Forex Blog

November 25, 2011

Forex Market Outlook 11/25/11

Filed under: Forex News — Tags: , , , , , , , , , , , , , , — admin @ 6:56 am

I hope everyone here in the US had a great Thanksgiving yesterday, though the same can’t be said for the markets.  We are still in risk aversion mode as the Euro debt crisis continues to plague the global economy so the US dollar has been the favored investment vehicle of choice.

Today is a shortened session here in the US with the stock market open for a half-day session.  There is likely to be little action for stocks so the correlative effects of market movements will be minimal.  However, it must be noted that with decreased volume there is sometimes increased volatility.

While there is no news due out for the US session, a quick recap of this morning’s news shows that confidence figures in the Euro zone came in worse than expected.  While this is not surprising, yesterday’s reports of German GDP and confidence figures were positive.  GDP in Germany was 2.5% YoY, as expected.  IFO confidence figures all cam e in better than expected which shows that Germany is still moving along, despite the bond auction disaster from earlier this week,

In the UK, GDP figures also came in as expected, showing .5% growth which is not a great figure.  It is for this reason that the BOE has been ultra-accommodative despite the high inflation they are experiencing. 

Also in the Euro zone, Portugal had their credit rating reduced to junk status, and they have been all but an afterthought as the markets have focused on the Spanish banks and Italy’s government debt.

The picture continues to worsen in the Euro zone and the push for a Euro bond is picking up traction, for those who still want to see the Euro succeed.  As this situation drags out, the global economy will continue to suffer and a solution will not be forthcoming overnight.

But we are seeing a bit of a morning bounce here as perhaps some of the selling was overblown.  Risk still remains at heightened levels so I’m going to continue with the short-term trading themes until more clarity emerges.

November 23, 2011

Forex Market Outlook 11/23/11

Filed under: Forex News — Tags: , , , , , , , — admin @ 6:32 am

Well there’s not much to be thankful for, economically speaking, ahead of tomorrow’s Thanksgiving holiday here in the US.  Markets and banks will be closed tomorrow, and Friday will be a half-session, though the forex market will continue to trade, albeit on lighter volume during the US session.  So if investors have fears about the global economy or markets in general, now would be a decent time to take some money off of the table.

And that’s exactly what we are seeing this morning as there is some major risk aversion to start the day and fears have picked up, primarily on two major developments.  Global stocks and commodities are down to start the day ahead of the increased docket of data releases due out here in the US.

The first bit of bad news came out of China overnight when they reported manufacturing PMI that came in with a 32-month low of 48.  Last month’s reading was at 51 and could be a major sign that the global economy is indeed slowing.

The second piece of news came out of Germany, who had a poor showing on a 10-year bund auction which failed to get bids for some 35% of the offering, which sent yields higher for Germany.  While they are blaming some sort of technical glitch, the reality is that investors did not step up to the plate to purchase German debt which could have happened for a few reasons.  This is being dubbed a “disaster” by market pundits.

First, investors may be trying to lighten the load on the Euro zone region in general.  Second, they may feel they already have enough exposure to Germany via their stake in the ECB and all of the other Euro zone debt which they are essentially on the hook for a big portion of; lastly, investors may be sending a message to Germany that they will hold out in protest unless Germany steps up to back the ECB in further asset purchases or re-considers the Euro-bond solution to the debt crisis.

Whatever the reasoning, global markets are sending a message to Germany that they won’t buy their debt (at the lower rates of course) unless they will increase their participation in the rescue programs.

In addition to this, Euro zone industrial production figures came in way worse than expected, though various PMI figures were mixed.   This takes the wind out of the sails of yesterday’s news that the IMF was expanding a lending facility to the Euro zone and that the Fed meeting minutes showed a readiness to expand monetary policy yet again, causing a late-morning rally.

This morning is action packed here in the US on the data front, as essentially 3 days worth of data is being released this morning.  In a situation such as this, it is usually best to step aside for a few minutes and let the markets figure out what the aggregate sentiment is based on the data.

So here is the laundry list of what will be released later this morning:  Durable goods orders, Personal income, Personal spending, Initial jobless claims, and U Michigan confidence figures.  Usually this data would play out over the next three days but has all been jammed into today because of the Thanksgiving holiday.

