The worst month in over a year ends with 4 days of gains.

Hello All,

ADP employment data this morning showed signs of weakening growth, but across the Atlantic it seems as though Germany is making headway on the debt crisis.  The low volume in recent days has allowed moves to be exaggerated with no real conviction, and in some sense it's a repeat of last year where QE2 was announced, compared to QE3 being rumored.  Historically, September and October typically tend to be the weakest months of the year; the million dollar question is what catalyst will spur another hefty round of selling.  If it weren't for the part of government intervention, I think we would all have to agree that stocks are overvalued, and that is what makes trading difficult nowadays.  The day to day action is news driven, which for the most part trumps intraday support/resistance levels.  The good news is that we should be close to an end with government intervention as the Fed has practically run out of tools to continue diverting the market from collapsing.  On the other hand, it seems as though the ECB may just be starting its hand at intervention as today's report showed annual inflation was unchanged in August and the number of individuals unemployed grew.  The ECB is on course to possibly cut rates to help loosen money flow if data continues to be dismal, and will most likely 'print' their way out of trouble.  With respect to energies, DOE confirmed the build of 5 million barrels in crude, but with a tropical storm brewing in the Caribbean there aren't many sellers at the moment.

1)  Exit Oct Crude shorts at 88.50 for a small gain, use a 89.75 stop.

Stand aside all other markets until next week.  Fund money usually comes in the 1st of the month, but not sure what to expect ahead of Friday's data.  

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. Aug. 31st

Hello All,

Consumer confidence hits a two year low, and stocks lean on the Fed minutes as expectations for additional stimulus from the central bank increases.  Gold rallies $50 on the day based on loose monetary policy, and with this kind of momentum we may be back above $1900 in no time.  The S&P was hammered at the close, which may be a light indication that this corrective pattern may be close to completion.  Another scenario would allow for the S&P to try and test the neckline around 1260, which coincides roughly with the moving average; but given the hefty selling at the close we may end the month with a volatile day lower.  On the currency front, Italian bond auctions didn't fare well, and the Euro paid the price while speculation for rate increases over the next 6-9 months have diminished drastically.  We have eurozone inflation and unemployment data due for Aug. being released overnight, so it should be a bumpy ride lower to close out the month.  As for energies, API data just released showed a whopping build of 5.1 million barrels of crude oil for the week, and if DOE is anywhere near it we would expect a big drop tomorrow.  Technical patterns are still in-tact as we kissed the previous high today and this could be part of a congestive wedge that would require a sell-off then one more attempt at the $89 level before an ultimate break lower.  Investors may situate themselves on the sidelines early this week ahead of unemployment data on Friday, and after the few weeks we've had I'm sure everyone is ready to enjoy the 3 day weekend.  

1)  Sell Sept. Emini S&P at the market (1206.25), with a 1218 stop.  Exit 1188.50.

2)  Sell Oct. Crude at 88.75, with a 90.20 stop.  Exit 86.45.

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.

Is it time to fade the rally?

Hello All,

Hurricane Irene wasn't as bad as expected, but its effect on the NY area commute was evident with lighter than usual volume at the exchanges.  We had news over the weekend of two Greek banks merging, which is a sign that something is actually being done to help alleviate European debt concerns.  However, Trichet has acknowledged that growth could be weaker than expected across the euro zone, which would make the central bank more reluctant to raise interest rates.  Fundamentals aside, relying on the charts the bears would need to step in immediately to keep any hope of a new low alive.  The ES has technically completed an ABC correction, but the third leg could potentially extend to the 1240-1260 level and still keep the downtrend intact.  Crude oil seems to be doing a triangle pattern that would suggest another higher low, and another lower high before she makes another break for $77.  And it's anyone's guess what the Euro is up to as we will not attempt to get back in unless we're below 1.43.  We have Case Schiller, Consumer Confidence, and FOMC minutes being released tomorrow.  Ahead of Labor Day weekend and our unemployment data on Friday, we may just chop our way to Obama's speech next week.

