My futures trading blog

[PerErik]

17th of June

Blog can be found here: http://avantagefinancial.blogspot.com/2011/06/trading-recap-for-twitter-trades-friday.html

Friday ended the week and saw the Euro options structure expire as well as more Crude oil and corn trading.
The Euro structure did end up in -350 USD in total over the week. The choppyness ended up costing too much to hedge basically. Crude trading was another major contributor Friday, producing 5 long trades for a total of 462.50 USD on the day.
Did one Corn trade for 162.50 profit.
The strategy next week is look for more buying on dips in Crude, Corn and Soybeans as we are at major support levels, where I look for a short term bounce.
I still have the Crude oil options structure on with 4x short 98.50 Aug calls and long 2x mini futures. Looking to keeping that structure for a bit longer, will probably make adjustments underway, but in general the strategy to sell calls and trade long in the underlying crude looks good for now.

Complete list of trades can be found here:
http://avantagefinancial.ch/images_up/avantagefinancial.ch/tradinglogtwitter.xlsx

 

[PerErik]

Market Report Tuesday 21st of June

http://avantagefinancial.ch/images_up/avantagefinancial.ch/pdfs/daily21jun11.pdf

We have some event risk over the next few sessions with the Greece no confident vote tonight at 23:59 CET and FOMC tomorrow. Overnight volatility in the Euro overnight options reflects this and trading around 18.5% for at the money option. The volatility for the 2 days options, which includes the FOMC is also trading around the same volatility levels for the at the money strikes. Headlines out of Greece continue to dominate the market sentiment and I found this article a bit interesting:
Each Eurozone Household Will Guarantee €1,450 Of Greek Debt By 2014:
http://www.zerohedge.com/article/each-eurozone-household-will-guarantee-€1450-greek-debt-2014

Fitch out saying than any debt exchange or voluntary rollover of the Greek debt would be a default in their eyes. Fitch also said that US would be put on negative watch if US fail to raise the debt ceiling by August 2nd deadline.
Fitch sees risk of Greece, U.S. debt defaults - Reuter -
http://www.reuters.com/article/2011...USTRE75K0AP20110621?feedType=RSS&dlvrit=56943


The S&P 500 futures are trading higher in the pre-market, up 6.75 points at 1280.25, meaning we are above that gap at 1277.50 that I mentioned as my short term upside objective in the report the last few days. I still think the low from Thursday at 1252 should hold near term. We have falling resistance coming in at 1283 and then last week’s high at 1287 as reference points to the upside. To the downside the yesterday’s low at 1261.25 is a level that should not be broken if we are going to see more near term upside.

The Euro managed to break above the 1.4350 resistance level in thin Asia trading as stops were triggered up to 1.4370. I guess this reminds us that the US situation is also pretty horrible and the choppy price action continues. I think there are other more interesting markets to trade at the moment to be honest. We have the minutes out of Bank of England tomorrow at 10:30, which might be good to keep in mind if trading GBP today. Technically the key resistance at 1.6265 is the level on the upside to watch as any break above this level could see short squeeze.

Both Soybeans and Corn found support in the lower end of the trading range yesterday and I fancy a move higher. The market is awaiting the USDA acreage report on 30th of June, which is the most important release this time of the year. I expect to see a rather large move on the release.
Another thing I would like to mention is that Crude is in a seasonal strong month and both OPEC and DOE estimates point to solid demand going forward. So unless the financial markets fall apart over Greece I think we will be back above 100 USD per barrel fairly quickly.

Looking at a few interesting points in the markets trading wise:
- Thursday’s low in the S&P futures at 1252 should hold near term and I look for a move to close the gap at 1277.50. Looks like we will open above this level today. Next key resistance is 1283 followed by 1287(last week’s high).
- Crude is a buy on dips above 91.50 I reckon for a move back towards 95.50
- USDCAD is approaching the upper end of the recent range and looks like a sell towards 0.9850. Looking for a move back below 0.9700.
- Silver trading sideways over the last month, range 32.75 to 38.76.
- Gold is a buy towards 1530 today.
- Corn and Soybeans are at the lower end of the recent range. Looking for a move higher in both markets this week. Corn upside target is 730 and 1360 for Soybeans. Keep in mind that holding corn or soybeans over the USDA acreage report released at 30th of June could be very risky.

Today’s Calendar (CET):
- 14:50 EU Van Rompuy meets EU Juncker in Luxembourg
- 16:00 US Existing Homes Sales
- 19:00 IMF Lipsky speaks in Berlin
- 19:00 SNB Hildebrand speaks in Zurich
- 23:59 Confidence vote in Greece

RBA Weighs European Debt Crisis, Mining-Fueled Inflation in Holding Rates - BBG -
http://www.bloomberg.com/news/2011-...mining-fueled-inflation-in-holding-rates.html

As Politicians Debate, Market Is Calling the Shots on Greece - The WSJ -
http://online.wsj.com/article/SB100...42101344616.html?mod=WSJASIA_newsreel_markets

IMF Not Negotiating New Greek Bailout: Lipsky- Bloomberg -
http://www.bloomberg.com/news/2011-...w-greek-bailout-as-it-weighs-aid-payment.html

Demand for financial services is recovering - The Times - by Anatole Kaletsky
http://www.thetimes.co.uk/tto/business/ceo-summit/article3068415.ece

Europe better have a Plan B to tackle Greek contagion - The Telegraph -
http://www.telegraph.co.uk/finance/...-have-a-Plan-B-to-tackle-Greek-contagion.html

How much could Britain pay to bail-out Greece? - Telegraph -
http://www.telegraph.co.uk/finance/...uch-could-Britain-pay-to-bail-out-Greece.html

Germany provides loan guarantees to prop up Greece - The Telegraph -
http://www.telegraph.co.uk/finance/...ovides-loan-guarantees-to-prop-up-Greece.html

EU Links Greece Aid to Budget Cuts - The WSJ -
http://online.wsj.com/article/SB100...6290148.html?mod=WSJEurope_hpp_LEFTTopStories


Foster's rejects $9.5b bid from SABMiller - The SMH -
http://www.smh.com.au/business/fost...m-sabmiller-20110621-1gcg6.html#ixzz1PrdVMZxB


The IMF Warns Crisis Is Threat to Broad Upturn - The WSJ -
http://online.wsj.com/article/SB100...7710588.html?mod=WSJEurope_hpp_LEFTTopStories

Delaying Tactics No Help in Greek Tragedy - The WSJ -
http://online.wsj.com/article/SB10001424052702303936704576397713297465414.html

How the Greek debt crisis could slam U.S. savers - The WSJ -
http://www.marketwatch.com/story/how-the-greek-debt-crisis-could-slam-us-savers-2011-06-20

Greece Will Default, But Not Yet - The WSJ -
http://blogs.wsj.com/source/2011/06/20/greece-will-default-but-not-yet/?mod=WSJBlog&mod=thesource

