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Cliff Wachtel
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Cliff Wachtel, CPA, is currently the Chief Analyst of, a leading binary options broker, and Director of Market Research, New Media and Training for, a fast growing forex and CFD broker. He is also the author of The Sensible Guide To Forex, and publisher of... More
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  • FOREX, COMMODITIES, STOCKS OUTLOOK April 14th: Cliff’s 2 Minute Drill 11:30 GMT 0 comments
    Apr 14, 2010 7:09 AM


    Stocks: Prior day: Asia, Europe, down US up. Today: Asia, Europe up.  Stocks shrug off concerns on Greece with optimism on US earnings season bolstered by Intel’s positive results. We caution that there are still significant ambiguities in the EU deal, though the expanded funding and details are a clear message that the EU is closer to stepping into the breach rather than letting Greece default and risk a wave of defaults and concomitant deflationary relapse into recession.

    .-          FX: Bias against safety currencies [JPY, USD, CHF in order of safety appeal] vs. risk currencies [AUD, NZD, CAD, EUR, GBP in order of risk appetite appeal], as stocks pullback modestly.

    -           Main events: MON AUD Home Loans-, CAD Housing Starts, BoC Business Outlook Survey, Alcoa TUES CAD Trade Bal USD Trade Bal. NZD Retail Sales WED USD Fed Chairman Bernanke Speaks, Core CPI, CPI, Core Retail, Retail Sales, THURS CNY CPI, GDP, USD Unemployment Claims, Empire State Mfg Index, TIC Long Term Purchases, FRI: USD Building Permits, UoM…

    -      Earnings: MON: Alcoa, TUES  Intel, WED JP Morgan Chase, THURS: Adv Micro Devices, Google, FRI Bank of America, General Electric

     -      Big Theme: Risk assets up over the past day despite continued very high rates demanded on Greek bonds, markets focus on US earnings. Beware that with most risk assets at/near highs there is real potential for profit taking regardless of outcome. All eyes on JP Morgan Chase earnings announcement before the US open(around 1:30 pm GMT) as it is the first of the big banks to report and will be an initial indicator of the health of the critical US banking sector.



    US: UP- interest in tech plays ahead of Intel's latest report helped the broader market muster a fractional gain despite mixed results from Alcoa yesterday, ongoing concerns about Greece, and about already high stock prices at/near strong resistance that will need bullish earnings results in order to keep pushing higher.

    Asia Stock Outlook Up: At the Asian close early Wednesday GMT Japan's Nikkei average rose 0.4 percent on Wednesday, inching away from two-week lows hit the day before, with chip-linked exporters boosted after Intel's (NASDAQ:INTC) sales and margin forecasts handily beat market expectations, raising hopes for Asian tech chip makers and related tech sectors.

    European Stock Outlook Up: At the open of early Wednesday trade GMT, European shares managed to shrug off concerns about Greece and bounced back in early trade on Wednesday, with technology shares advancing after strong results from Intel (INTC.O), the world's top chip maker, but banks eased ahead of results from JPMorgan Chase (JPM.N).


    Commodities Outlook: Up: In Tuesday and early Wednesday trade GMT following overall risk appetite, still down from Monday’s drop.

    Crude Oil Daily Outlook: Up: In Tuesday and early Wednesday trade GMT on rising risk appetite despite the International Energy Agency (IEA) upward revision of supply for this year, as oil has generally moved more with speculative sentiment than fundamentals. Still down since Monday’s drop.

    Gold Daily Outlook: Up: In Tuesday and early Wednesday trade GMT following rising risk appetite, still down from Monday’s drop

    FOREX Daily Outlook: In Tuesday and early Wednesday trade GMT: Bias to risk fx as currencies perform almost exactly according to their place on the risk spectrum, with the JPY weakest and AUD strongest. Only exception is the very weak NZD, still feeling the IMF’s assessment that it is 25% overvalued, as it lost ground to all except the JPY.

    US Dollar Daily Outlook: In Tuesday and early Wednesday trade GMT: Performing as expected in risk appetite market, down vs. all fx that is higher on the risk spectrum. Down vs the EUR, AUD, CHF, CAD, NZD, GBP up vs. the JPY

    Euro Daily Outlook: In Tuesday and early Wednesday trade GMT: Up vs. the USD, JPY, CHF, NZD down vs. the GBP, AUD, CAD

    Generally performing as expected in a risk appetite market, up vs. most safer currencies, down vs. most riskier ones, with exceptions of GBP and NZD.

    Yen Daily Outlook: In Tuesday and early Wednesday trade GMT: down vs. virtually all majors

    British Pound Daily Outlook: In Tuesday and early Wednesday trade GMT:  Up vs. the EUR, USD, JPY, CHF, NZD down vs. the AUD, CAD,

    Australian Dollar Daily Outlook:  In Tuesday and early Wednesday trade GMT: Up vs. the USD, JPY, EUR, GBP, CAD, NZD, CHF

    New Zealand Dollar Daily Outlook: In Tuesday and early Wednesday trade GMT: Down vs. all except the JPY

    Canadian Dollar Daily Outlook: In Tuesday and early Wednesday trade GMT: Up vs most fx except AUD

    Swiss Franc Daily Outlook: In Tuesday and early Wednesday trade GMT: up vs JPY, USD, down vs others

    CONCLUSIONS & Big Picture: Short term bias for risk assets remains, even as trend struggles. The S&P 500, our key risk asset barometer, like other major stocks, holding on at/near 52 week highs Near Term Bias bullish as risk assets continue to climb, on latest hope of Greek rescue and optimism on US Q1 earnings.  Longer term, we are concerned especially about the latter part of Q3. In July, when 2 major events hit: Spain needs to sell about 30 bln euros in bonds AND a massive wave of US mortgage rate resets not seen since 2007 begins. The last time we saw this magnitude of rising mortgage rates markets stalled out and ultimately crashed. NB: Never fight the trend, no matter how irrational, as markets can stay irrational longer than you can stay solvent (Keynes). Therefore, as anyone who follows our trade recommendations knows, we always wait for some breach of key support/resistance as a signal to enter a position as odds appear to be in our favor, and even then only when the likely target is more than 2x as far away as out stop loss (which we ALWAYS USE, RIGHT?) so that our winning trade profits exceed out losses by at least 2:1.


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