Well, The Euro has stabilized above 125, it appears that it is being defended there, and at 1:00 central time the Euro has been bought up so shorts are on notice, we had two such "odd moves" in the Euro so shorts are not going to get too bold next couple of weaks, I think Euro hits 128 next week for sure. I think Monday will be Mutual Fund Monday as well, where they come in and buy the stuff they have been chasing for awhile at a discount, especially since it appears that stocks tested the flash bottom lows, and held, it was a friday so mutual funds don`t really get too involved, expect Monday to be a 200 point up day, s&p probably trades bavk above 1100 pretty quick next week. Oil will retrace next week, their will be demand for the products as well, first big day for the new contract on monday where people will initiate new positions, expect crude to open higher on sunday night, and have a $2.50 plus day on Monday, probably hit at least 74.70 next week on a rebound, and if there are as many shorts as I think who are poorly expecting crude to move to the low 60`s in the middle of the summer driving season, we could expload as high as 76 on a short covering rally. We may trade in the low 60`s sometime, but it isn`t coming now unless markets totally freeze up, I think bears are expecting this scenario. With Guitner visiting Europe, I think next week cooler heads prevail, and buyers start buying european assets once again next week, which will help market confidence in all markets. Copper appears to have bottomed this past week, so I expect all commodities to have retracement bounces next week. All in all money should come out of treasuries and back into riskier assets next week as bargain hunting takes hold, remember the fed is still at zero percent interest rates, until they raise, all risk assets are cheap as hell right now, especially after the over-hyped eurpean end of the world collapse. The shorts made some money, but as you saw futures were down big, and i know it was options friday, but buyers came in so quickly at the open, they were salivating at those prices, on a friday....we had our near-term test, next week will be a nice bounce from oversold conditions.
Ok but what are your trade setups for the above commentary? Do you have any entry points along with stop losses and profit targets? Analysis only matters if your willing to put your money where your mouth is. furthermore, the bullish engulfing candle as seen in the QQQQ, MOO and OIH only speaks to fact that the DIA and SPY etc are in a bearish retracement phase per fridays rally. it does not speak to the fact that the rally will be sustained.
It's a bit surreal to be talking about bargain hunting, "cheap" assets, and oversold conditions when the market in general is substantially overvalued, even given current business fundamentals. And then, I happen to believe we're in a secular bear market that has years left to run - something which the public has yet to accept. We came close in 2008-09 but the government stimulus, ZIRP etc. has kept the party going for a bit longer. This is a consequence of dire structural problems in the global economy. So we may well have a short squeeze, technical bounce etc. etc. - but S&P 1300? I'm not betting on it. Certainly the recent price action is a whole different animal than the previous insta-declines, and suggests that things are rolling over.
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my (opinion) next week you see a run up in all equities. these things have been beaten down and reached the -10% mark and pretty much held there which was also by coincidence the flash crash of 05/06 lows. for 3 days of past week market opened decidedly lower on news only to stage a rally late into the trading day. very indicative of institutional buying. this indicated to me that even though the vix is still above 40 that money managers are starting to get back into market. god forbid they miss the next move to 13k .. that's right 13k... for the most part these guys all missed the last 18 mts and had their clients sitting on the sidelines on a mountain of cash... = (not good profits) so now you have a boat load of fund managers sitting on the side with a perfect opportunity to buy equities on sale and a general opinion that the euro/ EU wont collapse. At no time was the American economy damaged by this crisis in Europe... we are still seeing our fundamentals improve and i would say that this new reg reform bill will be much less of a hindrance to these financials than previously predicted. You have to remember that financials such as GS JPM MS BAC etc.... can buy the best lawyers in the country so i would also start going long in some of these names such as GS. they will obviously make money trading the volatility in Europe. Volatility = traders make money. GS + most other financials are all built on making money through trading. ===== make money people and happy trading ...(as long as you make money of course)
I'm not sure why you would relate higher oil with a bullish market. Higher oil hurts nearly every single company on Earth. Nearly everything you can touch is made is one way or another with oil. Raising the material cost on nearly every product is not going to help bottom lines. The only true action that will affect whether markets go up or down, is whether full year 2011 earnings estimates are raised or lowered. Higher oil will not help to raise those estimates.
We tested the flash bottom, we didn't break through. We are way oversold. That flash crash really messed things up, now that the technicals are back on the bull's side, it's game time. Welcome to the next bull market! The correction is over