Political union cannot fix the euro - The FT -
http://www.ft.com/intl/cms/s/0/7944de54-9b69-11e0-bbc6-00144feabdc0.html#axzz1PliDoQ3j

Savour the sweet scent of Germany’s success - The FT -
http://www.ft.com/intl/cms/s/0/90a78066-9b8b-11e0-98f2-00144feabdc0.html#axzz1PliDoQ3j

Trades reveal China shift from dollar - The FT -
http://www.ft.com/intl/cms/s/0/2285148c-9b6c-11e0-bbc6-00144feabdc0.html#axzz1PliDoQ3j

Cool reception for Greek debt plan - The FT -
http://www.ft.com/intl/cms/s/0/b1ca2b84-9b65-11e0-bbc6-00144feabdc0.html#axzz1PliDoQ3j

Papandreou Faces Confidence Vote That May Decide Greece’s Fate - Bloomberg -
http://www.bloomberg.com/news/2011-...oday-as-world-waits-for-delay-or-default.html

IMF Not Negotiating New Greek Bailout: Lipsky - Bloomberg -
http://www.bloomberg.com/news/2011-...w-greek-bailout-as-it-weighs-aid-payment.html

Cameron to Europe: not one penny more - The Times -
http://www.thetimes.co.uk/tto/business/ceo-summit/article3068867.ece


Technical’s and comments

Euro: The next level of key resistance is 1.4380 to 1.44, with last week’s high of 1.4496 as the big level to the upside for now. To the downside we have 1.4300, followed by 1.4250 and key support at 1.4150. This pair is very choppy and not my favorite market to trade at the moment. If I had to pick direction I would still look to sell rallies.
Cable: Key support at 1.6050 and resistance up at 1.6265. Still looks like a sell on rallies towards 1.6265.
USDJPY: Very tight range over the last sessions. I remain longer term bearish on the JPY as the fundamental factors in Japan looks ugly, with huge public debt and unfavorable demographics going forward. However the risk off over the last days has taken us below 80 again. Not sure if we see any intervention unless the move picks up in speed and magnitude. Buy on dips for the brave.
Swissy: I expect the CHF to underperform Euro as the 1.20 EURCHF looks very rich in CHF terms. So maybe better to play Euro is negative on USD. Swissy is bearish below 0.8500 for now, looking for 0.8300
AUDUSD: RBA signaled that they were in no hurry to raise rates, but still not that much downside action. Buying dips towards 1.0550 looks the most attractive for now.
USDCAD: Still favor selling rallies for a move back below 0.9700. If we break above 0.9900 this view would be wrong I reckon.
S&P Future (ES): Expect the low from Thursday last week at 1252 to hold and a move to close the gap at 1277.50 near term and it looks like we will open above that 1277 level today. Next upside level is then falling resistance at 1283, followed by the key pinot level at 1287 (last week’s high). We have support at 1261.50 (Friday low) that I would not like to see it below, if we are going to rally.
Gold: Next interesting level to re buy is around the 1530 level. So, I am waiting for lower level to get involved.
Crude oil: Buy on dips above 91.50 I reckon for now and looking for a rally towards the resistance at 95.50.
________________________________________
Risk Warning: Any information in this report is based on data considered to be reliable, but no representations or guarantees are made by Avantage Financial GmbH with regard to the accuracy of the data. This information is provided on condition that we accept no responsibility, legal or other for its contents. We, including our directors, officers, employees or publishers, disclaim all liabilities. Any statement constitutes only current opinions, which are subject to change. Neither the information nor any opinion expressed shall be construed to be, or constitute an offer to sell or a solicitation of an offer to buy any investments mentioned herein. Regardless of the account type you choose, there are risks inherent in trading, including the risk of loss greater than the original investment. The opportunity for profit creates a corresponding risk of loss. Anyone wishing to invest in any of the products mentioned should seek their own financial or professional advice. Prices can go down as well as up. Past performance is no guarantee of future results.

 

[PerErik]

Trading recap 21th of Jun

Trading recap for the Twitter trades Tuesday 21st of June
S&P has moved firmly above last week's high at 1287 and testing 1293 this very momenty. There is resistance around the 1293 to 1295 level and I would be surprised if we go higher than this level today, especially given the light volume we are seeing. I figure the larger risk is for a move back lower near term. I have added a put structure to reflect this view selling 1280 put early in the session and will continue to trade short in the futures to hedge delta.
Corn and Soybeans gave up early gains to close in the lower to middle part of the daily ranges. I am still looking to buy Crude on dips, follwing the break above the 2 day high at 94.38 overnight and looking for a move back to 95.50 to 96 over the next few sessions. Although the price action today looks quite heavy and not able to hold above 93.70 on the pullback and diping below 93 earlier. If we close below 93.70 I guess we are looking to go lower tomorrow early on at least.
Added short calls in Aug Crude options at 96 strike, selling 2x contracts for 2 USD. Did some smaller adjustments in the Euro options structure.
We have the Greek no confidence vote tonight and FOMC tomorrow, so there is plenty of unknown event risk.

Click this link to see all updates:
Trading log: http://avantagefinancial.ch/images_up/avantagefinancial.ch/tradinglogtwitter.xlsx

 

[PerErik]

Market Report Wednesday 22nd of June

Running a bit late on the report today, so will keep it short and sweet.
FOMC just held rates unchanged and signaled that rates will remain low for long, QE2 will expire at the end of the month, but they will reinvest the interest received from the holdings. Pretty much as expected and Bernanke will hold the press conference shortly. We have seen very little market reaction so far to the release.
http://www.bloomberg.com/news/2011-...rd-stimulus-after-ending-asset-purchases.html

Bank of England minutes out earlier was pretty dovish and they signaled that they might need to provide more stimuli in form of bond purchases to help the recovery. GBP sold off pretty hard on the release and it now looks like we will test the 1.6050 key support near term.
http://www.bloomberg.com/news/2011-...amid-pressure-for-further-bond-purchases.html

Corn trading limit down at the moment and getting crushed on more fund selling. Soybeans holding up a bit better, but we are now below the key support levels that looked attractive to get long, so be careful. The market is awaiting the USDA acreage report on 30th of June, which is the most important release this time of the year. I expect to see a rather large move on the release.

DOE crude inventories showed smaller than expected stockpiles, which is sending Crude oil futures higher.
We have key resistance at 95.50 that is the key level that we need to see a daily close above to open for move towards 98.50.
http://www.bloomberg.com/news/2011-...rk-before-u-s-supply-report-fomc-meeting.html


Looking at a few interesting points in the markets trading wise:
- Thursday’s low in the S&P futures at 1252 should hold near term and I look for a move to 1293 and possibly 1303. We have already reached 1293, so the next level is 1303 now. I expect to see sellers around 1293, so depends how the price action turns out in the area.
- Crude is a buy on dips above 91.50 I reckon for a move back towards 95.50, I said earlier this week (pretty much spot on)
- USDCAD is approaching the upper end of the recent range and looks like a sell towards 0.9850. Looking for a move back below 0.9700. Getting to a low of 0.9711 today, looking for 0.9650 now.
- Silver trading sideways over the last month, range 32.75 to 38.76.
- Gold is a buy towards 1530 today.




