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Archive for July, 2008
Weekly Outlook for Commodities from Odom & Frey
Commodities continue to consolidate as we have mentioned in recent issues. We are now seeing even the leader, crude oil, back off from its highs. While we do not in anyway think the overall bull is dead we do suspect he is tired and looking for a mid summer nap. Freddie and Fannie seem to have weathered the storm that we saw last week and confidence in the overall markets seems to be coming back. Overall we are looking for more firming in the Dollar with continued consolidation across commodities as a whole.
Crude Oil:
Oil did have the “break” we warned about. It does look like it was enough to “shake out” the weak hands. We are now buyers of dips again and are looking for a retest of the old highs and the probability of pushing through 150 remains higher than the probability of pushing back below 100. Between tensions in the Middle East and Africa, and continued increases in overall demand, there are more underlying reasons for the price to rise than fall. (…)
Trade Call for July 16, 2008
TRADE CALL RECAPS
Our last live trade calls were for the UK CPI and the US Retail
Sales reports that were released this morning. For the UK CPI,
we were looking to long the GBPUSD if the release came out at
least 0.2% better than expected on the Harmonized YoY figure. (…)
Trade Opportunity Tonight / Trade Calls for July 15, 2008
TRADE CALL RECAPS
Our last live trades were last Friday when we were watching
three news releases. First was the Canadian Labor Change
report, and we were looking to long the USDCAD or EURCAD if the
number came out at least 15k worse than expected. The actual
number came out with a -13k deviation, so our safe trigger was
not met. We did have some traders trade a medium trigger on
this trade and report profits of up to 30 pips. To see a video
of this trade, click on the link below:
http://www.tradingliveonthenews.com/vid/CADLaborChange071108/
Next we were watching the Canadian and US Trade Balance
reports, with our focus on the Canadian number. We were
looking to short the EURCAD if the number came out at least
0.8% better than expected. The actual number came out with a
0.2% deviation, so it did not meet our safe trigger. The US
Trade Balance came out with a deviation of 2.8%, which met the
1.5% deviation to trigger a safe trade. We only had a small
move of 10-15 pips on this release.
TRADE OPPORTUNITY TONIGHT
There is an opportunity to trade tonight when the NZD CPI
report is released at 6:45pm EDT. The focus should be on the
CPI (QoQ) figure, and the expectation for this release is
1.4%. We have placed a safe trigger of 0.2% for this release. (…)
Trade Opportunity Later Today
TRADING OPPORTUNITY LATER TODAY
There is an opportunity to trade later today when the New
Zealand Retail Sales report is released at 6:45 pm EDT. Our
focus is on the Retail Sales All Industries figure, and the
expectation for this report is -0.1%. We have placed a safe
trigger of 0.3% for this release. When this report has met our
safe trigger in the past, the NZDUSD has moved between 25 and
45 pips each time. We will not have the Live Trade Room open,
but I wanted to make you aware of this potential trade
opportunity. (…)
Trade Calls for July 11, 2008
TRADE CALL RECAP
Our last live trade call was this past Monday when we were
watching the UK Industrial Production report. We were looking
to short the GBPUSD if the number came out at least 0.5% worse
than expected. The number came out with a -0.7% deviation, so
it met our safe trigger. Our traders reported up to 20 pips of
profit on this particular trade. To see the video of this
trade, click on the link below:
http://www.tradingliveonthenews.com/vid/UKIndProd070708/
OUR NEXT LIVE ON THE NEWS TRADE CALLS
We will have three opportunities for trades tomorrow as we will
have the Canadian job report and the Trade Balance reports from
both Canada and the US. The first release is the Canadian
Labor Change report, which will be released at 7:00 am EDT
tomorrow. This is one of my favorite releases as our safe
trigger is often met and we get some very good moves on this
particular release. The expectation for this report is 6.5k
jobs. A higher than expected number will be good for the CAD
and signal a short on the USD/CAD and EUR/CAD, and a lower than
expected number will be bad for the CAD and signal a long on
the USD/CAD and EUR/CAD. We will be looking for a deviation of
15k on this report to trigger a safe trade. (…)
Trade Opportunity Tonight / Bank Flow Weekly Recap
TRADE OPPORTUNITY TONIGHT
There is an opportunity to trade tonight when the AUD Labor
Force Employment report is released at 9:30 pm EDT. The
