), with a 1.4054 stop.  Exit to be determined. 

3)  Sell Aug Crude 15 minutes after the DOE report.  There should be $3-$4 underneath current levels, but we do not like playing the report and will remain disciplined and enter the market afterwards.

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.

Euro-zone debt concerns ahead of the US budget deadline.

Hello All,

Stocks took a nice beating today as the fear of contagion across EU member nations is spreading.  In my opinion it is only a matter of time before Greece defaults, and the new debt restructuring process should account for the possibility and its ramifications.  But on the macro side of things, we turn to Spain, Portugal, and Italy as greater symptoms of an unhealthy financial system are becoming more evident.  Italy has the second largest per capita debt after Greece, and has thus far escaped its fate of having to seek assistance from the IMF as it has a fairly liquid domestic bond market.  Ultimately, the million dollar question pertains to the fate of the Euro.  Either way, we can be certain that the public will be left holding the bill.  With respect to S&P, the boats-a-rockin' as we sit just below pre-Bear collapse levels.  If Euro headlines intensify, and we breach the 1300 level basis September, then we may finally get a much deeper correction this time around with 1225 as the first target.  We've almost come full circle since the words 'quantative easing' were introduced, and it may be time to unwind all the fluff.  With all the uncertainty around Greece, the evident flight to safety is noted in Gold and Bonds, and the only way out is for the EU to start up its printing press.  The inverse effect on the US dollar has it well bid, and has pressured commodity prices.  Crude oil is about $4 off its highs from Friday as we have weaker demand from China in conjunction with debt issues. 

1)  Sell Sept. Emini S&P at 1313.50, with a 1323.50 stop.  Exit to be determined.

2)  Stand aside Euro. We may have a slight chance of selling back above 1.40 before she unravels.

3)  Sell Aug Crude at 96.10, with a 97.30 stop. Exit Wed. 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.