Expo Futures & Options Trading Blog

Trade Recommendations for Fri. July 30th

Arman Vahdatinia — Thu, 29 Jul 2010 21:32:30 -0700

Hello All,

We have GDP and Michigan Sentiment being reported tomorrow to close out the week and the month. We should all keep our eye on the dollar as it broke support today and although we may get a retracement we should see lower numbers into early next week. Dollar down, commodity prices up, we'll just have to use wide enough stops to sit through tomorrows reports. The S&P broke below the 1100 mark and I suspect it was to shake out weak long positions, me included. Will look to get back on this trade as I still suspect my 1130 target to come in next week. The Euro rallied on schedule, and my 1.3160 target is in the crosshairs. And the turnaround in crude solidifies my overall analysis as we should be able to breach $80 by Tuesday.

1) Buy Sept Emini S&P at 1083.75, with a 1073.50 stop. Exit 1132. We were stopped out, but given the fact that the risk trade is back on with the Euro and Crude rising, we should get back on this train. Investors were probably weary of holding on into tomorrows report and liquidated their long positions once support cracked. There should be enough volatility after GDP is reported for us to buy in at the lower support and it should take a couple hours for the market to digest the data before beginning a plausible rally. I don't suspect the market will close on the highs, but I'm comfortable holding it over the weekend.

2) Hold Sept. Euro longs, and raise the protective stop to 1.2952. Exit 1.3160. The Euro hit the highest level since May today and 1.30 should be significant enough to hold as support. The Euro-zone economic sentiment rose to the highest level in 2 years in addition to positive numbers from Germany. In hindsight, we can look back and see the dramatic decline we had in the Euro was overdone, as it was overdone with our own stock market at the beginning of this whole mess. I do anticipate another dip down to the mid 1.20s, but wouldn't expect anything lower in the foreseeable future.

3) Hold Sept. Crude oil longs, maintain the protective stop at 77.30. The dollar falling was all this market needed to resume its bullish move. Confirmation of a rally is more evident if we look at the grain charts, and more importantly all ahead of tomorrows GDP. The commodity trade is back on as I suspect we will continue to beat on the dollar just a tad longer.

Best,

Arman Vahdatinia
Futures & Options Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a substantial risk of loss trading futures. Past performance is not necessarily indicative of future results.

Trade Recommendations for Thurs. July 29th

Arman Vahdatinia — Wed, 28 Jul 2010 22:35:59 -0700

Hello All,

1) Hold Sept. Emini S&P longs, using a 1094 stop. Exit 1132. The psychological 1100 resistance level of mid July is now proving to be support at the end of July. Durable goods data released today wasn't the greatest but no technical damage has been done to avert bulls. We have GDP being reported on Friday and would anticipate it to be the proper catalyst to really get this market moving in the right direction.

2) Buy Sept. Crude on a stop at 78.24, with a 77.30 protective stop. Exit above $80. We had a roaring 7million barrel build in crude stocks which definitely came as a surprise while analysts were expecting a draw of 2million, and even more surprising was how well the market held up. We had rallied about $8 this month and have seen a technical pullback this week which I feel is a bear trap. If we can get this market back above $78, then we can give the bulls a reason to come aboard. If my theory is incorrect, then we would probably test the 74.50 region before testing 80 again.

3) Hold Sept. Euro longs, with a 1.2910 stop. Exit 1.3160. The Euro is back above 1.30 and the longer she stays here, the better the chances for another spurt up. GDP on Friday will most likely be bullish for the dollar and would provide us with an exit and a good selling opportunity. Not necessarily trying to top pick, but more so interested in selling calls over the next few days.

