MKT AM REPORT 02202007

Having just closed my trades, now let’s talk about AM MKT.

As said in my previous post, mkt is still enjoying its good mood from BEN. Not much profit taking in bond, TNX is actually now lower than its yesterday’s close.  USD and commodity is not changing much, except oil is down >$1 to $57.50, gold is down >12 to $660. Gold moves quite often in sync with oil, but it is more of  a watch dog on inflation and USD. Gold actually did pretty well this year, bouncing off $610 & managed to surpass $670, and reversed recently.  Looking at MACD, the rising momentum seems disappearing, and likely gold will test its 50 day MA of 640.

So Ben’s testimony had quite a bang on mkt, still reverberating.

That said, mkt, particularly stock mkt is definitely technically over-bought short-term, and bears tried pretty hard this morning pushing mkt down, at least for a profit taking, without success, both in stock and bonds. I guess today is over for bears.

Trading wise, it was opportunistic this AM when bears are on move. Now they are gone, I am done for today as well.

Tomorrow mkt will have some substantial info to chew, mainly Japanese CB’s rate move, US CPI, FOMC minutes. Of all those info, Japanese’s rate move is more important, on Yen, carry-trade, and expectations on other CB’s rate policy. Of course, as always, bears and bulls, and other mkt participants in between all have their own views all over the entire spectrum.    

For traders, there is no right or wrong.  They want to guess what will prevail. To do a good guess, a trader has to really understand the views of both bears and bulls, and that is his  home work in FA.