In other news, the BOE released the minutes from their rate policy meeting and were unanimous for the first time in a while with their decision to maintain the current policy, though some noted that they would be willing to become more accommodative should a fall-out from Europe happen.  They expect that somehow inflation is going to magically fall to below their 2% target by the end of next year from the current 5%.  Good luck with that one!

Tomorrow’s release of GDP in the UK is expected to show a paltry .5% growth and may change some tunes at the BOE, but my guess is that like most of the economic data we have been seeing from the UK will surprise to the upside, allowing for a break from further easing for a while.  Tomorrow will also bring the release of German GDP figures as well.

So again, it’s not a pretty picture going into essentially what is a long weekend here in the US and the fear out-trumps the risk at this point.  Should we make it through the weekend with no further “problems”, then next week could be risk on again.

As for now, I am going to enjoy the Thanksgiving holiday with family as I still have some things to be thankful for.  Although the global economy is offering little hope at this point, things could definitely be worse!  I’ll be back on Friday with a recap.

Happy Thanksgiving!

November 16, 2011

Forex Market Outlook 11/16/11

Filed under: Forex News — Tags: , , , , , , , , , — admin @ 7:20 am

Buy the dips and sell the rips.  That is exactly how one should navigate this forex market as headline risk from the Euro zone is countered by the US need for stock prices to go higher.  So the market action of late has been selling in the Euro session and buying in the US.

This has obviously left trend-traders and longer-term investors scratching their heads as there has been great range-bound volatility with no longer-term patterns emerging.  In short, take what the market gives you.

What we received overnight out of the UK was more of the same, as the BOE inflation report suggested that further stimulus was needed to ward off the effects of a Euro zone recession and that inflation would be back under 2%– in 2 years time!  What will happen in those two long years is anyone’s guess but it should be noted that they reported 5% headline inflation just yesterday.

And also speaking of inflation, the Euro zone reported in-line CPI data with the headline figure at 3% and the core figure of 1.6%, as was expected.

In the US, the headline figure came in lower than expected at 3.5% vs. an expected 3.7% and the core figure was expected at 2.1%.  Yet here we are with oil prices back up above $100 (see chart of the day) and all the talk is that we are facing further recession.

Inflation is coming folks despite Central bank efforts to help economic recovery.  Stagflation is actually more likely and is exactly what the UK is experiencing right now.  The unemployment rate in the UK ticked higher to 8.3% vs. an expected 8.2% as only 5300 jobs were added vs. a pipe-dream hoped for expectation of 21K.

Let’s remember, these data points are backward looking and do not forecast the future, so in the grand scheme of things they are pretty immaterial other than talking points that allow Central bankers to point their policies as not being destructive.  One does not need to be a rocket scientist to know that as oil prices go, so goes everything else as the cost to produce and transport are greatly impacted by energy costs.

Perhaps its time to throw another $500 billion at failed solar companies to relieve the pain?  But seriously, the problem is the Fed and cheap money policy trying to offset the disaster that is fiscal policy here in the US.  Every day the news that the super-committee may fail becomes louder and louder thereby making their failure a foregone conclusion.

Meanwhile, don’t think that I’m going to ignore the European crisis that is now spreading to the banks that own a lot of this bogus sovereign debt.  The bond vigilantes are in full-force as I mentioned yesterday and are selling out of this junk causing yields to rise and making financing costs nearly impossible to service.

The failure of the ECB to step in as the buyer of last resort and their daily attempts at meekly purchasing some of the Italian and Spanish debt are pathetic at best.  If they want the Euro zone to continue, they need to make a forceful statement that they will step in and buy to provide confidence to otherwise fearful market.

The new governments in both Greece and Italy face political challenges and it will be interesting to see if they can garner enough support to enact the measures that are necessary to save themselves. 

In other words, just another ordinary day in the forex market!

November 4, 2011

Forex Market Outlook 11/4/11

Filed under: Forex News — Tags: , , , , , , , , , , — admin @ 7:01 am

Today is “jobs Friday” as we are awaiting the Non-Farm Payrolls report which is expected to show that the economy added 100K jobs, 125K in the private sector and the unemployment rate to remain steady at 9.1%.  These are hardly attractive numbers, yet anything remotely close to these will be seen as positive by the markets. 

What might be a decent (but unfortunate) prognostication of our jobs figures is the Canadian employment report that came out earlier this morning.  Canada produced dismal numbers, showing that they lost 54K jobs when they were expected to have added 15K, and the unemployment rate moved higher to 7.3% vs. an expected 7.1%.  This is certainly not good at a time when global recession fears are increasing.  Take a look at the chart of the day to see how the market reacted to the Loonie.

