FX Futures Edge, Monday July 22: Risk Now Mispriced
Richard Rhodes | Jul 22, 2013 02:55AM ET
STOCKS:
The world economy is weakening: the US payroll tax increase and “sequestration” are pressuring the US economy; China is being pressured by Japan, and has “dampened” their housing market. the Eurozone remains mired in “inaction.” For now, although we feel that risk is being mispriced at current levels given recent pressure upon world economic figures and the developing pressure upon corporate margins/ earnings — the consensus is that the world’s central banks will save the day.
STRATEGY: The S&P 500 remains above the 160-wma long-term support level at 1341; and the standard 200-dma support level at 1521. But perhaps more importantly, the distance above the 160-wma has has now faltered below the +23% “bubble-like rally” threshold. This is a warning sign to be sure; especially given 1600 was violated to the downside.
WORLD MARKETS ARE MIXED AS WE BEGIN MONDY MORNING as there is very little on the overnight news line that would push prices either sharply higher or sharply lower. In effect, Europe shall be leaving on vacation for the month of August, and they are likely to continue “book squaring” in lieu of relaxing on a beach and understanding perhaps that their years may have been made at this juncture. And why not? With the German DAX up +10% YTD, and the continued uncertainly surrounding the Fed and tapering, as well as the US Congress and the budget deficit upcoming…it would be reasonable to step back and reassess after a month on the Riviera. If we were so lucky, then we would certainly do so. But truth be told, a hot, dusty baseball field coaching our 12U travel baseball team (Lower Merion Hawks) in a close game is better than any day on the Riviera – every time.
To Read the Entire Report Please Click on the pdf File Below.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.