Technical’s and comments

Euro: The next level of key resistance is 1.4380 to 1.44, with last week’s high of 1.4496 as the big level to the upside for now. To the downside we have 1.4300, followed by 1.4250 and key support at 1.4150. This pair is very choppy and not my favorite market to trade at the moment. If I had to pick direction I would still look to sell rallies.
Cable: Key support at 1.6050 and resistance up at 1.6265. Still looks like a sell on rallies towards 1.6265. Selling towards 1.6265 worked out really well, down at 1.6110 now.
USDJPY: Very tight range over the last sessions. I remain longer term bearish on the JPY as the fundamental factors in Japan looks ugly, with huge public debt and unfavorable demographics going forward. However the risk off over the last days has taken us below 80 again. Not sure if we see any intervention unless the move picks up in speed and magnitude. Buy on dips for the brave.
Swissy: I expect the CHF to underperform Euro as the 1.20 EURCHF looks very rich in CHF terms. So maybe better to play Euro is negative on USD. Swissy is bearish below 0.8500 for now, looking for 0.8300
AUDUSD: RBA signaled that they were in no hurry to raise rates, but still not that much downside action. Buying dips towards 1.0550 looks the most attractive for now.
USDCAD: Still favor selling rallies for a move back below 0.9700. If we break above 0.9900 this view would be wrong I reckon.
S&P Future (ES): Expect the low from Thursday last week at 1252 to hold and we are testing the key resitance at 1293 now that we need to get above to extend the rally to 1303. If we fail here at 1293, we are heading lower again towards 1275 or so I reckon.
Gold: Next interesting level to re buy is around the 1530 level. So, I am waiting for lower level to get involved.
Crude oil: Buy on dips above 91.50 I reckon for now and looking for a rally towards the resistance at 95.50. Need to see a daily close above 95.50 to open for a extension to 98.50 near term. We have minor resistance at 96.30 as well.
________________________________________
Risk Warning: Any information in this report is based on data considered to be reliable, but no representations or guarantees are made by Avantage Financial GmbH with regard to the accuracy of the data. This information is provided on condition that we accept no responsibility, legal or other for its contents. We, including our directors, officers, employees or publishers, disclaim all liabilities. Any statement constitutes only current opinions, which are subject to change. Neither the information nor any opinion expressed shall be construed to be, or constitute an offer to sell or a solicitation of an offer to buy any investments mentioned herein. Regardless of the account type you choose, there are risks inherent in trading, including the risk of loss greater than the original investment. The opportunity for profit creates a corresponding risk of loss. Anyone wishing to invest in any of the products mentioned should seek their own financial or professional advice. Prices can go down as well as up. Past performance is no guarantee of future results.

 

[PerErik]

complete trading log here: http://avantagefinancial.blogspot.com/2011/06/trading-recap-for-twitter-trades_22.html

The FOMC came in pretty much as expected and it looks like the rally in risk seen over the last 4 sessions is about to reverse. Reason is that several markets failed at some key resistance levels. S&P 500 futures failed at the 1293 level that I mentioned in the report, which should open for a least 1275. Crude oil failed to take out 96 resistance. Euro failed at 1.4450. So several indicators point to a dip over the next few sessions.
Trading wise I did some minor adjustments in the Crude structure, sold one additional 96 AUG call for 2.30 USD. I also put on a Corn structure, long 2x futures and short 6x 730 Aug calls. No change in the Euro structure, looking to hold that to expiration now unless my stop at 1.4420 in the Sep mini futures is taken out. Ideally we would expire around 1.42 on Friday.
Sold 2x 1300 end of month calls in the S&P 500 emini, receiving 700 USD in total.
Will be interesting to see if we break lower tomorrow as I expect, I am at least positioned for it.

You can see the complete trading log here: trading log
Good luck

 

[PerErik]

Trading recap 22nd of June

complete trading log here: http://avantagefinancial.blogspot.com/2011/06/trading-recap-for-twitter-trades_22.html

The FOMC came in pretty much as expected and it looks like the rally in risk seen over the last 4 sessions is about to reverse. Reason is that several markets failed at some key resistance levels. S&P 500 futures failed at the 1293 level that I mentioned in the report, which should open for a least 1275. Crude oil failed to take out 96 resistance. Euro failed at 1.4450. So several indicators point to a dip over the next few sessions.
Trading wise I did some minor adjustments in the Crude structure, sold one additional 96 AUG call for 2.30 USD. I also put on a Corn structure, long 2x futures and short 6x 730 Aug calls. No change in the Euro structure, looking to hold that to expiration now unless my stop at 1.4420 in the Sep mini futures is taken out. Ideally we would expire around 1.42 on Friday.
Sold 2x 1300 end of month calls in the S&P 500 emini, receiving 700 USD in total.
Will be interesting to see if we break lower tomorrow as I expect, I am at least positioned for it.

You can see the complete trading log here: trading log
Good luck

 

[PerErik]

Trading recap 23rd of June

see full blog here: blog

It was a very volatile and once more news driven session. We had the intial weakness that I pointed out in the report yesterday, which saw us gap lower at the open in the S&P 500 by 12.75 points. Pretty much risk off in the morning as we saw Crude oil take a bit hit on news that US will release 30 million barrels of strategic reserves to help the tight supplies. Crude traded below 90 USD briefly. I reckon the market reaction is a bit overdone given the fact that US is consuming about 25 million barrels per day. Anyway, the market is always right and down the Euro went as well. Corn also opened about 30 points down, but had a huge turn around and actually closing up a few points. That is a crazy comeback. We still have the key USDA release 30th of June, keep that i mind. Could see a big move on that release.
Trading wise I did a fair amount of trades, please check out the log to see all the trades, today's trades have been marked in red.
trading log

The most important for today was that I closed the Crude oil structure that I have had on for about a week and a half, making 4017,50 USD on that one, very nice.

 

[PerErik]

trading log update Friday 24 June at 13:20 cet

The trading log have been updated to reflect the latest changes.
The market has been very jumpy this morning and pretty much headline drive once again.
The Euro had a weak tone overnight, then a stronger than expected IFO sent it pretty much 90 pips straight up. Then news out of Italy that Unicredit and Intesa has been suspended after their shares falling about 3%. In addition ECB's Paramo comments that recovery is subject to high uncertainty.

This market climate is a bit more jumpy than I prefer, so I will likely make further adjustements especially to the S&P emini structure as we approach the US market open.

Link to trading log: here

Good luck

 

[PerErik]

Trading recap 24th of June

The week overall turned out very nice and the best so far, + 5225 USD (5,225%), very good indeed. The major contributor was the crude oil structure that took in 4017.50 USD.