The only positive about “jobs Friday” is that it momentarily takes our attention away from the Euro zone debacle.  Yesterday as I noted in an update, new ECB chief Draghi reduced interest rates by 25bp in his first official act, preferring to battle economic woes through rate policy rather than quantitative easing.

However it was his speech following the announcement that caused the Euro to tank as he said that the Euro was definitely facing a “mild recession” which could be construed that he sees big problems on the horizon.  This assertion could be confirmed by the release of Euro zone PMI figures that all came in lower than expected.  In addition Germany, the stalwart economy of the Euro zone, showed that factory orders fell 4.3% vs. an expectation of a gain of .1%.  This pushed the YoY figure down to 2.4% from an expected 7.5%.  That’s a pretty big miss.

This sentiment is also not lost on the RBA in Australia, who just reduced their growth targets after lowering interest rates earlier this week.

While the economic landscape may be deteriorating, the G-20 is doing its part to hold things together.  The undressing of Papandreou caused him to back away from the referendum on the debt deal, but he and his government still face the confidence vote later today.  There is all kinds of speculation about what may occur, from his resignation regardless of vote to a new transitory coalition being formed.

One thing though that is certain after all of this political quagmire:  Greece does not want to leave the Euro zone.  While I have been calling his moves “idiotic” over the past few days, they may turn out to be pretty shrewd after all is said and done.  While the game of chicken he played was rather crazy, he essentially is making Greeks decide what it is they really want.  While no one over there likes the austerity that is required to remain in the Euro zone, the alternative is far worse.  It probably would have been better though had he given EU leaders advance notice of his intentions.

**Update**  Non-Farm Payrolls just came in showing a gain of 80K, 104K in the private sector but the unemployment rate ticked lower to 9%.  The market is reacting somewhat favorably to these figures as I mentioned that it just needed to be close this morning.  Whether or not this is enough to sustain a rally into the close is another story entirely.

For it may be difficult to take risk into the weekend ahead of the Greek confidence vote as the scenario is unlikely and even if Papandreou wins, there’s no telling what may happen over the weekend, including his resignation.

With a recent weak Dollar and interest rate reductions around the globe, inflation fears are starting to increase.  Gold shot up yesterday on the Euro rate reduction and may be invoking some of its inflationary hedge properties rather than its risk vehicle status.

With the overhang of risk in the markets emanating from both the Euro debt crisis and the US debt debate, my opinion is that markets are trading lower on fear alone.  With the flush of cash moving around the globe, we would be a lot higher if not for these crises. 

The US debt commission has largely escaped notice but lets not forget that they have a dead-line of roughly two weeks to get a deal done and if they can’t come to an agreement, automatic cuts kick in and another potential credit downgrade could be forthcoming. 

So my bias is definitely to the upside, though I will proceed cautiously as one never knows what politicians may do.  If you don’t believe me, look no further than Greece.

November 2, 2011

Forex Market Outlook 11/2/11

Filed under: Forex News — Tags: , , , , , , , , — admin @ 7:12 am

How does one get invited to that ultra-ritzy resort town of Cannes, France?  Apparently by upsetting G-20 leaders as you potentially re-neg on a deal that may be the most important economic event of the past year.  Yet that’s where Greek PM Papandreou will be as he has been “summoned” to the G-20 meeting to explain what the heck is going on in Greece.

For the record, Greece is not part of the G-20 so his presence is unwelcome to say the least.  Both European and G-20 leaders have been blind-sided by the referendum vote in Greece and it has the potential to derail all of the wheeling and dealing that has taken place over the last month as the Euro debt resolution was announced.  Picture this—say you owe a lot of money and your creditor agrees to reduce the amount you owe by 50%. What to you do?  You take it of course and say ‘thank you’.  What you don’t do is say let me get back to you.

Yet that’s exactly what Greece has done, which is essentially a slap in the face to Euro zone leaders and by proxy, the rest of the world.  If Greece does not back away from this action or mitigate its impact, then the rest of the world may suffer.  Don’t be surprised if this referendum turns into an “opinion poll” which has little consequence.  Yet this may go down as one of the biggest idiotic blunders in the history of geo-politics.

