Hello All,
We had a mixed day leading into Bernanke's speech, and at the end of the day we didn't receive any new data. A third round of stimulus is to be discussed in the upcoming FOMC meeting on the 20-21st, and ultimately it will depend on whether the Euro tanks before then. Trichet's speech early this morning was of caution with respect to the euro zone's economy growing more slowly than had previously been expected, stating that the central bank see's "significant downside risks" in an environment of "particularly high uncertainty." Given the breakdown to my 1.3870 target i mentioned in Tuesdays report, the door is now open to test the 1.35/1.36 region within the next two weeks. Keep in mind that we have currency option ex tomorrow, so we may get a quicker than anticipated slide or we will teeter around 1.40 until next week. On the energy front, Crude is running into major resistance at the $90 level, and if Europe unravels at the seems I still anticipate prices to go back below $80. DOE data reported a draw of 4 million barrels of crude, with gasoline inventories rising 200k barrels. And ending the day with Obama's job proposal worth $450 billion in stimulus we have yet to see how the market will react.
Will wait for further weakness to get short. Most likely won't see an opportunity until Sunday evening.
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.
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