Tommorrow represents one thing. Opportunity. The volatility should give lots of room for interesting moves.
I like fading the one month, 6 cent down move in the dollar. Not permanently, but certainly it looks a little late in the day to be piling on the shorts. On Sep 10th we saw a high at 83.30 Today’s 9 month low at 77.15 came very close to our old Jan 13th low at 76.89. Perhaps that explains the snap back higher. We could easily bounce back to 79.50 or even 80.25… I like selling the dollar at 80.25 again if we snap back there.
As we head into tomorrow’s Un-enjoyment number, I don’t think unless we are measurably above or below 10%, then I think it will be anti-climatic. A move above or below of 1/4 point, however could be interesting. Quite honestly, the only people who know the number are locked away in some office building in Washington DC waiting for 8:30 AM number. 8:30 EST, 7:30 CST. Here in Chicago, we will be waiting. The first 20 seconds after the release will be interesting, to say the least.
For the life of me, i can’t understand how we avoided the 11,000 print today in Cash Dow. As it lies, we have have rallied 1,062 points in the Dow from trough to apex. 1,106 points in 6 weeks. Can anyone say “Correction”.. Quite simply, we have come too far without a bear scare of any significant size.I like a pullback down to 10600 or even 10,500 to clear out the weak longs. Clean out the weak longs, beat the drums of despair in the media and with the politicians as we inter the last 30 days of the election cycle. If we do get a correction, both the Dems and the Republicans will try to make hay by blaming the other side. The Dems are still blaming Ronald Reagan… The Republicans will go on the attack blaming it all on President Obama.
As investors or traders, its your job to ignore the noise. Trade the market and leave the big picture ideas to the egg heads and intelligentsia.
If the market gives you opportunity, seize it. Standing around waiting to understand it and classify it, over analyze it, will always leave you one step behind the market.
What I am saying, is that it shouldn’t matter what the market does to morrow. Get yourself in a position to take advantage of the move. Worry about why it happened this weekend when you are listening to your favorite analyst.
For the grains, we will have the USDA number tomorrow. Again, the market is poised to do some break dancing. My guess is that it will hurt as many people as it can. That right now, would leave me to think there is a better chance for a break lower in Corn and Beans. Will the USDA address the extra 300M bushels of corn they discovered last week with the ending stocks? Will acres magically appear or disappear? One way or another, the only people who know are locked away without cell phones or web access.
With the grains, however, we will have 2 whole hours to digest the number before the market opens. My guess is it could be an exhausting 2 hours of jawboning. Whosoever on the short end at that time, will undoubtedly be weeping and gnashing their teeth, cursing the USDA.
My advice is to get your risk defined. Address it tonight before the market opens to morrow. Then go to sleep and look forward to the opportunity in front of us tomorrow.
For the record, I think there is more risk of a temporary correction lower for Corn.
I have, however, been looking at an inevitable upside target at 584 in CZ.
Good Trading. And remember, use your stops. Also, don’t trade just to trade. Wait for the trade to come to you.
That is All.