I'm not saying the U.S. economy avoids negative growth just yet, but it is noteworthy that looking at the screen today I see crude trading below $90 a barrel. approximately 10% off its highs, and gold down $10, or approximately 8% off the recent highs. Jack Bouroudjian just pointed out to us that the Dollar continues to stabilize, and the Euro is down over 100 pips on the day as of this writing; granted we still don't know whether that is consolidation -- meaning a pause -- or distribution -- meaning a top for the Euro. There is no doubt in my mind that the overall trends in the greenback and commodities are ominous, and any corrections to date, are still counter-trend. But every trend starts with a counter-trend.
There is an old saying in this business about pessimists not making money on Wall Street, and all we have to do is look at a 100 year chart of stocks to see the validity of that. There is also an old saying in Chicago that says You can't fight City Hall, and for traders City Hall equates to the various central banks, treasuries, and sovereign funds worldwide. And if you're going to trade against these institutionsâ€™ best interests, in my humble opinion, you better be good, and you better be fast, because when the day comes that they can't get their way, when push comes to shove, we will have more important distractions for ourselves and our communities then figuring out which way the markets are going to move next.
If the powers that be at the Fed and Treasury can pull off a turnaround for the Greenback, and the commodities spill-off that will likely follow, despite the coming rate cut, I will be very impressed.
From a trading perspective it's about knowing what's in the best interests of the biggest players. The Fed was going to cut regardless to alleviate financial stresses brought about by the current mortgage and housing situation and the threat to that was what a still lower Dollar could do to crude oil price â€“ think still higher. If they eliminate that threat by getting the allies, I mean trading partners, to cut with them, be it by stealth currency intervention, the U.S. economy has a chance to avoid a recession which is in NO ONEâ€™s interests. Just one man's opinion.
John Jay Norris
Senior Market Strategist
Brewer Futures Group, LLC
200 South Michigan Ave., 21st Floor
Chicago , IL 60604
800-971-2154 Toll Free Number
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