Friday, August 24, 2012

Macro Notes

  • Sp500 was up premarket 50 basis points then, opened lower at open and never got back in the green, jobless claims rose , but seemed to be a minor data point.
  • Gold continues to rise on expectation of stimulus from Fed, and possible eurobond buying is adding to the liquidity expectations. Oil also continues it's strong upswing. Don't fight the fed. Gold Clears 200DMA
  • What will happen if we don't get the Fed action that is being priced here? What levels are we going to see breakdown in gold and silver? Silver is breaking from it's recent consolidation and looks like it will continue it's upswing, regardless of macro headlines.
  • Reuters article about resources in Australia dropping off is refuted by Swan today. 
  • Euro/USD is a pair to keep a close eye on - we are seeing a clear rebound from the 1.20 lows and have maintained strength in the last few days of consolidation in price action. This is a positive divergence for risk markets.
  • I expect 2-3 days of consolidation, and any price corrections in greater magnitude of 1% or prolonged hanging will probably trigger a sell in my leveraged positions.
  • I closed my LULU shorts last few weeks ago near the 55-56 range - and it's close to the original gap at 65 - this will be a position to watch closely as their earnings will be released soon. Urban Outfitters and American Eagle Apparel both beat expectations - and the fashion clothing sector is definitely heating up - a negative earnings report for LULU this quarter would be a huge shorting opportunity. Using puts prior to earnings release is probably the best way to express the trade.  Will we see the price close the gap?