I'm still in the bear camp, but I'm close to switching sides...lets see if the next few days cause major damage to the charts or confirm the aforementioned corrective patterns.  We'll keep an eye on the yellow metal to see if the gold bugs can re-inflate fear in the markets.

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 close to default? Buffett beefs up BAC. Bernanke has the final say..

Hello All,

A jittery day ahead of what will most likely be a very volatile Friday.  To start off - Greece's central bank activated the Emergency Liquidity Assistance program to help its struggling banks stay afloat as their 2 year note is yielding close to 50% with no bid.  A default seems inevitable as we await for the next shoe to drop.  With the short sale ban across most of Europe, investors flocked into the German DAX which experienced it's own flash crash as prices fell about 5% in 30 minutes.  Needless to say France, Italy, and Spain extended their short selling ban (Spain and Italy though Sept. 30th, with France through Nov. 11th).  The Bank of England extended its swap line to the ECB with liquidity the major issue during a credit crisis.  Something definitely stinks, and the longer it isn't addressed, the worse it will rot.  The only news that kept US equities somewhat afloat was Warren Buffett's stake of $5 billion towards Bank of America.  A vote of confidence from one of the world's wealthiest is only a band-aid in what potentially can become a blood bath as the news related rally was short lived.  Jobless claims rose on the week, and the previous weeks was also revised higher.  Bernanke better have a deck of Ace's up his sleeve to fight the onslaught of bad news.  We have GDP data at 5:30am and I doubt Helicopter Ben will sleep a wink ahead of his 7am PST address.

 

No reason to be a hero and attempt to trade futures tomorrow folks. 

 

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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 the S&P, Euro, and Crude Oil..

Hello All,

Gold continued to get hammered today, down $100, ahead of tomorrows option ex, and margin requirements have been increased due to volatility.  Wall Street continued it's rally as investors chase the dream with the QE3 carrot being dangled in front of them, but ultimately Friday will be judgement day with hedge funds having accumulated the largest short position since 2008.  Still no news out of Europe, so maybe we can just ignore our problems and hope they go away.  Moody's cut Japan's credit rating overnight, but that didn't seem to startle investors since S&P and Fitch cut Japan's rating long ago.  Either way, there are continued inclinations that deemed the action necessary and it's just another reminder.  On the energy front, Crude stockpiles fell 2.2 million barrels, as gasoline stocks rose 1.4 million barrels.  Not much to note fundamentally, but technically the rally looks to be running out steam on Crude.  We continue to keep an eye on the US dollar, as it advanced slightly against its currency pairs on speculation that Bernanke probably won't add stimulus.  We have unemployment claims due out tomorrow, and it may be a quiet day ahead of Bernanke on Friday.  Breaking news afterhours: Steve Jobs resigns, and the stock is down $20. 

No exact predictions overnight, but I'm still in the bear camp.  I would imagine prices closer to 1150 on the S&P and $84 for Crude going into Jackson Hole.  The Euro has plenty of room to fall, but can continue to hang up at current levels for now.

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.

 

Making sense of the day, but what to expect next...