expectation for this release is 10k jobs. We have placed a
safe trigger of 20k jobs for this release. We have
historically seen moves of around 25 to 40 pips when this
release has met the safe deviation. We will not have the Live
Trade Room open for this trade, but I wanted to make you aware
of the opportunity. (…)
Weekly Outlook for Forex from Odom & Frey
This week all eyes are focused on The BOE. Will they follow the lead of the ECB or continue to be the lapdog of the FOMC? We expect the ladder, while wishing for the former as we feel that is the right thing to do. We have a number of other important reports coming out both this week and next. The overall tide against the Dollar continues to put in a bottom and we do feel that continuing to buy dollars on bounces is the overall best place to be. We cannot yet say that the absolute low for the Dollar is in but we suspect that if it is not already in that it is close. (…)
Weekly Outlook for Commodities from Odom & Frey
This week we are seeing signs that some of the froth in commodities may finally be coming out. While we remain long term bulls of the overall commodity sector, we feel at this time that many of the commodities are overbought or in the case of energy, in a bubble. That is not to say that some markets, crude oil in particular, can’t keep going higher. But we expect the overall CRB index to at least begin to consolidate, if not roll over. Bottom line here is that it is time to be defensive as the “easy trend following money” is likely to have passed.
Crude Oil:
Crude oil closed last week near the 145 level but opened this week and almost immediately fell to test 140. Five Dollar moves in crude oil used to be a massive day but now it’s just an average day. We still see signs that we could spike above 150 before topping but we are getting very close to a near term high if we are not already there. Longs need to lock in gains and protect paper profits now. This is not the time to be greedy. We are exiting longs and in some cases even buying puts this week.
Natural Gas:
The break we warned about in last weeks issue looks to be happening this week. The August contract would have to close below 12.50 to signify a break in trend so wait for that before attempting to short. This could just be another dip to buy so those with a high degree of risk tolerance can look to buy this dip with stop and reverse orders below 12.50.
S&P500:
This market is still trying to hold support near the 1250 level. While we may head fake below that level a bit this week, but we still feel that buying this dip is smarter than chasing it lower. We are working stops from 1245 down to 1234 on longs that were taken between 1255-1275. Our target remains at 1325. Again buying dips this year has been harder to stomach, but it has still worked more times than not.
Bonds:
Bonds have continued to rally as stock investors run for cover. We do feel that the short term bounce in bonds is all but over and are now exiting the remaining long 112 and 113 calls we recommended two weeks ago. At the same time we are now looking to buy the September 115 puts. We are buying these puts with a trade weight of 50% of the position that was taken on the long calls two weeks ago. In other words if you went long 10 calls with us two weeks ago we suggest you exit them now if you haven’t already, and then buy 5 Sept. (…)
Live Trade Call for July 7, 2008
TRADE CALL RECAP
Last Friday we were watching the US Non-Farm Payrolls, and we
were looking to short the USDJPY if the number came out at
least 50k worse than expected. The actual deviation was only
2k jobs, so it did not meet our safe trigger and we did not
enter a trade. (…)
Trade Opportunity Tonight / Trade Call for July 3, 2008
TRADE CALL RECAP
Our last live trade call was this morning when we were watching
the US ISM Manufacturing report. This report did not meet our
safe trigger as we were looking for a 2.5 deviation or higher,
and the number came out only 1.7 better than expected. We did
have a few traders get in on a medium trigger and report up to
35 pips of profit. To see the video of this trade, click on
the link below:
http://www.tradingliveonthenews.com/vid/USISM060208/
TRADE OPPORTUNITY TONIGHT
There is an opportunity to trade tonight when the AUD Trade
Balance report is released at 9:30pm EDT. The expectation for
this release is -$900 Million. We have placed a safe trigger
of $500 Million for this release. We have historically seen
moves of around 15 to 30 pips when this release has met the
safe deviation, so you will want to be careful especially if
your broker widens spreads. We will not have the Live Trade
Room open for this trade, but I wanted to make you aware of the
opportunity. (…)
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