The Local's Take: Afternoon Commentary

Good Afternoon,
Seems like support really is the 1260 level, where is resistance? We sold off a bit today at the end as the the SPX lost about 4 points going into the close. I really hope 1260 is the low and we have a nice trading range for about 2-3 weeks so my June-July protection expires with full value. I am not too sure how the SPX can climb from 1260 to 1330+ without taking a pause. Actually I do know: QE3.
Why am I thinking we will have a cap in the 1300 area? Well, it is because of my opinion of the upcoming economic data, including the jobs report which is now only 8 trading days away. I don't think little to no job growth gets us to new highs without the Feds involvement. If I am wrong and the unemployment surprises to the upside, maybe we do get to 1330/1340 and new highs...
Let's get to today's trade. Starting with forex, we had a very strong EUR as compared to the GBP. So that gave us a huge move up in the EUR/USD and a chance for retracement trades in the form of a DOUBLE FALL LINE TRADE in the GBP/USD:

Past performance is not indicative of future results.
As far as equities go, I wasn't into individual companies, but did go for the oil sector with USO. Seems like 35 is the support level. Can oil dip into the 80's? Absolutely. What will get it there? It won't be the strengthening dollar (alhtough it could be a weakening cross currency). Most likely it will be supply and demand. Less jobs, less people fly to conventions, less people need to rent cars for business meetings in other cities.... I like owining USO in this range, but I also want to create income (lower my cost basis) while owning it.


Past performance is not indicative of future results.
What I just said is a huge difference in trading strategies. Did I say I like it here or I am bullish here? Now you can see why the markets tell me (you) which strategy to implement and what you are looking for as far as managing your exit.
Just to show you what lots of stocks are doing right now and how you can take advantage of selling into rallies, let's look at AXP over the past few months:


Past performance is not indicative of future results.
Looking forward to introducing the U of U class to options and forex this evening.

Happy Trading and Be Environmentally Cool
Local Tip: Wednesday night concerts put on by Mountain Town Music at Deer Valley - seems like the entire community is there!

Coach Brian

Forex trading is   one of the riskiest forms of investment available in the financial   markets and suitable for sophisticated individuals and institutions. The   possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to   lose.