MidSession Review 12/07/12

July 12, 2012 7:34 AM

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

The news: the Eur/$ cross is nosediving, while we writing is down 0.35% to 1.2189$, at 2 years low versus the greenback.

Looking at the big pictures:

DJ Eurostoxx50 Sept Future: down 0.85% to 2221
Dax Sept Future: down 0.98% to 6388
Italian Ftsemib future: down 1.63% to 13.655
Italian yields up 0.98% to 5.87
Spanish yields up 1.66% to 6.686

At this point you could think about terrible macro readings in Europe, absolutely not.

Euro Industrial Production came in at 0.6% MoM vs -0.1% expected, the Italian government sold 7.5 billion Euro worth of 12-moths Bot at 2.697% average yield, previous auction average yield was 3.972%, with a bid to cover ratio of 1.55.

So, What's going on?

This is the way the market express itself, it's asking unconventional measures to tackle an “unconventional” crisis. Index futures are telling us that politicians are running out of time. In Eurostoxx terms we are just 50 index points away from the EU-Summit level, we lost already 100 index points since the 3rd of July, if the market will not be able to recover the highs that followed the 29th of June meeting, a selling spiral will be in place that will bring the market on its knees.

US markets don't look good neither with S&P down 0.77% to 1325.75 and Nasdaq down 0.66% to 2544.25. In an hour time Jobless' number will be released, it looks like there is not much hope in the market at the moment on a better outcome.

We will see, but now the picture looks red.

For what it may concern our daily game plan:

we entered few trades around the 227 level , mainly trading the long side and due to the morning volatility we were able to end up on the flat line.

We got half session ahead to see if we will be able to make our living today.

Have a nice one.

Originally posted at www.77sigmatrading.com