Despite this SNAFU, the markets are up-beat to start the day as anticipation of today’s FOMC meeting may give markets hope that there is more free money on the horizon.  It is unlikely to produce any change to policy, as the last change dubbed “Operation Twist” hasn’t had enough time to work.  But, Bernanke may officially open the door for QE3 if he deems the economic environment to be worsening.  So far, the Fed has been way behind the curve and their economic forecasts and estimates have largely missed the mark.  This can be problematic when you consider that they use these estimates to make policy. 

In the meantime, economic data is trickling in and is mixed.  In Germany, PMI manufacturing figures came in better than expected, but the unemployment rate ticked higher to 7% from an expected 6.9%.  Italian PMI figures were a lot worse than expected.

Tomorrow the ECB is having its first rate policy meeting with their new chief Draghi at the helm.  Will this produce a change of policy?  Market expectations are that there will be no change, but if they fear a weakening they could be prompted to cut rates.  This is one of those times that a rate cut might make sense, so I’m a bit surprised more people aren’t talking about it.  A rate reduction in Australia just took place, so we could begin to see the start of some ratcheting down. 

But the most important data to round out the rest of the week is on unemployment figures, with New Zealand reporting later tonight and Canada reporting on Friday.  Today marks the first day of the US employment reports with Friday’s Non-Farm Payrolls report being the most important of the bunch.

This morning, the Challenger jobs cuts figures came in better than expected, as did the ADP employment change figures.  The ADP report shows private payrolls changes and today’s report of 110K net new jobs was better than the expected 100K.

However, one cannot make a direct correlation between today’s ADP number and Friday’s NFP.  Friday’s figure is the official government report and takes into account both government and private payrolls.  So it will be interesting to see what that figure is, as it is one of the most significant economic barometers we have.  Expectations are for a gain of 95K with unemployment rate to remain stubbornly high at 9.1%.

For now, the markets are content to drift higher and hope for some Fed love later today and are also hopeful that the G-20 summons for the Greek PM will remove the uncertainty surrounding the deal.  Should Bernanke fail to produce or should the G-20 fail to change Greece’s intended course of action, then we could slip back into risk aversion mode in a heartbeat.

As a result of these uncertain prospects, I am content to keep the trading to short-term and am not looking for the home-run trade. 

November 1, 2011

Forex Market Outlook 11/1/11

Filed under: Forex News — Tags: , , , , , , , , , , , , , — admin @ 7:13 am

Do you remember last week when I said that with regard to the Euro debt crisis resolution, the devil is in the details?   Well it looks like that prognostication was prescient as new information is coming to light.  At the time I noted that while the plan sounded good, how they would actually enact it would be more important.  Now there is sentiment that the process could be derailed as unforeseen issues are starting to materialize.

Case in point; in Greece yesterday the government announced that they would be putting the debt deal to referendum and would be holding a confidence vote for Parliament.  This is dangerous for two reasons, as for starters this unpopular deal could be unwound by a public vote and then secondly, the majority who voted for it could be replaced by those who are against it thereby rendering it ineffective.   While this is a nice idea by the government to be democratic, it is very bad for the markets as now there is increased uncertainty about the deal.  If politicians put every unpopular decision to referendum, nothing would ever get accomplished.

The second potentially disruptive news from the Euro debt deal is that China is publicly stating that they will not bail out Europe so their participation in the expanded EFSF and the SPV may be limited which would reduce the firepower the Europeans thought they had.  This is not a good thing as bond yields continue to rise, most notably in Italy.

Speaking of China, they reported lower than expected PMI manufacturing figures posting a reading of 50.4 vs. an expected 51.8.  This could mean that China is slowing and if they continue to slow, where will global growth come from?

This feeling was not lost in Australia, as the RBA took action by lowering interest rates by 25 bp citing, you guessed it, slowing global growth and a reduced outlook for inflation.  Australia has a keen insight as to the health of China as China is the largest importer of Australian raw materials so the Aussies get a little bit of an advance warning.

However growth is not slowing everywhere as in the UK, GDP figures came in better than expected posting a gain of .5% for the quarter vs. an expectation of .3%.  While this is definitely not robust growth by any means, the repairing of the UK balance sheet through government austerity may be better in the long run.  PMI figures however came in lower than expected posting a reading of 47.4 vs. an expected 50 with index of services lower as well.

So there is massive risk aversion taking place in the market in a continuation of yesterday’s afternoon sell-off.   Stocks are down around the globe, with the German index off some 4%.  US stocks are set to open markedly lower, and commodities are selling off as well with gold crashing through $1700 and oil retreating below $90.