Hello All,

A day of asset shifting as gold had a $90 range and ended well on the lows ahead of option expiration on Thursday.  The S&P and Crude have retraced 50% of their drop from late last week in anticipation that Bernanke will hint towards additional easing.  But my thesis remains the same with respect to Bernanke not making any new proposals, especially ahead of Obama's address after Labor Day.  As long as Bank of America continues to head lower, I do not see any reason to proactively be purchasing stocks.  Europe holds the keys to our financial solvency in the short term, and its been a few days since they've hit the headlines with respect to the debt crisis.  Factory output in the central Atlantic region contracted again in August and new home sales fell to a five month low in July.  The fundamental data isn't there to support a rally, but we don't necessarily need to make sense of choppy trading activity amidst current economic conditions.  API data this afternoon showed a draw of 3.3 million barrels of crude, but offsetting that there was a large build of 6.3 million barrels of gasoline.  We'll see how much of a variance we'll get with tomorrow's DOE data, and look to get short intraday.  The safe play is to choose your side and purchase options into Jackson Hole on Friday, where I expect we'll see a sell the fact reaction.  Next week's activity will most likely be heavy on Monday/Tuesday and then die out going into Labor day weekend.  Keep in mind that the short sale ban in Europe will be over by the 26th, ready to resume shorts come Sunday.  S&P resistance is at 1170 where the downtrending channel kicks in; Crude oil is currently up against its resistance channel at $86.  With respect to the Euro, it has rallied on dollar weakness based on Chinese and German manufacturing data released overnight (the data was bad but it wasn't as bad as expected).  The lows will be revisited folks, its all noise in the meantime.

1)  Hold Sept. Euro shorts, with a 1.4450 stop.  Exit below 1.43.

 

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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 Rec's for Tues. Aug. 23rd

Hello All,

A volatile day that ended with the indexes finishing well off their highs.  Financials continue to weigh on the markets, and with the afterhours report that Goldman's CEO has hired a attorney only brings into question what headline will follow.  Investors still look towards what Bernanke may say at Jackson Hole on Friday, and as accommodative the Fed may want to be, there are only so many tricks you can pull out your sleeve.  The only indicator we need to be focusing on is the price of Gold which has topped $1900, which is pricing in a disaster from Europe, and we may very well be at $2000 by weeks end at this rate.  This may have also been fueled by the reports out of Libya where Ghaddafi's reign may soon be over.  Mid-East tensions may have contributed to the $2 gain in oil, but Brent actually fell and narrowed the spread.  The rally in WTI shouldn't be given much merit since today was the Sept contracts expiration and Libyan oil output is already scratched.  There isn't any important economic data to be released this week, so without any positive news I feel these markets will continue to search for a bottom.  Consider all rallies as gifts to be sold into.

1)  Hold Sept. Emini S&P shorts, use an 1150 stop.  Exit 1082.  I'd be amazed if we do not break below 1100 tomorrow given what's going on with gold.

2)  Hold Oct Crude oil shorts, with a 85.50 stop.  Exit near 78.  Rollover got the best of shorts today, and with the suspected break of 1100 on the ES tomorrow, crude should follow.  The important thing to keep an eye is how Brent breaks below $100.

3)  Hold Sept. Euro shorts, with a 1.4510 stop. Exit 1.4219.  I still believe this market will inevitably break 1.40, but we'll just maintain put positions rather than hold futures into Jackson Hole.

 

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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.

 

S&P Option ex, Crude Rollover, and European woes..

Hello All,

I hate to say I told ya so, but the bears are back in control.  We have begun our 5th leg lower on many markets, and one would expect at minimum to retest our lows from last week.  Europe led the way lower with bank shares tumbling as investors finally came to their senses regarding the health of the banking sector and the ability for problems to spread globally.  So much for the short selling ban, right?  It gave just enough time for the avid investor to still get in at a good price.  In the US, early morning news showed factory orders at the lowest level since Aug. 2009, and unemployment claims were up to 408k.  We've reached stagnation, and I will re-iterate that bonds and metals will be the only markets to head higher, especially into Jackson Hole.  The big loser of the day was Crude, which had an $8 range from yesterdays high, and we may very well see another $5-6 lower tomorrow.  If we are in a true recession, just take a look at the chart back in '08 where we went from $145 to $30 crude; referencing the previous pullback, $60-$70 crude over the next couple months doesn't seem too irrational.  Also, the Brent/WTI spread has widened even further which poses the risk for additional volatility (further downside).  The wild card for the day would be s&p option ex tomorrow, but I presume they'll make the put sellers pay up and test 1100 at a minimum.  We'll have to count 5 waves lower, leg 1 seems to have completed and we may see a 3 wave rally overnight before another 5 waves lower for the 3rd leg which will probably test the 1077 level, at which point the 4th and 5th wave may hold above last weeks low or send us to the 68% retracement level of 1016.  Keep buying gold folks, we're going to $2000 before December and I have a good feeling that margin calls will help skew the markets tomorrow.

