Just for the record, since I have started this blog, I haven't had a "Bearish Commentary" when it comes to the broad markets and I am definitely not bearish now. I basically put an "all out buy" on the blog yesterday and the markets cooperated. As we will see, the SPY broke out today and is at a new bull market high.
Why was I so bullish? We have lots of data tomorrow with Durable Goods and the Fed. Look back at the markets and do some research to the few days leading up to a Fed announcement. We rally (hard) about 90% of the time. It seems that the markets are daring the Fed to NOT say EXTENDED. Basically, the closer it gets to an announcement, the more the markets rally as they are saying: "don't dissapoint us Ben!" because we will fall hard if you do anything but stay accomodative. So my expectation is: we will see the Fed say that:
**inflation isn't proven to be a consistent problem (go buy some milk!)
**rates will be low for an extended period.
If we don't get that message, look out below! In addition, we have public appearances by Ben as well as initial claims and GDP and then we are only a week away from the unemployment report. I estimate that we will add no more than 200k jobs.
To the markets we go and I want to show you that breakout in the SPY:
Moving into the forex markets and this is why I title my webinars (next one tomorrow evening) BACK TO BASICS because every currency pair is acting differently. We had a beautiful DOUBLE FALL LINE TRADE in the GBP/USD:
Look at what the EUR/USD did during the same timeframe:
Not too similar on a day trade, but overall the pattern is weak USD as shown in both charts on a daily timeframe (GBP/USD is on top and EUR/USD is on bottom)
The dollar smashing continues as equities leaked higher today. USD/CAD is around .9400.
Let's wrap up with our socially responsible investing plays starting with WFMI - I have been calling for protection due to a severe increase in price and the potential for double tops: covered calls at resistance anyone?
Cheap LED's anyone with the worldwide leader, CREE:
Not sure are you? This is a good example of a LAGGARD. The markets rally hard and this stock gets pummeled - this is where you know fundamentals are in charge and it can be dangerous to trade it to the long side, but you may want to invest in it as its yield may become more attractive.
Happy Trading and see you tomorrow night for the webinar,
Coach Brian
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