Read full article here...
General Comments
I believe a major stock and commodity collapse is likely within the next 10 trading days. Take advantage of the early in the week commodity rally to develop short positions. The momentum escalation in many commodity markets sets up a spike high top and strong price correction. This anticipated volatility to the downside offers numerous opportunities to play put premium spikes in key markets like gold, silver, sugar, cotton, corn, soybeans, cattle and others.
Energies
Crude oil’s recent choppiness goes contrary to recent gains in commodities as well as the stock market. In particular there is a clear divergence between copper and oil prices, which offers a glimpse into the China component. This suggests that some premium is being taken out of the market from a lack of Gulf hurricanes and overall stable inventory levels. A strong punch in the gut to commodity prices will likely be all she wrote for the big 3 in the energy sector and a move to the low $60 range in crude oil is expected. Natural gas remains divergent and the recent bump off channel support on the Oct. contract may be the beginning of a bull run.
Financials
Stocks are up against critical resistance and I suspect an impressive price plunge in the stock market is coming within the next two weeks. Bonds have supported on a trend line and are avoidable as the impending bear move in the stock market offers more opportunity than playing upside in bond prices. In fact I would be inclined to spread short the mini S&P500 against a short 30 year T-bond. The dollar is a strong buy as it approaches recent support. The euro and pound are sells, along with the Aussie and Canadian dollar. Last week the Japanese government intervened on the yen, hitting the market with about a 400 point plunge. This is when a bull run in the yen can truly get underway. It can often take an intervention to truly release a market. When the intervention came last week analysts and traders did the “I knew that was going to happen” bit, and that shows that the market had certain participants or non-participants that avoided full bull plays as they feared this action by Japan. Therefore it is only after such an intervention that those shorts have no more reason to be bearish the market, and the bulls have little more to fear. However, if the government can show the fortitude to continue to defend 121 on the yen then it could get interesting. Given the momentum in the yen, the history behind Japan’s interventions and the tendency for the yen to be a beneficiary when the U.S. stock market declines, it is likely that the yen will run thru 121 and then really get moving.
Read more about commodity trading training on www.forex-tradingtraining.com
No comments:
Post a Comment