Random Walk Trading.com
Monday
January 26, 2015
1-855-RWT-0008
Prepared by the good people at Random Walk, LLC.
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Closing Prices From Yesterday
Today’s Number(s)
NO NUMBERS TODAY
Yesterday and Today
Yesterday
Humor. It was the most quiet day of the year until 2:00pm eastern. As a matter of fact it ranks up where with one of the most quiet days of last year too. Then at 2:00pm we just started to slip more and more.
TODAY
Falling. The elections in Greece showed Alexis Tsipras as the winner, and as a result the Euro sank like a rock again. You have to know that he is part of what is called Syriza, which is a radical left wing party. They are essentially anti-Germany. He is pledging to renegotiate their debut while asking for more money. It is asking to having a neighbor of yours borrow your lawnmower and refusing to return it, but then coming and asking for your electric edger too.
After Switzerland’s withdrawal from having its Franc pinned to the Euro at 1.20 and now this, there are concerns that the whole Euro Dollar concept will fall apart. This is happening after Draghi pledged $1 trillion in bond purchases throughout Europe. The Euro temporarily fell below e1.11 before bouncing a little and hovering around e1.117. It is probably nothing as politicians always say one thing and markets over react, but it initially has the world a little nervous.
Markets
We can expect Eurozone stocks to fall as the Euro Declines. There will be shifting of money around Europe as well with a flight to quality/safety. Yeilds in Greece will skyrocket while Germany and other countries will likely fall. There will be a flight to the US dollar and US treasuries in an effort to protect capital. People will not care about returns, rather they just don’t want to see their assets diminish in value.
Keep in mind that this is somewhat bad on a geopolitical level. But if you want to think of things selfishly for America, their loss is somewhat a gain. I expect the worst of the US markets selling to be done in early morning on knee-jerk stupidity and our markets taking a Q from how European markets are trading. By the time Europe closes we will hopefully have seen the bottom and bounce hard.
Remember that the falling Euro is hurting their stocks, but we have a rising dollar (as a result) that helps ours. It goes back to the same argument as we saw in oil. People were afraid when oil prices fell 50%, but it is great for everyone other than the people who sell it. This is the same sort of situation. We will fall initially, but once it settles in it is a good thing for the US markets.
What is there not to like. Low oil prices, low interest rates, strong dollar and little inflation. That is rocker fuel for the markets.
POT is held each Wednesday night at 7:00pm eastern.
SCHEDULE
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More on hedging a long vertical spread (going for or against you)
– Using the E-mini options as a hedge against the SPX and/OR a portfolio of stocks to enable a trader to be able to hedge 23.5 hours a day.
Contract the office at 1- 855 – RWT – 0008 for more details.
Too True To Be Funny
I hope he (Moore) chokes to death on one of the gallons of Twinkie filling he ingests every day. I saw the film yesterday and was amazed. I was humbled. I sat as the credits rolled and no one in the theater left during the credits or said a word. Sniper is going to win a lot of academy awards, and Moore is just jealous of anyone with talent. His movies look like a high-school Freshman Media Class project. Hard to hold a conversation and camera with chocolate all over your fingers.
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