Japanese yen intervention appears to have had little effect vs. the Euro as it is trading back to pre-intervention levels, though it is maintaining weakness vs. USD just above 78.

US ISM manufacturing figures are due out later this morning though they are unlikely to produce enough gains to reverse this market. 

Today’s selling may make tomorrow’s FOMC meeting interesting as Bernanke yet again attempts to jaw-bone markets higher with his free-money pump.  But will it work this time?  Is the hint of QE3 enough to overcome all of the global turmoil and slowing growth? 

At some point, Bernanke’s rhetoric is going to backfire horribly and it is just a matter of time before the markets realize that free money isn’t the answer.  The global economy is in jeopardy of a major slowdown and every threat of this occurring send the market spiraling lower.

The Euro debt crisis resolution was supposed to calm the markets, not inflame them further so someone needs to tell Greece to get their act together.  Will Bernanke save the day tomorrow or exacerbate the crisis further? 

Stay tuned!

September 22, 2011

Forex Market Outlook 9/22/11

Filed under: Forex News — Tags: , , , , , , , , , , , — admin @ 7:13 am

The markets have been tanking for the last 18 hours as Bernanke unleashed “Operation Twist” on the marketplace.  Perhaps this should be called “Operation Disaster”.  What he has essentially done is tanked markets in the short-term in favor of potential longer-term gains.  With the Euro debt crisis worsening every day, the timing is less than ideal.

The last time this obscure policy measure was used was in the early 1960’s and though the intended effects are happening—to lower yields on longer-term maturities—the immediate impact has not been well-received by the markets.  At some point all of this Fed tinkering and tweaking is bound to produce a problem and yesterday’s move may be it.

Since yesterday’s announcement, the Euro has fallen nearly 4 cents, or 400 pips in forex parlance.  The Aussie has experienced a similar move and is now trading under parity with USD to .98.  If you follow our “chart of the day” section below, I also called the move on the Loonie and Pound from the last two days.  Monday’s short call on EUR/USD is still in play with a longer-term target of 1.30.

Global stock markets are also retreating, with the Dow Futures off 200+ points today after selling off over 250 points yesterday.  Asian markets were down overnight in the 2-4% range, and European stock markets are down close to 5% across the board.  Oil is also lower to an 81 handle, and gold is off $75 to around $1730. 

So if the twist was intended to induce US Dollar weakness, it is failing miserably and the correlative effects of a strong dollar is taking world markets lower.  I’m sure Bernanke’s intention is to get people out of bonds and into stocks, commodities, and possibly housing to encourage inflation, but in the near-term this has backfired.  Risk aversion has picked up to the point where this policy mistake may not be reversible.

This brings us back to the Euro zone, which is still under pressure to figure out the debt crisis.  The Greece situation is becoming more and more unsustainable as time goes on and a potential default could send world markets spiraling lower out of control.

Lower manufacturing in both China and Europe (for the first time in 2 years) reflect a slowing global economy, but the debt crisis in Europe and the threat of contagion from Greece to other countries is a ticking time-bomb.

Politicians both in Europe and in the US are way out of their depth and lack the ability to make the tough choices necessary to right the ship.  The last few years of extend and pretend has finally come home to roost and the lack of action has brought us to this uncomfortable place.

US initial jobless claims rose slightly but that was to be expected, and at this point there is no economic data that can paint a rosy enough picture to induce risk-taking.  So markets may continue to fall, though where that bottom may be is anyone’s guess.  In the long-term “Operation Twist” should be US dollar negative and eventually money will have to go somewhere, most likely to dividend paying stocks as yields there improve with lower prices.  Or perhaps Bernanke will embark on more quantitative easing.  One of the things to note about the “Twist” is that it did nothing to expand the money supply, but rather just re-shuffled the Fed’s holdings.

And this also does nothing for Main St. here in the US as confidence is near all-time lows and improvement is nowhere in sight.  Until the Fed gets some help form the fiscal side of the ledger, they may be all out of bullets and further action is losing its effectiveness.

These are uncertain times right now and the uncertainty causes fear, which in turn causes risk aversion.  The pressure is on global leaders to find credible solutions to the global economic downturn otherwise we may continue to slide toward further recession or possibly depression. 

