Wednesday, September 26, 2012

Additional Thoughts on Euro by @JimIurorio of TJM Institutional

Additional Thoughts on Euro by @JimIurorio of TJM InstitutionalSocialTwist Tell-a-Friend

Attached is a chart of December Euro Currency futures.

After a dramatic run-up, the contract appears to be in corrective down trend.  We feel the current trajectory could take us toward an objective of 126.60.  This level is both approximate trend line support and .50% retracement of the rally that began on 7/24.  We are looking at the ECX 127.5-126.5 put spread for 32 tick entry point.

This trade expires Nov 9th and has a potential maximum gain of 68 tics (100-32=68).

The fundamental argument includes rising yields in Spain and weaker than expected data from Germany.  For several years the pattern out of Europe has been fairly consistent wherein periods of relative calm are followed by a rash of negative data and unrest.

It feels like the cycle may be repeating...

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