Friday, July 11, 2008

Another Day of Confusion

Is it safe to come out yet ?

Confusion, that is my take on the markets. Crude jumps $5 a barrel in minutes, the dollar reverses course and stocks are up and down like a roller coaster.

Crude. I heard everything from "technicals" to "Buying Programs", but I think the real reason was Iran continuing its "War Games". Firing off long range missiles in defiance of U.N. objection.

OPEC Secretary-General Abdalla El-Badri said at a press conference in Vienna yesterday that he hoped there would be no military conflict between Israel and Iran, adding that ``if something were to happen, it is impossible to replace the production of Iran.''

With statements like this any "saber rattling" will cause nervous markets and a
rally in crude.

Stocks. Wow what a day. Financials are clearly leading the show. But a few thoughts here. I think stocks will test 10,000. Why not, it is a big psychological level and the U.S. economy is in bad shape. I do not think we will stay below that level for long but we should test it. Freddie Mac (down 22%) and Lehman (down 12%) certainly didn't help things, but does anyone really think the government is going to let them fail? Not me. Yes they can go down in value, but as long as the Fed window is open to all who need it, failures should not occur.

Dollar. It has no choice but to suffer in this environment. I still think there is a good chance we make new highs in the Euro, but again I think those highs will be short lived.

My predictions have not been great, but I have been fairing OK as Emerging Market currency's are strengthening and there are curves (positive carry) to ride.

I am trying to stay nimble (and out of Euro) as these markets are not easy.

Good Luck and Good Currency Trading.



Blogger FXoldsalt said...

Nice Pic...looks familiar. Tend to agree with most of your observations - feel Euro toppish but wants to have another topside test - look to fade it betweeb 1.5970-1.6020 heavily overbought technicals

10:33 AM  

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