Nymph’s Take for Next Week….Zew Zew’s Petals

Well, Euro Trash is still holding us up over SPX 1070 and Eur/USD 1.2134 but boy it was close and that level is still a battle field. So let’s look at what next week will bring us. Next week is Option Ex, in fact it will be quadruple Witching, so that means heavy volatility on Wednesday when all the market players will be pushing their positions up or down to hit the Strike Price of their choice. We really only have two major earnings next week BBY on Tuesday and FDX on Wednesday. Yet, those two companies could really give us insight into our consumer. UNG has its monthly roll over dates the 14th-17th.

OVERALL TRADE FOCUS FOR THE MARKET NEXT WEEK

If Euro/USD can stay over 1.2134 then this rally can continue. But if it can’t, good-bye oversold rally and good riddance to it (I know Fly I have to get away from my bias). Tuesday’s GERMAN ZEW DATA will probably be the BIG EVENT that establishes whether it will hold. Also, due to the oversold nature of so many stocks, the triple etf’s gives you the best firepower so why mess around with individual names, but be careful they are wild to say the least. The SPX resistance top would be around 1121 and support around 1054ish.

Monday

Australian Banks will be closed for Queens Birthday. New Zealand Retail Sales come outand European Monetary Union releases Industrial Production Data for April, this basically shows the volume of production of Industries such as factories and manufacturing. If it is up it is a sign of inflation concerns and could spike the Euro. This is really our only major economic data.

HOW TO TRADE ON IT. Without much of earnings or economic data driven market, the market will probably continue the trend it was following on Friday due to the fact that currency pairs and commodities should remain in range.

Tuesday

RBA (Reserve Bank of Australia) releases their Minutes of their last Interest Rate Meeting. They normally talk about how they see the global market and it is an interesting read. Bank of Japan Interest Rates is due. BoJ has an interest rate of .1 percent and should keep it at that level during this two day meeting. UK has CPI data. That is The Consumer Price Index which measures price movements by the comparison between the retail prices of a representative shopping basket of goods and services. It’s another Inflation measuring tool. China releases its leading index

Then comes the key moment of the week, the ZEW Survey results for GERMANY and European Union for JUNE. It is this survey measures the institutional investor sentiment of how they feel about the present time and the future.

USA Import Prices are released from the Department of Labor. It is a measure of Inflation and we get a NY State of Mind, with the NY Empire State Manufacturing Index which is a survey done by the Federal Reserve Bank of New York that takes a survey of Manufactures in New York

HOW TO TRADE ON IT. The Zew Survey results normally are Market movers that carry over to the United States. Everyone is expecting a weaker number so if inline or higher it could really cause a greater short squeeze in the Euro Pairs and resulting a positive move in all the global growth plays, i.e. Tech,commodities,etc. mainly all the plays from 2009. In addition, BoJ meeting could keep the Yen on the weak side. This could also be strengthening with softer import prices to keep USD weak. But if ZEW misses, back to watching to see if it can stay above the KEY 1.2134 level for the EUR/USD…..and FLY will be watching his FXY for a weaker Yen. For Stock plays if ZEW is a beat I would check out BBY to see how they did before the bell.

Wednesday

Employment data for the UK, their Non Farm Payroll will be release. The European monetary Union will release its Consumer Price Index numbers. In the USA, housing Starts, which are new home construction and Building Permits which shows the number of Building Permits for new construction projects will be released. We also will get our Producers Price Index Data which shows possible inflation.

We also get to listen to Ben B. He will be giving a press conference as to how the Fed sees the current US economy and the value of USD

HOW TO TRADE ON IT. Europe could be looking at growing unemployment and higher inflation so we could see some Euro risk. With Ben B probably talking about how good it is we could see the Rate Hawks out talking about a possible interest rate hike in the future. If our housing data misses we could have a Risk Off day, and if we keep this rally from last Thursday going it would be an overbought market probably and ripe for a sell off. A sell off would also make sense for Option Players trying to push down their positions to hit strike Put prices because any older calls are out of the money and many may have bought lower Put strike prices. Also we get Earnings from Federal Express FDX, before the bell, the CEO normally gives us a clearer picture of the global picture. VXX may be the play.

Thursday

Swiss Interest Rate Decision will come out, can’t seem to find anyone really talking about it yet. We also get the EMU Monthly Report which the European Central Bank publishes a monthly report that contains a detailed analysis of the prevailing economic situation and the risks to price stability. Bank of Japan releases theirs on Friday. We also get UK Retail Sales coming out. In the USA session we get the Consumer Price Index data which goes to issue of inflation.

HOW TO TRADE ON IT. With the UNG finishing the rolling over of their Contracts and probably our weekly data from the EIA/DOE showing a bigger build of Nat Gas inventories, it may be a good day to re examine any of your Nat Gas holdings you may be long in. UK Retail Sales if it misses could carry over to help on a “Risk off play” mainly at us back down trending. USA will probably be pushing China to rise which will be also playing into a sell off.

Friday

BOJ Policy Meeting results are released; mainly the Bank of Japan publishes a study of economic movements in Japan after the actual meeting. These meetings are held to review economic developments inside and outside of Japan and indicate a sign of new fiscal policy. Any changes in this report tend to affect the JPY volatility. Also, Germany’s Producers Price Index is released which again addresses inflation issues.

HOW TO TRADE ON IT. I would again be watching the Yen. It actually could be firming up and we could see a Friday Risk Off play across the market. With it being Option Ex and if we had a big drop down to SPX 1054ish I would expect a choppy day.

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