Yen short covering: More room to run?

Data today showed orders for U.S. durable goods increased more than forecast in April. Bookings for equipment meant to last at least three years increased 3.3% last month after dropping 5.9% in March.  The S&P 500 is down for a third day in a row.

Equities: The JUN13 E-mini S&P 500 is down 8.5 points to 1641.25. Our key line in the sand for this market is 1651. If the market can stay below 1651, we have a first bearish price target of 1623. We believe the market could continue its correction down to that level shortly. The Nikkei continues its massive tumble, trading down another 580 points today to 14240. It was just at 16000 a few days ago.

Bonds: The U.S. bond futures are quiet today, with the JUN13 10-year trading up 5 points on weak stock market, and the JUN13 U.S. 30-year trading up 13 ticks. We believe even with the stock market downturn recently, the overall trajectory of the bonds is still down, as the Fed may start to lessen their bond purchases later this year.

Commodities: After a sharp end of day rally to above $94, the JUL13 crude oil contract has come back down, and is trading down $0.85 to $93.40. We believe this market is headed lower, with a first target of $92, then $88. Gold and silver are very quiet this morning, with gold trading down $6 to $1,386. Key grain markets are all down slightly this morning.

Currencies: Both the Euro/Yen and the Euro/Swiss spread have decreased a lot today, with the Euro trading down 13 ticks, while the Yen and Swiss Franc are seeing big rallies. The Yen is now firmly above our key pivot level of 97.60, and we have a technical target on the upside at 100.24 to indicate we believe the short covering in the Yen still has room to run.

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About the Author
Anthony Lazzara

Anthony Lazzara, CEO of Newport Beach, Calif., commodities investment firm Lido Isle Advisors, spent 10 years as a trader and floor broker at the Chicago Board of Trade and Chicago Mercantile Exchange. Anthony has significant experience in the energy, fixed income, and equity futures markets. After being a long-time independent futures trader, Anthony saw a tremendous opportunity to educate investors on how to invest in professional traders. Anthony is now focused on his duty as CEO of Lido Isle Advisors.

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