June Swiss Franc Rallied Off Lows
Each evening we focus on the most interesting aspects for the upcoming trading day. The comments are based on observations of the nightly updates of the Futures and Market Bias pages. They are provided for educational purposes only and are not intended to be direct trading advice. Also, keep in mind that these remarks are made up to 12 hours in advance of the markets opening. Therefore, overnight events may alter the outcome of these observations.
At the time this is being published, the S&P Globex Futures are trading 1.40 points lower and the Bond Market Futures are trading up 1 tick.
Over the past several nights, I’ve been talking about the low volatility situation in the June Swiss Franc [SFM9>SFM9]. Today, it rallied off its lows on a widest range of the past 7 trading days. These are the types of moves that are possible as a low volatility situation reverts back to its mean.
There are two markets that look interesting to me tonight.
The June Japanese Yen [JYM9>JYM9], on the Turtle Soup Plus One Buy List, hit 20 day lows today (a) but recovered to close well (b). This may have the shorts trapped on the wrong side of the market. Look for a buying opportunity here.
Source: Omega Research.
Volatility Watch
On a closing basis, June Crude Oil [CLM9>CLM9] has had a gradual rise over the past 4 days. Because historical volatility is a measure of close to close only, this has caused the short term volatility (6 day) to drop below 50% of the long term volatility (100 day). Watch this contract over the next few days for a large move (in either direction) as volatility reverts back to its mean.
Best of luck with your trading on Wednesday!
Dave Landry
PS-Reminder: Protective stops on every trade!