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Trading > Netto's Numbers

Markets Catch a Bid Into Fed Week, Points of Control for Dec 12-16

John Netto | Sun, 12/14/2008 - 10:28pm | Currencies, gold, Inflection Points, USDJPY |  1 comment

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With the US Dollar coming under pressure last week, commodities showing strength, and equity markets closing in the upper end of the weekly range, focus shifts to the Fed's decision on rates for the upcoming week. While the Fed Funds Futures price in around a 70% chance of a .75 bps cut, what's more important for traders to look at are points on the charts that let us know when this current rally has lost legs, and when our bias should resume back to selling rallies.
Below are listed the major levels that should the markets hold, a bullish, buy-the-dip posture, should be taken with trades. I will update these levels throughout the week with
EURUSD - 132.50
USDCAD - 125.25 - Action below this level is short term bearish for the USDCAD
EURJPY - 120.57 - Action above this level is bullish for EURJPY
February Gold - (GCG9 - Comex) - 808 - Any pullbacks that hold this level should be bid into
US 30 year Bonds (US M9) - 132-25 - Action above this level is bullish
S and P 500 Futures (ES M9) 865 - Action above this level is bullish
USDJPY - This is the one albatross on things but we have seen a decoupling of the currency markets to the equity, most notably in this cross in here. The greenback still seems particularly vulnerable in this cross and this sentiment will persist with action below 9250. However, I think if this can rally to 95, there will be a great chance to step in and short.
My next blog will come Tuesday...

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Absolute- ZERO

roguetrader | December 16, 2008, 1:38 am

there is no question, as i have been telling my clients, followers for 6 years, that the overnight rate will and MUST go to zero before any sinerio of a recovery can take place. And zero isn't the end of the tunnel, just one of the tablets that has to happen prior. i think it unfair if not and abomination not to mention who is to blame for all of this mess. Alan Greenspan and,,,,, and his federal reserve! History will show that this statement is so simple to deduce and so obvious that Stevie Wonder could see it. The catastrophic over capitalization he abominated on the market around 97-99 is the primer for the bigger bomb that the world is undergoing. in essence, give someone more money than they can effectively use and they will misuse it. the good news is that those of 'us' and clients of 'us' were warned and prepared to take advantage of this mess to a profitable manner. of course the statement of Absolute -ZERO must be punned in my closing statement that solidifies the previous- its a Zero Sum Game!