See complete trading log

Very choppy day again as the headline continue to dominate the markets. As mentioned in the mid-day update the IFO release sent the Euro back up after overnight weakness. Only to fall back down on various comments and halting of Unicredit and Intesa stocks in Milano after they fell more than 3%.
The choppyness in the Euro forces us to hedge back and forth and pretty much took out the profit potential and I was excersised on the 1.42 puts, which has given me long 2 futures at 1.42. I am short mini Euro futures to hedge this exposure, total of 4 mini futures, so they are fully hedged. I will close all this positions on Monday and then add up the total for the structure.
The S&P 500 emini structure I had on turned out pretty well. I did get thrown out a bit on the spike higher on the US GDP release today, which was slightly better than last estimate. However I was able to get back in short pretty quick, so it had limited impact.
I did add a gold structure today, long 2 futures and short 2 1520 August calls. One of the futures I had on since yesterday. I expect to see a rebound in gold start of next week. If I am wrong I will sell out the futures and keep the calls on and probably sell some puts to create a short strangle.

Have a nice weekend

 

[PerErik]

Trading recap 27th of June

The S&P500 put in a nice rally Monday to get above the key 1277 resistance, which forced me to hedge som delta on the 1270 short calls I have on for expiration 30 June. I also bot back the 1300 calls that I sold last week for a gain of 610 USD, pretty decent. Why I bot them back? Because they were trading for 0.90 per contract = 45 USD per contract. I see no point keeping them on in case we got a rally to make another 45 USD per contract. That would be bad risk management in my opinion. I also sold 2 contracts of the 1280 calls for expiration 30 June, receiving 8 points per contract = 800. My view is that unless we rally above 1294, the next leg is down, therefore I want to be short delta to express a bearish bias that I hedge if I am wrong of course. Since the market is so jumpy at the moment it feels better to have the options structure than a pure short futures position. As this options gives me a bit more flexibility.
Otherwise I did one crude long, buying in below 90 USD level that has been support a few times before, made 35 cents on that long = 175 USD.
I will close out the Euro positions from Friday on Tuesday.

The entire trading log can be found here

Good luck

 

[PerErik]

Market Report Tuesday 28 of June

full pdf version with links

Risk on yesterday and seems like it will continue today, at least that the moment with the S&P 500 emini futures trading up 8.50 points at 1284.75. That is well of the low we saw Friday at 1261.25. So it appears that we have once more bounce off that 1250 to 1260 support zone. The key level to get above now in my opinion to open for a larger rally is 1294, as that would make a higher low and higher high on the daily chart. Last week’s high was also 1293.75.

The market is very much news driven and the market is closely following the developments in Greece. We will have the austerity vote as the major event this week. My view for some time has been that the only likely outcome of the Greece story will be a structured or outright default. I just don’t see it possible for Greece to pay back the mounting debt they are accumulating within a reasonable timeline.
The US debt limit discussion is also another event risk on the horizon to keep an eye on going forward.
I also see there has been another bank failure in Denmark over the last days, Fjordbank Mors, a regional bank.
http://www.independent.ie/business/...ses-as-another-danish-bank-fails-2806921.html


Back the markets and what I am looking at this week.
Gold is looking interesting I think for a possible rebound


Looking at a few interesting points in the markets trading wise:
- Looking for a rebound in Gold towards 1520 over the next few sessions
- US 10 year futures is looking overbought and downside target is 123’20
- Euro has key resistance at 1.4496 that I think will be difficult to take out this week
- EURCHF looking very attractive to get long for a move back above 1.22
- Crude oil looks interesting to buy on dips above 89.50 for a move back to 93.80
- Corn looks oversold, first upside target is 690

Today’s calendar:
16.00 US consumer confidence
18.45 Bank of Canada Dep. Gov. Cote speaks
19.00 Fed's Fisher speaks
01.50 Japan industrial production

POMO, at 16:15 to 17:00, scheduled of $4 - $5 billion to be bought by NY Fed.

Interesting headlines:
Finance Minister Seeks Votes for Greek Austerity Plan - The WSJ -
http://online.wsj.com/article/SB100...0052974.html?mod=WSJEurope_hpp_LEFTTopStories


Extent of local debts in China laid bare - The FT -
http://www.ft.com/intl/cms/s/0/1e47d528-a092-11e0-b14e-00144feabdc0.html#axzz1QQh2MtL3



Five biggest threats to the US economy - The Telegraph -
http://www.telegraph.co.uk/finance/economics/8601623/Five-biggest-threats-to-the-US-economy.html
Greek minister warns of 'catastrophe' if parliamentary revolt leads to austerity bill being blocked - The Telegraph -
http://www.telegraph.co.uk/finance/...lt-leads-to-austerity-bill-being-blocked.html
A Greek debt buyback would avoid the dreaded default - The Telegraph -
http://www.telegraph.co.uk/finance/...-buyback-would-avoid-the-dreaded-default.html
China is building a better future for all - The Telegraph by Wen Jiabao
http://www.telegraph.co.uk/news/wor...hina-is-building-a-better-future-for-all.html
Greek Debt Talks Widen - The WSJ -
http://online.wsj.com/article/SB100...6291402.html?mod=WSJEurope_hpp_LEFTTopStories
Greek Bond Buybacks Discussed at Meeting - The WSJ -
http://online.wsj.com/article/SB100...7670756.html?mod=WSJEurope_hpp_LEFTTopStories
Gold Can't Hold $1,500 - The WSJ -
http://online.wsj.com/article/SB100...041346.html?mod=WSJEUROPE_hps_LEFTTopWhatNews
Euro Makes Gains on Greek Hopes - The WSJ -
http://online.wsj.com/article/SB100...99822.html?mod=WSJEUROPE_hps_sections_markets
U.K. Only Semi-Detached From Euro Zone's Troubles - The WSJ -
http://online.wsj.com/article/SB10001424052702304447804576411690944730546.html
Dollar seen losing global reserve status - The WSJ -
http://www.ft.com/intl/cms/s/0/23183a78-a0c6-11e0-b14e-00144feabdc0.html#axzz1QQh2MtL3

EU ‘Brady bonds’ plan for Greece - The FT -
http://www.ft.com/intl/cms/s/0/7c1a1f94-a0a6-11e0-b14e-00144feabdc0.html#axzz1QQh2MtL3

Give Greece time to prove it can do the job - The FT - By George Papaconstantinou
http://www.ft.com/intl/cms/s/0/fc16c638-a0f2-11e0-adae-00144feabdc0.html#axzz1QQh2MtL3

Obama Targets $72 Billion Business Tax Break - Bloomberg -
http://www.bloomberg.com/news/2011-...lion-business-tax-break-republicans-balk.html