Until these solutions emerge in Europe with the debt crisis and in the US with the economy in general, the trend will remain to the downside.  Perhaps a bottoming out process is necessary to get things moving again, but the pain experienced along the way may cause irreparable harm. 

There is ample opportunity in the forex market to take advantage of this volatility, but don’t get caught in losing positions! 

September 14, 2011

September 7, 2011

Forex Market Outlook 9/7/11

Filed under: Forex News — Tags: , , , , , , , , , — admin @ 7:42 am

Well it looks like the Euro has navigated one of the potholes that was causing anxiety in the market as the courts in Germany ruled that indeed Germany could participate in the bailouts of the periphery countries.  While this means that Euro lives to fight another day, it does not change the overall problems that plague it from a debt perspective.

Tomorrow will bring the ECB interest rate decision and I can’t imagine a scenario that would be positive for the Euro from an interest rate perspective.  Having raised interest rates recently, it would look foolish to embark on some sort of quantitative easing program.  But the Euro problems are isolated in so far as there are specific countries that need different measures, so it is hard to make policy that will benefit all.

Tomorrow will also bring the BOE rate decision in the UK, though there is no expectation for a change of policy.  However, lower home price figures and declining industrial production figures show that the UK economy is contracting and it remains uncertain if the BOE will be more accommodative to reverse those trends.  My feeling is that CPI will need to come back some before that any further easing can take place.

In the overnight session, the BOJ kept interest rates unchanged and made no major policy decisions.  This is no surprise to anyone.

Later this morning the Bank of Canada will release its interest rate decision which is also expected to produce no change.

So the market is in risk-taking mode this morning, with stocks and oil higher, and gold selling off significantly after the Euro hurdle has been cleared.  US stocks rebounded yesterday from lows off of the Euro debt crisis and had “respectable” losses. 

The market ranges have been expanding of late so this is an opportune time for the shorter-term traders to have some fun.  If you are a longer-term player, it is probably advisable to wait and see how things play out.

August 9, 2011

Forex Outlook 8/9/11

Filed under: Forex News — Tags: , , , , , , , , — admin @ 8:07 am

The markets appear to be “stabilizing” for the time being after yesterday’s massive sell-off, the 6th largest down move for stocks in the history of the markets.  Oil has pulled back as well, though gold is sky-rocketing to new daily highs, reaching just under $1780.

There is obvious fear in the marketplace, and what started out as debt concerns both here in the US has become global economic growth concerns.  So right now, the market is unsure who poses the bigger the risk, the US or the Euro zone.  This is reflected in the currency values, as EUR/USD has been trading a range with no clear direction. 

This is in stark contrast to the commodity currencies, which have sold-off greatly lead by the Aussie which is down close to 10% for the week!  On the flip side, the safe havens have received these money flows, with the Swiss franc making new all-time highs vs. Euro and USD.  The Japanese yen is also strengthening despite the attempt to weaken the currency through intervention last week.

The British pound is also trading a range as their economic data weakens and also dealing with the “protests” taking place in London right now.  I’m not sure that the media is giving this the proper attention it deserves, but looting and rioting are taking place as a single incident has ignited the anger over austerity measures.

One of the last bastions of growth in the global economy has been China, and overnight their CPI data came in higher than expected showing inflation of 6.5% which means that they may make further efforts to slow down their economy.  Talk of the global “double-dip” is starting to heat up, as it appears that the soft patch we were dismissing the data as may become a harsh reality.

So it’s the Fed or nothing today, as all eyes are on the FOMC meeting taking place today.  What, if anything, can the Fed do at this point?  Bernanke will clearly attempt to calm fears in the market but at this point it may be difficult to provide the magic pill that everyone so desires.  Instead, the medicine we may be forced to take is a much tougher pill to swallow.

The global banking system while not in great shape is clearly better than in 2008, though European bank exposure to sovereign debt and US bank exposure to a still-declining housing market may make it difficult to bring confidence back.  Money pours into US Treasuries, as it is not certain where to go.

So how do we get out of this mess?  It all comes back to economic growth.  Without it we are doomed and those who think the government can pick up the slack are delusional.  Without job creation form private business, demand will continue to weaken.

So while stocks may be higher to start the morning, do not be fooled into believing a bottom is in.  This saga is far from over, and thankfully politicians are on vacation for the rest of the month so I don’t have to listen to the blame game take place. 

Be cautious and judicious in your trading and use strict risk management principles.  Volatility can be your friend, though it can also be your greatest enemy!

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