Canadian Dollar “Loonie Looking For Breakout”

      The Canadian Dollar on a weekly chart has formed a nice symmetrical triangle, but who is going to win the fight? The fundamentals are going to be the determining factor. There are two ways you can look at the Canadian economy.

      For the bulls, international investors bought C$10.7 billion in securities. Is this a pre-warning to the bears that the Canadian economy is better than any other G8 countries. Canada’s inflation record this year is better than the other group of seven industrialized nations. Consumer Prices advanced 2.2% in May from a year earlier, compared with US at 4.2% and the UK at 3.3%.

     Economists are looking at peak inflation in the first quarter 2009 between Jan and March. At a rate of 4.3%. After March they looking for slow down to 2.9% going into the following quarter.

     Now for the bears, if reports come out worse than expected would be good to drive the Loonie down and also better than expected reports in the US and UK. A continued stalling in export and home sales will also drop the Canadian Dollar.

     Canada is the second biggest crude reserves behind Saudi Arabia, and is the second largest wheat exporter. If crude and wheat continue there downward move will drive exports down.

     For a trade recommendation I am looking at going for a reverse ratio spread. This spread is initiated by selling an at-the-money put and call, and purchasing two or more out of the money puts and calls. You would like two obtain a credit or at worse break-even on the debits vs. the credits. You do not want to hold the position any longer than 30-45 days left and you want at the least 3 months left at time of entering.

     Sell the December 9900 put for 222 or $2220.00 and buy two 9550 puts for 95 or $950.00/each. At the same time sell a 9950 call for 222 or $2220.00 and buy two 10300 calls for 99 or $990/each. The options have 137 days left. For money money management or exit strategies please contact me at jimmy@transworldfutures.com .

Past performance is not necessarily indicative of future trading results. Trading advice is based on information taken from trade and statistical services and other sources which Transworld Futures believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder.Futures trading involves substantial risk of loss and may not be suitable for all investors.

To contact Jimmy Tintle email is jimmy@transworldfutures.com or reach him by phone at 1-877-843-4519. Transworld Futures offers a wide variety of trading tools, webinars, and simulated trading. We also various types of accounts from deep discount online trading to managed futures, and FOREX accounts.

Market Recap 1-18-08

Where do we start this week? Well, let’s take the “Sleeping Giant” SUGAR, after my post for the mid week on wednesday sugar took off all the way past the .1200 to .1303 it settled at .1245 and then all the way back down to .1117 today. Going into the close of the pit it is trading in the mid eleven cent range. Is it still a good buy here? with the world economy going through a slight turbulence the supply and demand for all commodities may change. I still believe that sugar may reach the 50% retracement at .1359 but we would have to sustain here at .1150 area.
Now for the talk all over the world. S&P 500. What a wild ride for a Tuesday. All futures brokers were in for it this morning. The only ones with smiles on there faces were the ones if they were short. Let’s face it, a 75 basis point cut in the interest rates and the president coming out with a 145 billion dollar stimulus plan still cannot sustain a large move to the upside. Granted were are trading in 1311 area this afternoon but it won’t take much to take out the lows again. Can we all say “Global Panic”. Once one touches the down side then they all come aboard. The big guys are looking for Federal Reserve and governmental bail out still. It should be an interesting week for the S&P 500. Check out my previous post for where it should go using Fibonacci Retracements and support and resistence techniques.
For the grains “Beans in the Teens” was short lived for now still trading at $12.50 level but this world panic epidemic might drive prices down. Corn at $5.00 was short lived also trading just below the $5.00 mark at $4.97 but seems to be the strongest of the grains right now. Let,s see how the grains pan out for the next couple days and I will have an overall look at those markets.
Gold, Gold, Gold. Went back a nd touched that $850.00 level in the overnight now back up to $900.00. Let’s see how the fund managers handle this episode with the S&P 500. Are they going to flee and drive up gold one more time? If we hold this $895.00 level and get a close above $900.00 by the end of the week we may see a run to $950.00 again. As stated in the earlier posts.
Hope everybody had a good three day week-end and look for a mid week recap again. Remember,past performance is not indicative of future results. Trading futures and options is not suitable for everyone. There is a substantial risk of loss in trading futures and options.