Friday, September 11, 2009
Daily Trading Stance
Stocks continued higher yesterday and we believe that it is still “risk on”, so expect stocks to go higher today – we still buy on
We have some macro data today, but only expect the U. of Michigan consumer confidence to be able to influence the market. It
could disappoint given the poor showing by the ABC confidence index on Tuesday, though an actual drop is unlikely.
US Jobless Claims was out yesterday and while they were slightly better than expected, it is amazing how many people are still
applying for unemployment insurance each week. We worry that most of the drop in continuing claims can be explained by
people who are transferred to the extended benefits program (unemployed 27 weeks or more).
Economic Data Releases
PPI Output YoY (AUG)
Wholesale Inventories (JUL)
University of M. Confidence (SEP)
1.4620 looks crucial. Buy sustained break abv for 1.47 else stuck in 1.4550-1.4620 range
133.0 suppt needs to hold for another chance on 134.0, else retrace to 132.60
Risk that we break through 91.0 suppt to test 90.50-60. Res now 91.50-60
Sustained move abv 1.6710 targets 1.6750-60. Ranging 1.6630-1.6750 n/term
Suppt at 0.86 lvl looks strong. Buy dips to 0.8615-20 for re-test of y’day’s highs
Even with spot up here, front end was weak with 1 week offered as low as 10%. Seeing
some interests in the brokers to buy risk reversals (buy EUR puts).
Buying interests noted in 1-2mth downside yesterday as we see early signs of nervousness
as spot approaches 9000. Large buyer of 1mth 9400s in the brokers today.
Early interests saw sellers of front end while risk reversals saw decent bids. Do not expect
spot to break under 850