Technical’s and comments

Euro: The next level of key resistance is 1.4380 to 1.44, with 2 week high of 1.4496 as the big level to the upside for now. To the downside we have followed by 1.4230 and key support at 1.4150. This pair is very choppy and not my favorite market to trade at the moment. If I had to pick direction I would still look to sell rallies.
Cable: Prefer to sell rallies in this pair at the moment with 1.6040 as the first level that I see as a potential entry level.
USDJPY: Very tight range over the last sessions. I remain longer term bearish on the JPY as the fundamental factors in Japan looks ugly, with huge public debt and unfavorable demographics going forward. However the risk off over the last days has taken us below 80 again. Not sure if we see any intervention unless the move picks up in speed and magnitude. Buy on dips for the brave.
Swissy: I expect the CHF to underperform Euro as the 1.20 EURCHF looks very rich in CHF terms. So maybe better to play Euro is negative on USD. Swissy is bearish below 0.8500 for now, looking for 0.8300
AUDUSD: Buying on dips above 1.04 looks the most interesting for now. Look out for any stock market sell off as a trigger to get out of longs.
USDCAD: Still favor selling rallies for a move back below 0.9700. If we break above 0.9900 this view would be wrong I reckon.
S&P Future (ES): Good upside momentum yesterday and this morning, but I reckon we must see a daily close above 1294 to really get bullish. A daily close above 1294 would give us a higher low and higher high on the daily chart, which should open for more upside. Key support is 1260, followed by 1250 now.
Gold: Looks interesting to be long above 1490 with relatively tight stop.
Crude oil: Buy on dips above 89.50 I reckon for now and looking for a rally towards the resistance at 93.80 near term. Need to see a daily close above 95.50 to open for an extension to 98.50 near term. A daily close below 89.50 would be negative and would not hold long if we break below this level.
________________________________________
Risk Warning: Any information in this report is based on data considered to be reliable, but no representations or guarantees are made by Avantage Financial GmbH with regard to the accuracy of the data. This information is provided on condition that we accept no responsibility, legal or other for its contents. We, including our directors, officers, employees or publishers, disclaim all liabilities. Any statement constitutes only current opinions, which are subject to change. Neither the information nor any opinion expressed shall be construed to be, or constitute an offer to sell or a solicitation of an offer to buy any investments mentioned herein. Regardless of the account type you choose, there are risks inherent in trading, including the risk of loss greater than the original investment. The opportunity for profit creates a corresponding risk of loss. Anyone wishing to invest in any of the products mentioned should seek their own financial or professional advice. Prices can go down as well as up. Past performance is no guarantee of future results.

 

[PerErik]

Trading recap 287th of June

Another risk rally today and the S&P 500 emini (ES) futures closed at 1294,25 just above last week's high of 1293,75. This give us a higher low and a higher high on the daily chart. See daily ES chart below

Had to hedge more delta as we gained momemtum to the upside in the ES. I still see the 1294 to 1295 as the key resistance at the moment. We have not really broken clean to the upside yet, just one point is not enough to convince me to put it that way. Although the rally has been quite strong off that 1261,25 low from Friday as you can see on the hourly chart, we only have 2 down bars last 2 sessions.
60 min chart

I made some adjustements to my ES options structure as I bought back the 4x 1270 exp 30 June calls and closed the 2 long futures and instead I sold 2X 1295 exp 30 June calls instead and sold 2x 1310 July calls (exp 15 Jul). My thinking is that if we break above 1295 by 2 points or so the market so have further upside potential. While below 1295 I still see risk for a move lower. Therefore I postioned myself for that scenario by using those options to express that instead of being purely short in the futures. The futures have traded fairly choppy last week and been tricky in my opinion. This options position give me a bit more margin for error so to speak.

I also closed out the Euro structure for 1100 profit today, so that is good.

Full list of the trading log here

Good luck

 

[PerErik]

Trading recap 29th of June

Complete trading log with charts: here

Another up day in the S&P 500 and we have now rallied very strongly off that low of 1261 on Friday last week. A few things that I want to point out. We have 50% Fibonacci retracement of the 1361 to 1252 move comes in at 1307, which is now the next resistance level. See S&P 500 emini daily chart below.


The 60min chart below looks pretty overbought and I don't think much has really changed the last few days. The Greek austerity vote is of course positive, but the upside from here is probably a bit more difficult than the bounce we have seen from 1250 area a few times now. I see chance for a pretty quick dip towards 1292 support over the next few sessions. A daily close below 1292 would be bad news for the bullish momentum. I am positioned for a dip in the options structure I have on in the S&P, so I don't want it to go above this 1307 resistance.


Trading wise I closed out the corn structure for a total of 837,50 USD in profit. The reason is simply that we have the USDA Acerage report out before the open tomorrow and I see the risk for a pretty big move in either direction, so not interested in playing that joker card as I have no strong bias on the outcome of that report.

Crude oil rallied strongly following DOE crude inventory data showed a larger than expected draw and got well above 94.07 gap we had on the daily chart. Next key resistance is the 96 level.

 

[PerErik]

Trading recap 30th of June

The quarter ended with a good move to the upside in the S&P 500 futures once again as we tend to see toward quarter end. We have now rallied just more than 50 points in the S&P 500 futures since Friday, not bad. It does looks overbaught now and it will be interesting to see if it can contiune the rally and take out that falling key resistance from the yearly high, which is coming in at 1317.

Corn had a huge move lower today following the USDA acreage report, which totally caught the market on the wrong foot. We had no limit in the July contract and it closed down by 69 cents, 9,9%. That is just nuts. http://www.bloomberg.com/news/2011-...rn-drops-after-u-s-reports-acreage-gains.html

I am considering setting up a trade (options) looking for somewhat of an retracement of today's drop. Will come back to that over the next few sessions.

Trading wise I did plenty of adjustments in the S&P 500 emini futures. See the log for all trades. The 1300 short puts expired out of the money, giving me the total premum collected in profit. Had to buy back the 1280 calls though as the market gained momentum to the upside. My thinking is that we should see a dip back down to 1292 next 3 sessions, which I am positioned for. If we break higher above 1317 I need to hedge more delta, so we will see what the market brings. I also sold 2x 1340 calls for August expiration at 15 per contract, thinking that the upside should go much slower from here, so should be able to get out quite a bit of time value on those.

I also added one more put spread in the Euro right before the close. I think we will trade down towards the 1.43 to 1.4250 level pretty quickly again.

See full list of trades here

Good luck

 

[PerErik]

Market Report Friday 1st of July

Full pdf version here

Daily Market Report for Friday 1st of July 2011
Sign up to receive the daily report directly by email (fill out form at this page): http://avantagefinancial.ch/contact?avantagefinancial_ch=5b87a7ae083a034fb21f15a963ab7882
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The quarter ended with a good move to the upside in the S&P 500 futures once again as we tend to see toward quarter end. The S&P 500 was basically flat for the quarter (-0,39%) and is up 5,01% for the year. We have now rallied just more than 50 points in the S&P 500 futures since Friday, not bad. It does looks overbought now and it will be interesting to see if it can continue the rally and take out that falling key resistance from the yearly high, which is coming in at 1317, see chart of the S&P 500 emini futures below how that trend line is clear resistance now. I favor a move back to the 1292 support over the next 3 sessions.