Best,

Futures Trading Recommendations for Wed. July 28th

Arman Vahdatinia — Tue, 27 Jul 2010 22:28:23 -0700

Hello All,

The risk trade seems to be back on with improved housing data even amidst lower consumer confidence. The Euro and S&P edged higher yet closed the day practically unchanged, but the fresh interim highs will provide the bulls enough fuel to surge on. The significant moves of the day were the black gold running out of steam below $80 and nosediving along with yellow metal putting in new lows. API data reported this afternoon was somewhat bearish, but we'll have to wait and see what the DOE reports tomorrow given the fact that production was somewhat halted last week with the tropical storm scare. And with gold hitting a fresh 3 month low on option expiration, we will have to wait and see exactly how much damage is done technically or if its simply due to a rollover and strike price gravitation.

1) Buy Sept Emini S&P at 1104, with a 1095.75 stop. Exit 1132. We continue to put in new highs during this earnings season and we actually closed the day practically flat year to date. Double dip fears seem to be nothing but a ploy to attract fresh meat to take to the cleaners. We'll have to keep an eye on the Euro, as she continues to hold stable and rise this trend will continue.

2) Buy Sept Euro at 1.2990, with a 1.2910 stop. Exit 1.3160. She continues to hold strong and the 4th time above 1.30 was the kicker to a fresh new high. One can also make the case that the Euro/Gold trade is continuing to unwind, and I would suspect to see this correlation stall or reverse by Sunday.

3) Crude Oil - Await inventory data, look to possibly buy on a stop around 78.50. API reported a build of 3.1million barrels, however I feel tomorrows DOE data will be the exact opposite and spur a short covering rally. If the risk trade is back on, and the dollar continues to get knocked down, there is no reason for this market to be below $80 at this juncture.

Best,

Arman Vahdatinia
Futures & Options Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a substantial risk of loss trading futures. Past performance is not necessarily indicative of future results.

Trade Recommendations for Tues. July 27th

Arman Vahdatinia — Mon, 26 Jul 2010 21:31:52 -0700

Hello All,

We had a fairly quiet Monday after some positive action from the Asian and European session. Stocks edged higher as most other markets just wavered as trading was fairly light. The main influence of the day was a lower dollar, and although stocks advanced, treasuries mounted a comeback late in the day so it is difficult to tell which market is fading. I would suspect that if we continue to report above average earnings, we will continue with the current trend and the S&P should be poised for 1130. This would coincide with 125-126 on the 30 yr bond, and possibly 1.32 on the Euro. As the European bank stress tests came back fairly optimistic, today was the first day of European trading after the release of the results and it looks as though the risk trade is back on. If this holds true, we should also be able to see the $81 region on crude before we get any type of siginificant pullback for about a week or so. Best buying opportunity across the board seems to be the first week of August for the next big leg up. All in all, after a lackluster day, it looks as though we need more data to really move the markets. The results from the stress test didn't seem to be enough of a catalyst. We have Case Schiller and Consumer Confidence tomorrow, and then Durable Orders and Crude Inventories on Wed. If consumer confidence can't seem to move the markets, then we may be in for a slow week to end the month. Overall, we would like to initiate fresh short option ratios on the Euro, BP, and Crude; so we'll be looking to put some capital to work tomorrow.

Best,

Trade Recommendations for Thurs. July 22nd

Arman Vahdatinia — Wed, 21 Jul 2010 23:05:55 -0700

Hello All,

All eyes were on Helicopter Ben as he stated our economic outlook was 'unusually uncertain'. Without delving into much detail as to what actions the Fed may take to spur economic recovery, the markets had the exact opposite reaction from rumors the day prior. We nailed our short near perfect on the S&P at 1087, and would recommend taking profits at the market (1064). Technically and fundamentally there are too many mixed signals to comprehend. I've attempted to make sense of the cycles, but refuse to make lemonade out of these lemons. When in doubt, I'm out. Although it seems as though the bears have the near-term advantage, my main point of conflict is the fact that treasuries made a new high without confirmation from stocks making a new low. This last happend on July 14th which signaled the intermin top in stocks, but will it be a delayed reaction the 2nd time around as well? If we do get a breakdown in stocks, I would expect the 1046 region to hold on the S&P, which would coincide with a test of the $74-$75 region in Crude oil. If these levels do come in, I'd potentially be a buyer, but would rather sit on the sidelines when the European banks stress test results are revealed.

