Market Overview

Yen Short Covering: More Room to Run?

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Data today showed orders for U.S. durable goods increased more than forecast in April. Bookings for equipment meant to last at least three years increased 3.3 percent last month after dropping 5.9 percent in March.  The SP 500 is down for a third day in a row.

Equities: The JUN13 emini SP 500 is down 8.5 points to 1641.25. Our key line in the sand for this market is 1651. If the market can stay below 1651, we have a first bearish price target of 1623. We believe the market could continue its correction down to that level shortly. The Nikkei continues its massive tumble, trading down another 580 points today to 14240. It was just at 16000 a few days ago.

Bonds: The US bond futures are quiet today, with the JUN13 10yr trading up 5 points on weak stock market, and the JUN13 US 30yr trading up 13 ticks. We believe even with the stock market downturn recently, the overall trajectory of the bonds is still down, as the Fed may start to lessen their bond purchases later this year.

Commodities: After a sharp end of day rally to above $94, the JUL13 crude oil contract has come back down, and is trading down $.85 to $93.40. We believe this market is headed lower, with a first target of $92, then $88. Gold and silver are very quiet this morning, with gold trading down $6 to $1386. Key grain markets are all down slightly this morning.

Currencies: Both the Euro/Yen and the Euro/Swiss spread have decreased a lot today, with the Euro trading down 13 ticks, while the Yen and Swiss Franc are seeing big rallies. The Yen is now firmly above our key pivot level of 97.60, and we have a technical target on the upside at 100.24 to indicate we believe the short covering in the Yen still has room to run.

Past performance is not necessarily indicative of future results. Trading commodity futures and options is speculative, involves risk of loss, and is not suitable for all investors.

Japanese Yen Chart

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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