Lower Opening, Backing Into The Fed
Markets are set to open lower this morning. Currently, DJI futures are
trading 115 points lower, S&P 500 futures are trading 13.00 lower, and
Nasdaq 100 futures are about 10.50 points lower. The U.S. Airways bankruptcy,
SSB cutting earnings estimates on Intel
PowerRating), a Wal-Mart downgrade, and
weakness overseas are all contributing factors.
In Europe, the FTSE 100 is down 92.50 points, or 2.14%, the DAX is down 105.77
points, or 2.81%, and the CAC 40 is down 87.92 points, or 2.55%. In Asia, the
Nikkei dropped 251.97 points, or 2.52%, while the Hang Seng fell 54.14
points, or .54%. Interest rate futures are trading higher, while crude is
slightly lower. The dollar is sharply lower against both gold and the major
It looks as though it is starting to dawn on investors that the Fed will
probably not lower rates, although I wouldn’t rule out anything from "Easy
Al" and his magical printing press. It would be a smart move by the Fed NOT
to lower rates now, so they could continue to dangle that carrot in front of the
markets whenever anything got rough. Banks should back off a bit today after the
frantic short covering they have seen. Continue to work the calendar spread
Volatility continued lower Friday, with the VIX losing .43 to 39.36,
the VXN falling .65 to 58.70, and the QQV dropping 1.03 to 49.15. Vol should get
a boost today and tomorrow pre-Fed, probably a great shorting opportunity for
you vol players. We will look to set up some more ratio call spreads if the
market backs off and vol gets pumped in the next 1.5 days.
Trade Updates (8/09/02)
New Actions (New Recommendations)
Working Orders (Old Recommendations)
Recap of open trades
Call Spread Positions
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