This is going to be fun!
We already have a bigger boost than we expected in the futures market. After extensively reviewing our picks(generally bearish) from last week’s action we determined that even 55% is too bearish as we pop over our breakout levels. So we added more picks to our very bullish Watch List, held an extensive conversation on Mattress Plays in Member Chat (just in case) and dug through the dirt looking for “green shoots” in our weekend reading – all to help us get more comfortable with the bullish plays IF we break over our watch levels and hold them (3 of 5 at least): Dow 9,829, S&P 1,071, Nas 2,146, NYSE 7,047 and Russell 620.
Also, just in case, we reviewed the Collar Strategy, which is a very useful way to use options to lock in long-term profits, which can have nice tax advantages if you can benefit from hanging onto things over 12 months. Japan is closed and Asian stocks fell off on low-volume trading. “The question is whether the rally has over-extended beyond the confirmation of economic stability that we’ve seen,” said Jason Teh, who helps manage about $3.2 billion at Investors Mutual Ltd. in Sydney. “It’s still hard to know exactly where the world’s going to go, and the degree of growth remains very hard to quantify.” The Hang Seng dropped 200 points (1%), back to 21,299 and the Shanghai fell half a point but India went the other way (industrial output up 10.4%), along with Singapore, who are claiming a 14.9% rise in GDP – how’s that for a green shoot?
The futures went wild at 3 am, when Europe opened, and those markets are up over 1% on continuing news that the dollar is being dumped. This time we have an article in Bloomberg indicating that Central Banks have printed over $400Bn in new money last quarter, bringing their holdings up to $7.3Tn, yet only 37% of that money went into the US dollar. The dollar’s 37 percent share of new reserves fell from about a 63 percent average since 1999. Sever Englander of BCS concluded in a report that the trend “accelerated” in the third quarter. He said in an interview that “for the next couple of months, the forces are still in place” for continued diversification.
That helped reduce the dollar’s weight at central banks that report currency holdings to 62.8 percent as of June 30, the lowest on record, the latest International Monetary Fund data show. The…