Best,

Arman Vahdatinia
Futures & Options Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a risk of loss trading futures. Past performance is not indicative of future results.

Trade Recommendations for Wed. July 21st

Arman Vahdatinia — Tue, 20 Jul 2010 21:49:35 -0700

Hello All,

Wall Street staged a comeback after an early dip in anticipation of good earnings from Apple and speculation of changes in monetary policy on excess bank reserves, reducing the interest rate from 0.25% to 0. We initially had a dip in equities as Goldman Sachs reported a big drop in quarterly earnings, along with weak revenues reported from IBM. The rally afterwards was pinned on the surprising rumor in reference to Bernanke's address on Capitol Hill over the next couple of days. As we do not have our next FOMC meeting until the beginning of August, this would be an aggressive move on Bernanke's part portraying his ability to take emergency action between FOMC meetings, but I would have to think it is premature. Many analysts believe that our economic recovery is on track, and given the majority of earnings reported thus far, I would have to agree. The Euro looks like it has put in a temporary high ahead of the stress test results as traders locked in profits on the recent gains. This was the 3rd attempt above 1.30 only to be shot down. We will have to await Fridays news to see if we will attempt one more new high or retrace back to the mid 1.20's. The questionable factor is that if all the banks fair well many will assume that the tests were not realistic, so I would have to assume a slightly negative connotation regardless of the outcome. Crude oil rallied back up to resistance as the August contract went off the board in conjunction with the rally in equities. We have to note that the market is still below resistance, and API only reported a draw of 240k barrels this past week. We'll hang onto our crude shorts as a hedge against a new position on the S&P. See below....

1) Buy Sept. Emini S&P at 1070.25, with a 1064 stop. Exit 1087. Then reverse, Sell Sept Emini S&P at 1087, with a 1096 stop. Exit late Thursday. The market surely held the 1050 support level I had my eye on, but I expected all of todays action to be spread over a few days, so now that we've hit fast-forward we will attempt to play the technical chop amidst the mixed fundamentals.

2) Sept Euro - stand aside.

3) Hold Sept Crude oil shorts from 77.20, move protective stop to 78.35. Exit 75.00. We will have to keep an eye on the dollar overnight as a precursor of support or resistance prior to the DOE report. We will give her some room for an initial spike if we get a less favorable DOE report, but after the fact the market should begin to sell off.

Best,

Arman Vahdatinia
Futures & Options Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a risk of loss trading futures. Past performance is not indicative of future results.

Futures Trading Recommendations for Tues. July 20th

Arman Vahdatinia — Mon, 19 Jul 2010 22:19:01 -0700

Hello All,

We saw a sea of red today across most markets and it became evident that Friday's rallies were for the most part a short squeeze to close out the week. The S&P held fairly steady amidst the weakness in outside markets, so we have to respect that and assume that if we cannot break below 1050 over the next couple of days we should be set to rally back above 1100. This would entail that the retracement we've had in treasuries is a simple bullish correction, but it's too soon to tell. The Euro continues to be relentless ahead of stress test results for the 91 European banks on Friday. Nobody can possibly expect positive results from these tests, but will they actually buy the fact? Investors out, traders in. I would expect to see 1.31 before 1.28, so we'll hold out a tad longer before we sell some call ratios. With respect to crude, the support is more evident as the market is unable to break the 75.50 region. The August contract expires tomorrow, so we'll pull profits and roll to September.

1) Hold Sept. Emini S&P shorts from 1074, lower protective stop to breakeven at 1074. Exit 1052. Look to re-enter based on how she acts around the 1050 level. Although the market took out Friday's low we rebounded most of the day and then withstood another hit from IBM's earnings falling short of forecasts. Downward targets of 1048, then 1043. We still have hundreds of companies left to report earnings over the next few weeks so we will see how transparent the 'slowing' economy is.