Corn had a huge move lower today following the USDA acreage report, which totally caught the market on the wrong foot. We had no limit in the July contract and it closed down by 69 cents, 9,9%. That is just nuts. http://www.bloomberg.com/news/2011-...rn-drops-after-u-s-reports-acreage-gains.html

I am considering setting up a trade (options) looking for somewhat of a retracement of yesterday's drop, but I first want to see that corn can stabilize a bit and not continue the melt down. Will come back to that over the next few sessions over Twitter, where I publish my trades in real time.
Another chart I found pretty interesting is the Crude oil chart. We have a strong bounce off that 89.69 low last week up to test the key resistance at 96. However it failed 2 consecutive days to get above the 96 level and I now fancy a move lower back to the 92.90 support. Take a look at the chart below and you see that 96 is the key pivot level, with both a prior daily high and a falling resistance line in that region.



I am a bit surprised to see gold and silver performing so weak over the last few days. When we see risk bid gold and silver seems to be lagging and not able to get any real momentum. Looking at the chart it shows the reason. We have taken out the interim support and broken to the downside of the triangle that we have been trading inside for the last 2 months. Looks like we can test 1464 next.
A key factor can be that interest rates have moved up along the curve, making it less attractive to hold gold and silver as they are not generating any cash flow, so when the interest rates rises it becomes more attractive to hold Treasuries compared to Gold. Looking at the correlation between gold and US 10 year Treasury futures the prices are pretty correlated, meaning lower interest rates is bullish for gold and vice versa. But who really cares about the reason for moving lower? Price action is always the king.



Looking at a few interesting points in the markets trading wise:
- Key resistance 1317 in the S&P futures and I am looking for move back to 1292 support over the next 3 sessions.
- We have Independence Day in the US on Monday, meaning the US market is closed.
- Crude failed at 96 for the second consecutive day yesterday; expect a dip towards 92.90 support.
- Silver is approaching the lower end of the last month’s range, range 32.75 to 38.76.
- Gold has broken to the downside and looking for a test of the May low at 1464 next.
- Euro is looking overbought; I fancy a move back to the 55 exponential moving average at 1.4330 near term.

Today’s calendar:
15:55 US Michigan Sentiment
16:00 US Construction Spending
16:00 US ISM PMI

Over the weekend, the EU and IMF will meet to decide on the 5th loan tranche to Greece.
Interesting headlines:
State is now dominant force in US capital markets - The FT -
http://www.ft.com/intl/cms/s/0/638185f8-a303-11e0-a9a4-00144feabdc0.html#axzz1QQh2MtL3


Greece approves second part of controversial austerity bill - The Telegraph -
http://www.telegraph.co.uk/finance/...ond-part-of-controversial-austerity-bill.html
Emerging markets could be the new safe haven for investors - The Telegraph -
http://www.telegraph.co.uk/finance/...ould-be-the-new-safe-haven-for-investors.html
German Banks Agree to Greek Aid Deal - The WSJ -
http://online.wsj.com/article/SB100...5650580.html?mod=WSJEurope_hpp_LEFTTopStories
Belgium: Give Greece More Money - The WSJ -
http://online.wsj.com/article/SB100...628850.html?mod=WSJEUROPE_hps_LEFTTopWhatNews
Trichet Against Non-Voluntary 'Debt Action' - The WSJ -
http://online.wsj.com/article/SB100...363634.html?mod=WSJEUROPE_hps_LEFTTopWhatNews
QE2′s Winners and Losers - The WSJ -
http://blogs.wsj.com/marketbeat/2011/06/30/qe2s-winners-and-losers/
Senate Democrats Invite Obama for Debt Talks - The WSJ -
http://online.wsj.com/article/SB100...15732130.html?mod=WSJEUROPE_hps_sections_news
A Case When Buying Time Worsens the Burden - The WSJ -
http://online.wsj.com/article/SB10001424052702304450604576417921818436698.html
Greece can be saved – here’s how to do it - The FT -
http://blogs.ft.com/the-a-list/2011/06/30/greece-can-be-saved-heres-how-to-do-it/#axzz1Qo3dyAOj
Geithner talks of quitting US Treasury - The FT -
http://www.ft.com/intl/cms/s/0/b7c0038a-a342-11e0-8d6d-00144feabdc0.html#axzz1QQh2MtL3
Japan’s Tankan Deteriorates to Worse-Than-Expected Minus 9 on Quake Impact - Bloomberg -
http://www.bloomberg.com/news/2011-...se-than-expected-minus-9-on-quake-impact.html

Technical’s and comments

Euro: I expect the falling resistance to hold and a move back into the range, targeting the 55 EMA at 1,4330. Might be interesting to look at some downside option plays?
Cable: Looks like a better choice to short GBP than Euro at the moment as we have broken above the key resistance level at 0.90 in EURGBP. First upside level to get short I figures is around the 1.61 level and stop above 1.6150 or so.
USDJPY: Very tight range over the last sessions. I remain longer term bearish on the JPY as the fundamental factors in Japan looks ugly, with huge public debt and unfavorable demographics going forward. However the risk off over the last days has taken us below 80 again. Not sure if we see any intervention unless the move picks up in speed and magnitude. Buy on dips for the brave.
Swissy: Strong move higher in the EURCHF as we are once again above the 1.2250 level. Expect gains in the EURCHF to be much slower going forward. Given that I think we see a move lower in the S&P next it could be interesting to look at a downside play in USCHF near term. Have resistance at 0.85 at the moment.
AUDUSD: We have strong resistance around the 1.0750 level, so would not chase the price action above that level.
USDCAD: Rapid move lower and I think it makes sense to wait for a rally back up towards 0.9730 or to get short again.
S&P Future (ES): Ended yesterday higher as I expected, although a bit higher then I had anticipated. Have key falling resistance from the yearly highs coming in at 1317. Expect a move lower to 1292 support over the next 3 sessions.
Gold: Broken to the downside technically and next downside target is 1464. I would not go short at current levels as we have seen plenty of bounces in this region. If long I would prefer to use options or possibly long futures and sell some calls against the long futures to give a bit more flexibility.
Crude oil: Failed at 96 resistance for the 2nd consecutive day yesterday. I now look for a move down towards 92.90 support.



________________________________________
Risk Warning: Any information in this report is based on data considered to be reliable, but no representations or guarantees are made by Avantage Financial GmbH with regard to the accuracy of the data. This information is provided on condition that we accept no responsibility, legal or other for its contents. We, including our directors, officers, employees or publishers, disclaim all liabilities. Any statement constitutes only current opinions, which are subject to change. Neither the information nor any opinion expressed shall be construed to be, or constitute an offer to sell or a solicitation of an offer to buy any investments mentioned herein. Regardless of the account type you choose, there are risks inherent in trading, including the risk of loss greater than the original investment. The opportunity for profit creates a corresponding risk of loss. Anyone wishing to invest in any of the products mentioned should seek their own financial or professional advice. Prices can go down as well as up. Past performance is no guarantee of future results.

