June 17, 2011
New Deal for Greece sends Euro Climbing, Dollar Drops on Quadruple Witching Day
We begin our day with news overnight that French President Sarkozy has a new deal for Greece that is expected to help avoid a financial crisis. This gave new strength to the Euro, which put downward pressure on the US Dollar index, sending it back into the middle of its range.
The US Dollar has been climbing for 10 days in a row and this news send the DX back into the middle of the price wedge you can see below. The dollar in the middle of its range will be a big correlation to other markets today such as Crude Oil, Euro, Gold, and Russell.
The growing concerns in Europe have had a major impact on the demand for Crude Oil, and this morning the CL 07-11 on the 93.00 big round number, and falling crude oil prices will add to inflation pressures on Gold, which continues to trade sideways, kept up by inflation fear, and kept down by the strong US Dollar. It will be interesting to see how this all plays out in the 3rd quarter of 2011.
Let’s look at the day ahead of us…
Today is Quadruple Witching Day, which for most professional traders is a love-hate relationship. We all know this is a necessary part of our trading profession, but we still wish we could skip it and go straight to next week!
Today will be classified as a ‘get in early, get out early’ type of Friday. Most Friday’s are like this, but today we wont expect to see much action after the 10:00am est news here in the US. We will need a VERY good reason to be trading after 1030am this morning.
Looking at the news this morning we have 9:55 Consumer Sentiment and then followed closely by 10:00am Leading Indicators, both will be on the minds of traders this morning and we will hopefully be able to grab some action/volume/opportunity off these two events.
The Reuter’s/University of Michigan’s Consumer sentiment index for May came in at 74.3, well up from a mid-month 72.4 and implying a 76.2 reading over the last two weeks. The second half estimate is based on the full month survey sample being about evenly split between the first half of the month and the latter portion.