2) Sept Euro - Stand aside. The Euro continues to rise ahead of the stress test results as speculators evidently anticipate some decent news that will wane fears of insolvency and that the credit crisis will not worsen. The banks will most definitely need an influx of capital, but people are optimistic that it will be a reasonable amount that the markets can provide.

3) Exit Aug Crude shorts from 77.60 at the market (76.60). Re-enter by selling Sept Crude at 77.20, with a 78.05 stop. Exit Tues afternoon. Look to re-enter after DOE data on Wed. Crude advanced for the second day as the dollar continued to slide and China's purchasing power came into play. Resistance is at 78, support is at 76.40, 75.80, 75.03, and 74.20. A true barometer of our economic recovery, it's possible tomorrows August expiration and API data may be the catalyst to influence all outside markets in this time of uncertainty.

Best,

Arman Vahdatinia
Futures & Options Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a risk of loss trading futures. Past performance is not indicative of future results.

Trade Recommendations for Fri. July 16th

Arman Vahdatinia — Thu, 15 Jul 2010 22:46:43 -0700

Hello All,

Todays economic data certainly overshadowed corporate earnings, as cycles are definitely mixed after todays action. The dollar took a beating on downbeat US manufacturing and inflation data, which inversely supported all the foreign currencies. The foreshadowed economic downturn weighed on crude prices, yet the market was able to muster up a rally into the close. All week we have been battling conflicting signals which show a slowdown in the US economy's recovery on one hand, and strong corporate earnings on the other. The Euro has put in a 2 month high above 1.29, and the risk is shifting from Europe back to the United States. The rise in treasuries signals the possibility of another round of government stimulus in the future, which would entail the beginning of a double dip. I would imagine that we wouldn't get too much of a signal tomorrow, rather more of a possibility of a breakdown come Sunday/Monday.

1) Sell Sept. Emini S&P on a stop at 1074, with a 1087 protective stop. Exit next week. Or Sell Sept Emin S&P at 1106, with a 1114 stop. Exit next week. The market will most likely remain in a congestive pattern in the 1080 region tomorrow as I doubt CPI or Michigan Sentiment will create much of a stir. I don't normally like establishing new positions on Friday's but if a breakdown is imminent we'll want to get on board, and if higher prices ensue we'll consider it a blessing.

2) Sept Euro - stand aside. We were stopped out of our trade from yesterday, and it seems as though the market wants to test the 1.30-1.31 region. The question is whether we will get a pull back, and if so how much. Support now lies at 1.27, but we shouldn't expect that level to be tested until the middle or end of next week. End of the week profit taking may or may not set in, so we'll sit on our hands for this one tomorrow and observe. Ideally I would like to take advantage of call pricing here and implement a ratio credit spread in the next few days.

3) Hold Aug Crude shorts from 77.60, and lower the stop to 78.20. Exit next week. We managed to get aboard this trade almost perfectly, and the end of day rally goes to show this bucking bull doesn't go down without a fight. We'll lower our stop in case we're wrong as this market is poised to test $80 if our stop is taken out. There are too many wildcards during earnings season, but regardless of outside market influences, we have to conjure our trade based on a slowing economy for the time being.

Best,

Arman Vahdatinia
Futures & Options Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a risk of loss trading futures. Past performance is not indicative of future results.

Futures Trading Recommendations for Thurs. July 15

Arman Vahdatinia — Wed, 14 Jul 2010 23:17:21 -0700

Hello All,

We have a number of reports along with earnings due tomorrow as the markets could be all over the place. Oil hit a fresh 2 week high, the Euro hit a 9 week high, and stocks were practically unchanged. The release of the FED minutes raised concerns about the economy, yet Intel's earnings spurred optimism. Oil inventory data showed a draw of 5.1 million barrels which was enough support to finish upward patterns. The Euro almost reached our 1.2820 target, and we can say that the S&P has basically hit our 1100 target. So all in all, patterns to the upside are complete, but given the 8 reports that will release tomorrow, we will attempt to sell higher levels if we can get lucky.

