BBFX Blogger's blog

The SPX 500 sits about 15 point’s higher (screenshot as of 8:00am EST) than Friday’s close (12-02-11). Markets have risen as Merkel and Sarkozy try to come up with a proposal to solve the EU crisis. As this plan unfolds it will have to gain the confidence of the EU leaders. If they fail to come up with a feasible plan, we may see a selloff as investors park their assets in the USD.

-The SPX 500 sits about 16 points higher than yesterday’s close on the S&P 500. Yesterdays light volume was the lowest we have had since last Wednesday, which was the day before Thanksgiving. December is looking to extend its gains as it appears to have formed its low for the month. As eyes shift off of the Super committee’s failure on the debt proposal we now look for positive news out of Europe, which they have become quite good at buying time.

The SPX 500 sits about flat (as of 9:55am EST) after yesterday’s close. With such large gains in less than a week the market may be quiet as we await the release of tomorrow’s NFP report and US Unemployment Rate. The 1,250 area (200 Day Moving Average) was a major technical point back in June, which was finally broken in August after Standard and Poor’s rating agency downgraded the US.

As of 8:00am EST the SPX 500 is up 25 points from last night’s close on the S&P 500. We had ADP come in greater than expectations and an announcement of a “coordinated plan to provide liquidity”. The USD will continue to decline if this equity rally continues. Be sure to watch for any details released by the FED.

The Italian bond auction has pushed equities upwards as “risk-on” trading continues. The SPX 500 sits about 8 points higher than last night’s close (as of 7:45am EST). With a massive rally and off of the November lows, the markets are looking for any reason to push higher. I would remain extremely cautious as equities continue to rally off of soaring Italian bond yields, rating agency threats, and US political deadlock. This trading environment could lead to abrupt reversal as the macro trend still remains in favor of the USD.

The USD gained back all the ground it had lost back in October. The 10,100 area is a major resistance point, which we couldn’t clear last week. If equity markets continue to rally we will see the USD lose ground and the AUD/USD will begin to rally as it tries to break parity. Be sure to watch European bond markets as it could drive market sentiment. Larger trend still remains bullish for the USD, but we could be in for a correction for upcoming December.

The SPX 500 sits about 28 points higher than Fridays close. As US traders come back from Thanksgiving weekend, markets look to open positively resulting in the USD to lose some ground. The Last Friday, (October 28th) is where Novembers decline started. As we approach December and clear the last Friday for November, we now have a large positive candle. If Europe can buy time and sentiment remains bullish, markets may try to end 2011 on a positive note.

Today we should have light volume as many US traders are off the desk for Thanksgiving. The SPX 500 is down over 12 points as of 8:00am EST. The Super Committee has failed to come to an agreement on the US deficit proposal. The thin liquidity may result in volatile price action especially as the Euro zone outlook continues to worsen. Be sure to use proper leverage as whipsaw price action can occur as the USD attempts to break 10,000.

-The AUD/USD was a great currency pair for the carry trade strategy when the Fed had QE2. Since the end of QE2 and the downgrade of the US by Standard & Poor’s the AUD/USD has remained volatile as it has a similar correlation to the SPX 500.

-During the month of September the AUD declined, October it recouped all of its losses, and November it approaches the lows again. This pair could be moved upward if a debt deal is struck by the super committee and if Europe can continue to buy time and fly under the radar.

The SPX 500 sits about 6 points higher than the close on the S&P 500 (as of 7:30am EST). Taking a Fib retracement from the 2011 high to the 2011 low, we sit slightly above the 38.2% retracement. This area could play out to be a support level prior to Prelim GDP at 8:30am EST. If the SPX 500 continues to gain ground until the FOMC Meeting Minutes at 2:00pm EST, we could possibly see risk come off quickly as we approach Thanksgiving as US markets are closed.Trading in these conditions can be extremely volatile, be sure to use proper leverage.