Good morning. With most attention on Washington today, anything can happen. However, the stock indexes are weak and look like they should be sold on strength. The dollar index continues its strength as the EC and BP are getting knocked down significantly. For as bad as things look in the U.S., it looks worse in the UK and EC countries. (I was reminded this weekend that the ECB raised rates last summer...they have some catching up to do with rates).
The size of the governments funding needs is finally getting a little more attention, and is seemingly putting some pressure on longer term interest rate futures. The numbers are so big (and growing by the day) for future government borrowing (supply) it is hard to get a handle on. The impact on interest rates and foreign exchange should be huge also. Longer term interst rate futures have developed a trading range since early December. I continue to look for opportunities to sell these contracts.
Gold is rallying in the face of the stronger dollar but is not particularly bullish here. Crude on the other hand is lower again. It's last trading day for the Feb contract and March is trading around 40.50. With the global demand picture not brightening any, we may see March quickly catch up to the Feb levels, (mid 30's).
There is a substantial risk of loss in trading commodity futures, options and foreign exchange products. Past performance is not indicative of future results
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