1) Sell SeptEmini S&P at 1106, with a 1114 stop. Hold into next week. At the best, the market may be able to extend 50% of todays range to 1107, which should be safe enough to sell. The odd action of the day was the rally in treasuries, as I would have expected stocks to fall out of bed in an equal fashion. Will stocks be late to the party, or did bonds jump the gun? We'll wait for better confirmation and that may allow for our target to come in.

2) Sell Aug. Crude oil at 77.60, and another at 78.60 if reached, with a 79.30 stop. Exit next week. The initial bullish reaction to the inventory report was easily offset after the Fed minutes were released. The negative outlook on the economy may have been enough to turn this market around. We'll hope to sell closer to the days high, but it's never easy to top-pick. The market has a downward trending channel aligned by the last 3 highs below $80, so we may not get the opportunity to sell higher.

3) Sell Sept.Euro at 1.2820, with a 1.2925 stop. Exit next week. As the Fed lowered the US economic outlook, the Euro strengthened. One can make a case for a simple ABC correction off the 1.19 low on the 6th of June. We rallied 584 pts, retraced 292 pts, then rallied another 584 pts. The currently rally completed a 50% extension of leg A at 1.2768 which completes the ABC pattern. I'm all for stopping out perfect patterns, so we'll try and enter slightly higher with a 62% extension at 1.2837.

We'll keep our finger on the trigger as we may not get the opportunity to sell higher on all 3 markets. Current levels are technically sounds levels to enter swing trades, but we'll try and maximize our risk/reward by holding out for a tad longer.

Best,

Arman Vahdatinia
Futures & Options Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a risk of loss trading futures. Past performance is not indicative of future results.

Trade Recommendations for Tues. July 13th

Arman Vahdatinia — Tue, 13 Jul 2010 00:12:24 -0700

Hello All,

We're back into earnings season and had a nice lift after Alcoa's release. I would expect more positive reactions over the next week before we get back to a bearish tone. Tech companies are at their lowest valuation in 2 decades with their highest level of cash on hand as well. As companies begin to spend, even in a slowing economy, it will naturally create growth. The Euro has fallen from its highest level in 2 months on speculation of the stress test results due to release on the 23rd, which will probably not provide as much detail as many would hope. Crude is trading near a 3-day low as an inverse relation to the dollar as it strengthens, and I'm curious to see if we'll have another big drop in inventories this week. Patterns are not yet complete to the upside for all 3 of these markets, so we'll use tonights/tomorrows pullbacks as buying opportunities.

1) Buy Sept. Emini S&P at 1068, with a 1060 stop. Exit to be determined. First initial exit target is the 1086 region, if that goes then we have a good shot at 1100 before the next major sale sets up. There's always choppy action with earnings, so we'll see what type of fundamentals will be thrown at us day to day.

2) Buy Sept. Euro at 1.2515 and another at 1.2480, with a 1.2430 stop. Exit 1.2820. The exit target may seem a bit far fetched, but I'll have to trust my numbers. Not exactly sure what type of catalyst we'll get for those numbers to manifest, but the energy coincides with my theory for outside markets.

3) Buy Aug. Crude at 73.20, with a 72.30 stop. Exit 77+. We'll hold out for slightly lower numbers than I would like to given API being released tomorrow. Don't necessarily need to be long in the morning, moreso towards the afternoon.

Overall, we'll give the bears some room to play before they tire out. =)

Best regards,

Arman Vahdatinia
Futures & Options Strategist
1-877-338-EXPO [3976] ext. 25
www.ExpoFutures.com

*There is a risk of loss trading futures. Past performance is not indicative of future results.