Coming Week’s Trade Expected To Reach Volatility Peak

Written by Al Martin Monday, 27 February 2012 01:46

(2-26-12) Despite the S&P 500 VIX Index now hitting solidly under 20, we would expect heavy news flows this week on all global calendars, so that volatility will reach a peak for the month of February with expected ranges of up to 30 handles in the SPH contract and a likely 200 bps move in the Euros on the horizon. We exited Friday’s trade still being short the EUHs at 134.50. Look for negative reaction to G-20 failures over the weekend. We would expect the Euros and the Spoos to move lower in Sunday night’s session. Key news flow of the week will be the ECB LTRO second tranche auction. Will it be above or below 500 Billion Euros? A number above 500 Billion will elicit rallies. A number less than 500 Billion – a sell-off. But those will be only initial reactions. Look for quick counter-reaction off the moves.

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Continuing Euro Uncertainty Heightens Market Volatility

Written by Al Martin Sunday, 19 February 2012 23:43

(2-19-12)  While an ongoing string of better-than-expected US economic calendar releases continue to support our markets, European and Asian markets continue to lag, as stronger Friday data caused a back-off in the March US Treasury Bond contract. We had sold the contract, as it came back under par 143.00 in early Friday morning trade, covering on our standing order of 142.08. We like buying the Bonds again at the 142.02 level, looking for a half a point bounce.

The March Dollar index continues to lift off of recent lows at 78.65. We like the contract and we still believe the contract is good up to 80.00.

The Spoos – we were sellers once again in Thursday’s trade. We continue to look at the 1357-60 area as shorting opportunities, covering on 10 point pullbacks.

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Late Week Correction Presents Fresh Trading Opportunities

Written by Al Martin Monday, 13 February 2012 01:48

(2-12-12) We were able to get filled on our standing 1350 sell order in the SPHs midweek. We covered on our standing cover order of 1335 in Friday’s session, 1335 now being an important support level if that continues to hold through next week’s heavy calendar. Then we would continue to trade the SPHs on the long side. If not, we would expect a further back-off to 1320. Watch for the Greek parliamentary vote on Sunday to start off the week’s news flows.

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Beware of False Rallies

Written by Al Martin Sunday, 05 February 2012 22:28

alt (2-5-12)  We saw the March Long Bond drop precipitously in Friday’s trade. We were buyers of the Bonds on our standing order of 142.08, which we sold on the close at 142.28. We are still looking to trade Bonds on dips on the long side, as we have been doing consistently all year. We think that the Bonds now are cheap and would look to buy them again on any retest of the 142.08 area.

 The March Dollar contract -- also getting back down in the buying zone. We are looking to trade the contract from the long side on any dips back to 78.80.

The March Crude Oil contract acted sloppy all week with good action under the $97 support area. We think that Friday’s rally back to 97.83 represents a fresh shorting opportunity in the contract.


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Gold Benefits from the 'Return to Risk Trade'

Written by Al Martin Monday, 30 January 2012 01:09

alt(1-29-12) Pursuant to our predictions in our previous week’s summary, the SPHs were turned back at the 1330 level due to the substantial amount of standing sell orders at 1330. We were short sellers earlier in the week at the 1328 and 29 levels in Fridays’ session. The rally attempt failed. Nonetheless mutual funds got the kind of closes they wanted in the S&Ps. We suspect that the S&Ps can work lower in the month of February. We would expect 1290 to be the next downside target.

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