Tuesday, September 19, 2006
Here We Go Again
You should have all received your email by now telling you our SPX play for this month. I got filled for a $2.10 credit for my condor.
I will be giving you our RUT play next weekend. As before lets see what the Fed does on Wednesday and then place this trade.
As for the markets, well they have just been going higher. The Dow is near its all time highs.
There are a few reasons for this. Energy prices have been dopping. Oil hit $63 a barrel and is hovering around the $65 mark. Natural gas prices have fallen as well.
With energy prices easing and economic data showing a slowing economy the concern for rising inflation is getting less. This is confirmed by the market which is confident that inflation risks have receded and that the Fed will not be raising rates on Wednesday.
A rise would be a shock and probably send the markets again into freefall. The key issue in my view is where interest rates will be in six months time. Some analysts think there might be as much as another two rises because falling gas prices means consumers have more money to spend in the shops!! Also wages have been increasing far greater than expected which is another inflationary pressure. If the Fed were to believe these two factors might be a problem then it may well hint tomorrow how it will tackle these two concerns in the near future.
My point is their words could still move the market. We have a lot of space in our SPX trade to the downside but I will be monitoring our position carefully over the next few days.......just in case.
Until next time.
I will be giving you our RUT play next weekend. As before lets see what the Fed does on Wednesday and then place this trade.
As for the markets, well they have just been going higher. The Dow is near its all time highs.
There are a few reasons for this. Energy prices have been dopping. Oil hit $63 a barrel and is hovering around the $65 mark. Natural gas prices have fallen as well.
With energy prices easing and economic data showing a slowing economy the concern for rising inflation is getting less. This is confirmed by the market which is confident that inflation risks have receded and that the Fed will not be raising rates on Wednesday.
A rise would be a shock and probably send the markets again into freefall. The key issue in my view is where interest rates will be in six months time. Some analysts think there might be as much as another two rises because falling gas prices means consumers have more money to spend in the shops!! Also wages have been increasing far greater than expected which is another inflationary pressure. If the Fed were to believe these two factors might be a problem then it may well hint tomorrow how it will tackle these two concerns in the near future.
My point is their words could still move the market. We have a lot of space in our SPX trade to the downside but I will be monitoring our position carefully over the next few days.......just in case.
Until next time.
# posted by Paul @ 5:06 AM 
