Hello All, A day of asset shifting as gold had a $90 range and ended well on the lows ahead of option expiration on Thursday. The S&P and Crude have retraced 50% of their drop from late last week in anticipation that Bernanke will hint towards additional easing. But my thesis remains the same with respect to Bernanke not making any new proposals, especially ahead of Obama’s address after Labor Day. As long as Bank of America continues to head lower, I do not see any reason to proactively be purchasing stocks. Europe holds the keys to our financial solvency in the short term, and its been a few days since they’ve hit the headlines with respect to the debt crisis. Factory output in the central Atlantic region contracted again in August and new home sales fell to a five month low in July. The fundamental data isn’t there to support a rally, but we don’t necessarily need to make sense of choppy trading activity amidst current economic conditions. API data this afternoon showed a draw of 3.3 million barrels of crude, but offsetting that there was a large build of 6.3 million barrels of gasoline. We’ll see how much of a variance we’ll get with tomorrow’s DOE data, and look to get short intraday. The safe play is to choose your side and purchase options into Jackson Hole on Friday, where I expect we’ll see a sell the fact reaction. Next week’s activity will most likely be heavy on Monday/Tuesday and then die out going into Labor day weekend. Keep in mind that the short sale ban in Europe will be over by the 26th, ready to resume shorts come Sunday. S&P resistance is at 1170 where the downtrending channel kicks in; Crude oil is currently up against its resistance channel at $86. With respect to the Euro, it has rallied on dollar weakness based on Chinese and German manufacturing data released overnight (the data was bad but it wasn’t as bad as expected). The lows will be revisited folks, its all noise in the meantime. 1) Hold Sept. Euro shorts, with a 1.4450 stop. Exit below 1.43. To receive my market commentary via email, please submit a request. http://www.expofutures.com/futures-trading-research.php Arman Vahdatinia President, Chief Market Strategist 1-877-338-EXPO [3976] ext. 25 www.ExpoFutures.com *There is a substantial risk of loss trading futures and options. Past performance is not necessarily indicative of future results.
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