 

[PerErik]

Trading recap 4th of July

Did just one trade today, sold 1x 1320 puts for expiration at 15 July for 8,75 points.
My thinking is that the risk on from last week will extend towards the NFP report out Friday. That will be the next big event risk in my opinion.
We need to see a recovery in the US jobs market to see any new yearly highs in the S&P 500. The latest trend of the US data have been for a slight recovery, meaning the weak set of data that we seen for a few months is about to reverse for the better. Seems like the market is pricing in a decent NFP report now. Another weak number would definately cause the biggest potential move.

The updated trading log can be seen here

Good luck

 

[PerErik]

Market Report Tuesday 5th of July

See the full pdf version here

Daily Market Report for Tuesday 5th of July 2011
Sign up to receive the daily report directly by email (fill out form at this page): http://avantagefinancial.ch/contact?avantagefinancial_ch=5b87a7ae083a034fb21f15a963ab7882
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Very quiet day yesterday with the US markets closed in observance of Independence Day. It seems like the “risk on” theme continues this morning and we are heading back up in the metals and crude. Both gold and crude have broken above key resistance levels, 1502 and 96.00 respectively. It is key now that these gains hold and not get any kind of sell off into the close, because that would really invite for sellers to take over. Euro is not doing too much to the upside yet, but given that we are in the upper end of the recent range I think we need to get some fresh news to extend above the 1.4564 resistance level. We have ECB and US NFP report later this week, which are the next major events on the economic calendar.
My thinking is that the European debt crisis will not go away quickly and probably come back to hit us sooner rather than later. We have had a nice rally in the S&P 500 over the last 2 weeks, but from here it will be more difficult to go higher in my opinion. With the QE2 over as well, the support for the equity markets could be thin during the summer months. Technically the 1340 resistance is an important level to get above to continue to the upside. I suspect a lot of traders looking to short up around the 1330 to 1340 and stops above 1361.75, the yearly high. It would be healthy for the rally to get some kind of pullback before going higher, if not I am afraid the selling pressure will get too big on any break higher. Friday’s break out level of 1317 is now support.
CHF out performing this morning as the recent losses corrects a bit. I reckon the next level to look long is around in the 1.2050 in EURCHF.
I am still looking to add some type of position in Corn following the huge sell off week, but I have not made up my mind what the position will be yet. I will come back on that during the next few sessions.
Looking at a few interesting points in the markets trading wise:
- 76,4% Fibonacci retracement of the 1361.75 – 1252.25 move comes in at 1336, which was right around the Friday’s high (1336.50). The high from 31st of May at 1340.25 is the next key target. Break out level of 1317 is now key support.
- Crude punching through the 96.00 resistance today, next key level is 98.00.
- Silver bouncing off the lower end of the last month’s range of 32.75 to 38.76. Can we head back up towards the upper end of the range?
- Gold have broken above 1502 key resistance, next upside target is 1520.
- Key resistance in Euro up at 1.4564, which I expect to hold for the next 2 sessions.




Technical’s and comments

Euro: The break above 1.45 Friday opens for an extension higher as I think we will see the risk on theme continue going into the NFP report Friday. The resistance levels today are the low from 7th of June at 1.4564 and the high from the same day at 1.4695. We have support at the 3 days’ low of 1.4436.
Cable: Looks like a better choice to short GBP than Euro at the moment as we have broken above the key resistance level at 0.90 in EURGBP. First upside level to get short I figures is around the 1.61 level and stop above 1.6150 or so.
USDJPY: Very tight range over the last sessions. I remain longer term bearish on the JPY as the fundamental factors in Japan looks ugly, with huge public debt and unfavorable demographics going forward. However the risk off over the last days has taken us below 80 again. Not sure if we see any intervention unless the move picks up in speed and magnitude. Buy on dips for the brave.
Swissy: Have resistance at 0.85 at the moment, which is the pivot level in this pair for now I think. Bearish below this level and bullish above.
AUDUSD: We have strong resistance around the 1.0750 level, so would not chase the price action above that level. The buy in level of 1.0550 or so is the place I would look to try long again.
USDCAD: Rapid move lower and I think it makes sense to wait for a rally back up towards 0.9730 or to get short again.
S&P Future (ES): We have key resistance up at 1340.25 and minor resistance at 1336. Looks overbought and selling rallies below 1340 looks the most attractive today. If we break 1340, I would reverse to look long. Key support is not Friday’s break out level of 1317.
Gold: Falling resistance of 1502 was taken out this morning, this opens for a run towards 1520 resistance next.
Crude oil: Took out the 96 key resistance this morning and it is key that we hold the gains today into the close to open for higher levels. The next key resistance is 98. Key support is still down at 92.90.



________________________________________
Risk Warning: Any information in this report is based on data considered to be reliable, but no representations or guarantees are made by Avantage Financial GmbH with regard to the accuracy of the data. This information is provided on condition that we accept no responsibility, legal or other for its contents. We, including our directors, officers, employees or publishers, disclaim all liabilities. Any statement constitutes only current opinions, which are subject to change. Neither the information nor any opinion expressed shall be construed to be, or constitute an offer to sell or a solicitation of an offer to buy any investments mentioned herein. Regardless of the account type you choose, there are risks inherent in trading, including the risk of loss greater than the original investment. The opportunity for profit creates a corresponding risk of loss. Anyone wishing to invest in any of the products mentioned should seek their own financial or professional advice. Prices can go down as well as up. Past performance is no guarantee of future results.

 

[PerErik]

Trading recap 5th of July

Good evening,
Take a look at the latest trading log here

The S&P 500 futurs traded to a high of 1337 today, 0.50 points above Friday's high. Today's volume was relativly very low, 1.377m S&P 500 Emini contracts traded, which is the lowest volume day since the September became the front month. The next key resistance is now the 1340.25 high from 31st of May. Technically the bullish momentum is strong above today's low at 1329.25. The key support is down at the 1317, the break out level from Friday.

Trading wise I added one more 1320 put for 15 of July expiration, because I think the risk on theme will be supported for another few sessions and that is a decent hedge against the short 1340 Aug and 1350 Aug calls.

Crude had a nice break out above 96 key resistance and I went long at 96.05 and took profit at 96.50.

I also closed the Euro structure for a total profit of 237 USD on the 2 put spread done over the last week. Given that we didn't see the move towards 1.4350 I was looking for it was decent as the % payback on the premium paid was 54%.

In general I like to put my main focus on making money and not so much about being correct on all the analysis. The point is that the risk management and position adjustment are very important. Because most of the time I will not be spot on with the analysis, so it becomes very important to be able to make money even though one is a bit off on the market analysis.

