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The Trader Advantage: Global Risk Impacts Usd Ahead Of PPI
Excerpts taken from The Trader Advantage Program
Dollar Index
The Usd is being sold in-line with the move to risk, away from Bonds (read Usd based Treasuries) ahead of the 8.30am ET U.S. PPI read on inflation at the factory gate. Price action around red-flag releases is creating strong volatility. The Fed confirmation of rates on hold for extended periods has impeded long-Usd plays. Momentum is strong. Favor a straddle (Long and Short near term plays).
S&P Futures
Global risk markets are being bought, and stocks are through 2010 highs. Positive news on low interest rates means equities move higher in the near-term, with very little selling now that global expansion is expected through 2011. Market participants are focused on the positives right now, with nothing able to block the upwards view. Equity index numbers are holding at their highest valuations since Sept 08. Momentum is building. 12-month 96% correlation to Aud and Cad moves. Favor a pull-back to support.
Crude Oil
The energy and the entire commodity market saw strong upside action over the last two days of trading. This comes as the Fed continues to maintain its pledge for low interest rates, which reduces the value of the U.S. dollar, but also provides an important prop to the demand side of the economy. Favor a pull-back to support.
Gold Bullion
The gold trading pattern is hard to characterize, as most of the time the precious metal seems to be driven by the market’s aversion to risk. Some view gold as the only asset that is actually worth holding, while other say that gold has no real value in the fiat currency world. Intra-day traders should seal themselves from both camps, and focus on its price action.
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