1)  Sell Sept Emini S&P at the market (1138), sell again at 1148 if reached, use a 1174 stop.  Exit below 1100.

2)  Sell Oct Crude at 81.80, sell again at 82.60 if reached, use a 85.10 stop.  Exit near 77.  We are rolling to Oct as Sept contract is expiring on Monday and could in part be contributing to liquidations.

3)  Sell Sept. Euro at the market (1.4295), resell at 1.4380 if reached, use a 1.4525 stop.  Exit 1.38.

 

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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.

Market Analysis for Thurs, Aug. 18th

Hello All,

A fairly dull day on the books as volume was anemic without any tape shaking data.  Investor's are starting to re-evaluate the possibility of QE3 as we get closer to the Jackson Hole meeting where Bernanke gave us the scoop on QE2 last year.  In my opinion Bernanke has already played his card with calling out interest rates to remain low until mid-2013.  With inflation muted for the time being, now is the time to see how well we can stand without stimulus.  With Europe far from a consensus regarding their debt issues, the EU will lead us back into a recession.  Gold and Treasuries are telling the true story as they head higher ahead of S&P option expiration on Friday.  Will we get some whipsaw action to the downside?  On the energy front, the DOE data reported a build of 4.2 million barrels of crude, much greater than API, which brought in a fresh round of sellers from the days high.  Also note that the spread between Brent and WTI is at about $22, near the high, and if it were to contract prices would generally have to head lower.

No trades overnight, but my bias is that the markets trend lower towards last nights targets.

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. Aug. 17th

Hello All,

The 3 day win streak in stocks has ended with bank stocks leading the way lower. The event of the day was the meeting between Sarkozy and Merkel, where not much supportive data was drawn. Trader's were looking for the possibility of a euro-zone bond, which was dismissed, and the proposal for extra euro-zone governance was only re-iterated rather than implemented. European GDP was only up 0.2% which echoes thoughts of a recession which followed 0.8% in the 1st quarter. If anything, out of all the nations one would have expected decent data out of Germany which posted 0.1% in comparison to 1.3% in the 1st quarter. If the German economy is weak, will they still be willing to support neighboring 'bailed-out' nations? On the home front, we had weak July permits and new construction data which is at about half of a healthy economy. All in all, Gold tells the story up $30 on the day, and a breach of $1800 should re-ignite last week's jitters. We do not have much data to look out for tomorrow aside from DOE data, where we just had API post a 1.7 million barrel build in Crude. Fundamentals aside, the rebounds in the S&P and Crude can be viewed as a rising wedge and are beginning to fail under the 50% retracement. With volume diminishing, and prices rising, there is no significant commitment of real buyers and thus I expect a snap lower which should be in the cards over the next 24 hours and be the start of a 5th leg lower. The same continuation pattern is evident in BAC, which leads me back to bank shares leading the way lower. The FDIC has reported that problems banks are at a 20 year high, which negates the possibility for bank regulations to ease up, even though relaxed rules are necessary to give lending a boost. A state of paralysis invokes anything but growth.

1) Sell Sept Emini S&P at the market (1190), with a 1206 stop. Exit 1154.

2) Sell Sept. Crude at the market (87.06), with a 88.50 stop. Exit 81.35.

3) Sell Sept. Euro at the market (1.4394), with a 1.4460 stop. Depending on how severe a push lower can be seen through tomorrow will determine whether we may see 1.40 this time around. Exit to be determined.

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http://www.expofutures.com/futures-trading-research.php

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.