Bullish Tone Still Intact

Monday, Mar 12, 2012

Good Afternoon,

A late post as I am busy digesting and preparing for the data onslaught!

Let's kick things off with the fundamentals and the highlights are:

**any international news that trumps anything below

**Fed Statement tomorrow - are you tracking what they are saying every 6 weeks? One word missing or added is all it takes to change the fundamental picture

**ECB President tomorrow

**retail sales - the consumer should be continuing to spend, but will the recent spike in gas prices find its way into this report (meaning, this survery period may not capture the bulk of the move up, so let's continue to watch next month's release too...)

**Bernanke on Wednesday

**inflation data on Thursday and Friday - who cares as the Fed is creating it. But, will they tackle this in the statement tomorrow? If so, it could mean strength for the USD.

-manufacturing data on Thursday and Friday - look for subcomponents in the way of new orders and unemployment - are they still as strong as they have been

Remember, the Fed has been telling us the recent strong data will subside at some point. It has started to change a bit in the weekly claims and the manufacturing subcomponents. Will this "backing off" come into play a bit more? If so, does the DOW get toppy?

So the segway into technicals. The SPY is at last week's highs and DOW is approaching last week's highs. Check out the VIX - it made a new low since last week.

Overall, this low VIX and high equity prices make for "slower trading". Meaning you have to be patient to pick your spots and be willing to take quick profits (especially if you are going counter trend).

So with the VIX at new lows and the SPY at old highs, all it takes is good economic data/friendly Bernanke speech to get us to new highs. If you are hedging, be vigilant and use the technical resistance level to exit if we break through to the upside. If you are long, be vigilant and don't get caught in a big downdraft like last week - make sure you are using fundamentals and a technical plan to manage your trades.

In forex, we had a "modified" BUFFALO BOUNCE in the EUR/USD.

Are you mentally ready to create trading plans for each and every trade with appropriate stops and targets? It's like the Yellow Pages: "let the charts do the talking"

Hopefully all of you are looking forward to a fun week of trading opportunities!

Have a great week of trading and listen in on the webinar on Wednesday evening!

https://www1.gotomeeting.com/register/479121553

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.

Posted By: 

Brian Kahn

Brian provides regular commentary focusing on the relationships between various financial markets. An experienced trader and portfolio manager with over 15 years in the markets, Brian relies on fundamental and technical analysis to create trading plans for each and every market entry.