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Monday, June 18, 2012

Market expecting easing from G20, FOMC or ECB

There is a high expectation that tomorrow G20 will announce some kind of liquidity program and if it doesn't happen, then there could some sell off followed by recovery. Then the expectation  will move to Wednesday FOMC meeting outcome. As you know operation twist is getting over at the end of June, so if fed doesn't announce any thing market could be sell off and then expectation would move to Euro zone meeting at the end of June for easing. Again if nothing comes out of meeting, expectation will switch to company earning. So, the trend of sell off and recovery likely to continue till the end of next month. 

Majority of the investor were hoping for sell off or rise in volatility during Greece election but it didn't happened. Infact volatility sold off and stock rallied. If you remember FB IPO was overhyped and stock kept selling off. JPM was expected sell off on Dimon testimony but it rallied. The lesson to be learned from this situation is," Think the opposite of what majority thinks to make money in this casino market."  Anyways in Casino you can never make money.

Trading Strategies For June 19th:
Based on the chart tomorrow, market should open low but since ECB is conducting fine tuning operation, I expect market to open higher.
For Bullish sentiment to continue: Dow needs to break 12781 while S&P500 needs to break 1349. 
For Bearish sentiment to continue:  Dow needs to break 12659 while S&P500 needs to break 1341

In the chart below Red circle represent Bearish sentiment, Blue Circle represent Bullish sentiment.
Dow is expected to open higher because of ECB fine tuning operation.

Chart is bearish for tomorrow, but S&P500 is expected to open higher because of ECB fine tuning operation.

In Forex Currency trading, Eur/Usd closed at 1.257, Usd/Cad closed at 1.023 and Aud/Usd closed at 1.0118 US dollar Currency Index closed at 81.95

CBOE Volatility Index VIX down 13.22% at 18.32

GOLD is at 1628 (+1.60)

SILVER is at 28.73 (+0.059)

Earning Before Market open: BKS. DFS, JEF, FDX, JW.A

Earnings After market Close:ADBE, CWST, CBP, FSII, JBL, LZB, MITL

After hours big gainer:AMRS, ORCL, ICLR, EDMC, NUVA, DAN, ATK, YGE


After hours big loser: TSLA, MDCO, Z, PENN, FSII, JCP, IHS, WES, HCP, BZ, 


Stocks for Option Trading: CAT, XOM, SPY, QQQ, IBM, PCLN, AAPl, WLT, PCX, GOOG, MT.
Upcoming FDA approval  : ONXX and LGND on June 20th.

8:30 amHousing startsMay720,000717,000
10 amJob openingsApril--3.7 mln

Other Event to watch out
8:30 a.m.: Housing starts for May, released by the Commerce Department.

9 a.m.: Federal Reserve’s Federal Open Market Committee begins two-day meeting on interest rates and monetary policy.

9:30 a.m.: J.P. Morgan Chase (US:JPM)  CEO and Chairman Jamie Dimon, and Comptroller of the Currency Thomas Curry, Securities and Exchange Commission Chairman Mary Schapiro, Commodity Futures Trading Commission Chairman Gary Gensler, and Federal Deposit Insurance Corporation Acting Chairman Martin Gruenberg testify on bank supervision and risk management in lift of J.P. Morgan’s recent trading loss, at the House Financial Services Committee.

10 a.m.: Hearing on how to confront the looming fiscal crisis, at the Senate Finance Committee.

10 a.m.: Hearing on EPA air standards for hydraulically fractured natural gas wells and oil and natural gas storage, at the Senate Environment & Public Works subcommittee on Clean Air and Nuclear Safety.

Forex Currency event:

1.    GBP- U.K. CPI- Consumer Price Index, the main measure of inflation preferred by the Bank of England, Tues., Jun. 19, 4:30 am, ET. 

In line with the Bank of England’s forecast, inflationary pressures in the U.K. have been subsiding in recent months and this trend is expected to continue with the consumer price index staying flat at 3.0% y/y in May, same as the 3.0% y/y reading in April. Lower inflation would not be an obstacle to additional easing by the Bank of England. 

2.    EUR- Euro-zone ZEW Economic Sentiment Index, a leading indicator of economic conditions measuring the outlook of financial experts, Tues., Jun. 19, 5:00 am, ET. 

The ZEW institute survey is expected to confirm the deteriorating economic outlook in the euro-area with a larger decline in the economic sentiment index to -5.7 in June compared with -2.4 in the previous month. 

3.    USD- U.S. Housing Starts, a leading indicator of housing market activity measuring construction of new residential properties, Tues., Jun. 19, 8:30 am, ET.

The first of the two housing market reports for the week is not expected to show anything spectacular. Housing starts are forecast to register a small increase to 725K in June from 717K in May.  

Wait till Wednesday FOMC meeting is over and then take appropriate steps.

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