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Financials Pit Review - June 28, 2010

The Financials Pitguru Review
For the week of June 28, 2010

This trader has mentioned before over the past year or so that a double recession was possible because of the housing market. When the 5 yr arms and seven years arms come due over the next 1 to 3 years there could be serious repercussions. Besides the issues that are apparent presently like foreclosures and unemployment, consumers could just walk away from their mortgages. An article this morning by Robin Griffiths, technical strategist at Cazenove Capital also has this same belief. He mentions that consumers could try and get out of debt, but there may be no buyers to help. (1)

The battle between bulls and bears will always be around. In this current market, the bulls argue that P/E ratios are in good shape and that is a buying opportunity while the bears looks at the current status of debt filled nations, toxic assets, and, yes, a bleak housing and job market. When large companies move money out of the market and into gold and treasuries traders should be cautious. It is one thing to be doom and gloom, but it is another to be honest with what is happening out in the financial system.

Consumer spending appears to be up 0.2% which is better than expected. The thing is consumers are known for spending because of credit cards. Yes, many do slow down when the economic climate becomes choppy, but leveraging is what many consumers do. The mentality is if a person may go bankrupt they might as well have a good time and live large for the present. So, are these numbers really positive?

It seems as though people are not buying into the market early this week as the market is trending down. The S&P was around 1073, down 3 points while the DOW was down 15 to 10128. (2)

1. http://www.cnbc.com/id/37970896
2. http://www.cnbc.com/id/15839121

By PitGuru Frank LaMantia

Softs Review in The Week of June 21st - 2010

To keep up with soft market:

"Following the price action of the past week coffee traders have now developed into two basic camps, neither of which believes that the price will stay close to $1.60. I believe that while prices will certainly move up (I've pitched my tent among the bulls,) a key element fueling the bullish camp is the benefit of the flow of money. This is not a subject mentioned often enough and yet it seems responsible in a large part to premier rallies seen in commodities the past two years. The bearish camp seems more focused on warehouse stocks, the Brazilian harvest and the potential for more aggressive producer selling. In some respects the current coffee market reminds me of similar bull moves seen over the past couple of years and it might be worth reviewing moves made in cotton, crude and sugar. One major point is that once those bullish moves were over, and prices retreated, they did so with the help of gravity and moved fast. I don't expect that time has come for coffee values yet and still look for further upside.

Cotton prices are being impacted by the excellent growing conditions for the new crop. That means that the bulls who believe that prices have further to go on the upside will need help. Yes, current supplies remain tight as the transition from old crop to new takes place, but I do not expect any breath taking moves over the near term. Same type of sideways price action expected in juice.

Cocoa ought to provide a reasonable opportunity this week for bears like me to acquire some puts at a reasonable level. I do not have bullish feelings at all towards cocoa and strongly believe that demand is not going to live up to expectations. Sugar on the other hand offers a trading range potential between 15 and 17 basis the October contract."


By Pitguru experts

Futures Trading Blogs for News on Metals: Euro in Danger?

Today, Pitguru blogs will bring you a piece of news in Metals market. Here is a good article that i found from Bloomberg stating Greeces credit rating might be lowered and the Euro losing ground against the USD and the Euro to new yearly low… This will have a huge impact on the precious metals markets..

“The euro fell toward a one-year low against the yen on speculation Greece’s credit rating will be downgraded as the country struggles to push through fiscal cuts demanded by the European Union.”

Europe’s single currency also dropped toward a nine-month low against the dollar after Standard & Poor’s said it may cut Greece’s rating again by the end of March as a weak economy and political opposition threaten the nation’s ability to reduce the EU’s largest budget deficit. The dollar gained against 15 of its 16 major counterparts before a report today forecast to show U.S. durable goods orders increased.

“There are concerns that Greece may not be rescued,” said Satoshi Okagawa, head of the foreign-exchange forward trading group at Sumitomo Mitsui Banking Corp. in Tokyo. “This is causing selling of the euro and buying of the yen, and leading to risk aversion.”

The euro dropped to 121.10 yen as of 11:09 a.m. in Tokyo from 122.03 yen in New York yesterday. It fell to 120.71 yen on Feb. 5, the lowest since Feb. 24, 2009.

The 16-nation euro declined to $1.3494 from $1.3538. It touched $1.3444 on Feb. 19, the lowest since May 18. The European currency has fallen 2.6 percent versus the dollar this month, heading for a third monthly loss, its longest stretch since November 2008. The dollar fell to 89.75 yen from 90.15 yen.

The cost of protecting against default on Greek government bonds increased 13 basis points to 384 yesterday, according to CMA DataVision prices.

Rating Downgrade

“We believe that a further downgrade of Greece of one to two notches is possible within a month,” S&P analysts led by Marko Mrsnik in London said in a statement released late yesterday.

S&P cut Greece’s rating twice in December to BBB+ and signaled at the time it may lower it again. Greece has struggled to persuade investors it can slash its budget deficit from last year’s 12.7 percent of gross domestic product.

“I’m not sure if other nations have enough resources to help Greece,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “If the issue is neglected, that will stoke concerns about the euro. The dollar remains strong against the euro on a relative basis.”

Bookings for durable goods in the U.S. climbed 1.5 percent last month after rising 0.3 percent in December, according to the median estimate of economists in a Bloomberg News survey before the Commerce Department reports the data today. ”

P/S: For more news on futures markets

Futures Blogs Share News on Commodity Futures Trading Marketsmm

Commodity information, futures advices, trade recommendations or updating news around commodity futures trading markets are among the things you can get from Pitguru thanks to weekly reviews or futures blogs . Being successful investors, we all know the importance of these sources. Back to futures blogs, what d are these blogs written about? For years, considered as a prestigious name in the trading floor, Pitguru has the team of experts who are responsible to regularly write about Financials, Energies, Grains, Metals, and Softs markets to help traders update the latest information of what happening around the platform. Gold Reaching $1,180!! ( on Metals), WTI spreads weaken as Crude goes lower (on Energies), Ford rules ( on Financials), Electronic Trading ( on Softs), and many more. You got the news? Catch up with the markets to make right decisions for your biz!

Jurgens Bauer, Softs Guru for PitGuru.com, visiting BNN's Trading Day on May 22nd, 2009