Good luck

 

[PerErik]

Market Report Tuesday 6th of July

see the full version here

Daily Market Report for Wednesday 6th of July 2011
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Portugal was downgraded to junk (Ba2) by Moodys yesterday and the European debt crisis suddenly back in focus, sending the Euro lower down below the 1.4350 support today. The market remains very news driven. The downgrade of Portugal was based on the view that Portugal will not be able to borrow as sustainable levels in 2013 and might need a second round of bailout. It seems to me that the rating agencies are now doing a better job than before the financial crisis at least, where they got way behind the curve on many fronts.
There seems to be a lot of indecisive comments out of Euro zone of late. I see a headline this morning that Germany wants to have another look at the Greek swap idea, which earlier ECB was opposed to. See link below:
http://www.reuters.com/article/2011/07/06/us-eurozone-germany-greece-idUSTRE7651N120110706
I just repeat my comment from yesterday, which I still stick to: “My thinking is that the European debt crisis will not go away quickly and probably come back to hit us sooner rather than later. We have had a nice rally in the S&P 500 over the last 2 weeks, but from here it will be more difficult to go higher in my opinion. With the QE2 over as well, the support for the equity markets could be thin during the summer months. Technically the 1340 resistance is an important level to get above to continue to the upside. I suspect a lot of traders looking to short up around the 1330 to 1340 and stops above 1361.75, the yearly high. It would be healthy for the rally to get some kind of pullback before going higher, if not I am afraid the selling pressure will get too big on any break higher. Friday’s break out level of 1317 is now support.”
EURCHF have corrected lower and slightly below the 1.2050 support level now at 1.2030. To me this level seems to be attractive level to have a look at the long side again for another drive to 1.22.
I am still looking to add some type of position in Corn following the huge sell off week, but I have not made up my mind what the position will be yet. I will come back on that during the next few sessions.
Today’s calendar (CET):
16.00 US ISM (non manufacturing)
02.30 Aussie employment data
The DOE Crude oil inventory and the US ADP report will be released tomorrow due to the holiday shortened week.


Looking at a few interesting points in the markets trading wise:
- 76,4% Fibonacci retracement of the 1361.75 – 1252.25 move comes in at 1336, which was right around the Friday’s high (1336.50). The high from 31st of May at 1340.25 is the next key target. Break out level of 1317 is now key support.
- Crude punching through the 96.00 resistance yesterday, next key level is 98.00.
- Silver bouncing off the lower end of the last month’s range of 32.75 to 38.76. Can we head back up towards the upper end of the range?
- Gold have broken above 1502 key resistance, next upside target is 1520. Target met and next level is 1530.
- Key resistance in Euro up at 1.4564, which I expect to hold for the next 2 sessions. Spot on yesterday with that view and we are down below 1.4350 today.

Technical’s and comments

Euro: We are back below 1.4350 after the Portugal downgrade yesterday. The resistance levels today are the low from 7th of June at 1.4564 and the high from the same day at 1.4695. We have a series of support levels from 1.4320 down to 1.4237.
Cable: We failed towards 1.6140 again yesterday. Looks likely we will drive down lower again with support at 1.5990 followed by 1.5910. I don’t expect to see a break below 1.59 before the Bank of England rate announcement tomorrow.
USDJPY: More up and down in the Yen, with lack of direction and focus this pair seems to be on the sideline for now. I remain longer term bearish on the JPY as the fundamental factors in Japan looks ugly, with huge public debt and unfavorable demographics going forward. However the risk off over the last days has taken us below 80 again. Not sure if we see any intervention unless the move picks up in speed and magnitude. Buy on dips for the brave.
Swissy: Have resistance at 0.85 at the moment, which is the pivot level in this pair for now I think. Bearish below this level and bullish above.
AUDUSD: We have strong resistance around the 1.0750 level, so would not chase the price action above that level. The buy in level of 1.0550 or so is the place I would look to try long again.
USDCAD: Rapid move lower and I think it makes sense to wait for a rally back up towards 0.9730 or to get short again.
S&P Future (ES): We have key resistance up at 1340.25 and minor resistance at 1337 (yesterday’s high). Looks overbought and selling rallies below 1340 looks the most attractive today. There is a potential double top on daily chart if we fail towards the 1340 level. If we break 1340, I would reverse to look long. Key support is not Friday’s break out level of 1317.
Gold: Break above 1520 opens for 1530 and higher next. I would look to buy if we see any dip towards 1515.
Crude oil: Took out the 96 key resistance yesterday and this 96 level held on the test lower this morning. That is bullish confirmation for me and looks like we will test next key resistance at 98 next. Key support is now down at 96. If we break below 96, the risk is for stop loss festival will send it lower.



________________________________________
Risk Warning: Any information in this report is based on data considered to be reliable, but no representations or guarantees are made by Avantage Financial GmbH with regard to the accuracy of the data. This information is provided on condition that we accept no responsibility, legal or other for its contents. We, including our directors, officers, employees or publishers, disclaim all liabilities. Any statement constitutes only current opinions, which are subject to change. Neither the information nor any opinion expressed shall be construed to be, or constitute an offer to sell or a solicitation of an offer to buy any investments mentioned herein. Regardless of the account type you choose, there are risks inherent in trading, including the risk of loss greater than the original investment. The opportunity for profit creates a corresponding risk of loss. Anyone wishing to invest in any of the products mentioned should seek their own financial or professional advice. Prices can go down as well as up. Past performance is no guarantee of future results.

 

[PerErik]

Trading recap 6th of July

The S&P 500 emini (ES) broke below yesterday's low of 1329.25 in early trading, as the China rate hike saw risk come off. It got down to 1326 before it reversed higher to close right up at the top of today's range and 0.50 point below yesterday's high of 1337.
The volume was higher than yesterday and the ability to hold the downside is rather impressive I have to say. Seems to be plenty of buyers on dips. I was looking for a deeper correction to test the 1317 support (break out level from Friday), but just not much downside momentum at the moment. It is difficult to be very bearish at the moment, just looks quite strong in my opinion. Need to see some pretty bad news to make it go much lower than 1317, is my feeling at the moment. Key resistance remains the 1340.25 (high from 31st of May). I still think it would be healthy to see a correction to 1317. We have 7 straight up sessions now, for 71.5 points in the ES.
No changes made to the S&P 500 emini structure today.

I did one trade today, put on a Euro options spread to crush some Theta (time value) in the 8 Jul 1.42 put options, which was trading close to 19% vols beacause of the ECB and NFP event risks over the next 2 sessions.
I sold 2x the 1.42 8 Jul puts for 40 pips each and bought 1X the 1,42 put for 5 Jul expiration. This position is slightly long delta and had Theta of 414 USD per day. I expect the Theta to drop substancially after the ECB press conference tomorrow.
I will hedge the delta if we break 1.4250 as well.

Gold moved up substancially today, taking out both 1520 and 1530 resitance levels.
I don't think it will expand much further heading into to NFP, so I will keep the Gold structure as it stands for now.

Crude had a successful test of the 96 break out level (now support) early on in the sessiosn and it looks rather bullish now for a test to break 98 key resistance. Looks tempting to put on a call structure above 98 and trade against it in the futures, cause I see 98.35 level as the pivot level now. Will see if we can get a test of 98 or so over the next few sessions to put on a trade.
Crude oil Aug futures chart below.

See complete trading log here