Tensions between the ECB and Germany are continuing to escalate, after Mario Draghi suggested that Germans are responsible for a “global savings excess” that has led to ultra low interest rates. “There is a temptation to conclude that since very low rates generate these challenges, they are the problem. But they are not the problem. They are the symptom of an underlying problem, which is insufficient investment demand, across the world, to absorb all the savings available in the economy.”
While some insist that the correlation between oil prices and stocks are starting to decouple, Tom Pearce and his team at Deutsche Bank say it’s not so: “The historical price pattern suggests that the credit market’s sensitivity to oil only diminishes once the oil price rises above $55/bbl – and that the equity market’s strong positive correlation with the oil price only disappears when oil rises above $70/bbl…We are still concerned about the outlook for oil, given that the rebound in global growth momentum appears to be fading, dollar strength remains a risk and oil net speculative positions are already elevated.”
S&P futures are down 0.70% in morning trading
Crude oil futures are up 1.07%
Gold futures are up 0.25%
Bond Futures are up 0.69%
Turnaround Tuesday. How many times do we see the totally opposite of what happened on Monday? S&P were up about 16 points yesterday and today they are trading down 14 points in morning trading. It will be interesting to see if the bears pile on or if the bulls can hold the market up.
Crude oil appears to have peaked at 46.63. Watch the 44 level as support. Currently, crude is trading just above at44.25
Gold is trading above 1300. If you have been reading my post, you know I have been beating the drum on gold. Why? Key2Options program has had gold in State 1. Our program not only tells you the expected move but it also gives you the amount of days the underlying will be in a particular State. In the picture below you can see the green is our expected target and we are close to approaching it. Gold typically spends 41 trading days in State 1. It has spent 50 days thus far, so the move should be ending soon.
To learn more about our proprietary State Modeling and how to use it in your trading, visit us at Key2Options.com
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