The Dollar Rips, Taking the Appeal out of Commodites, The Volatility is Here to Stay, Sorry.

The Drop in Oil Prices for now is fueling the Bulls on Wall Street, Blue chips close positive in session with good news about bond insurers and lower oil, but indexes are mixed for the week. The rising dollar is taking the appeal out of Commodities and Commodity related stocks, and the Intense Gut Wrenching Market Volatility is Here to Stay.

FROM OUR FRIENDS AT TRADERS AUDIO, THE AUGUST NEWSLETTER TO INVESTORS......

Volatility and wide daily ranges continue to be the main topic of conversation still as we continue to see increased speculation due to fallout from the housing/mortgage environment and inflated energy prices. We expect to see continued volatility during the summer months this year due to increased levels of uncertainty in investors minds. Considering that prior negative economic and market conditions still exist I don't anticipate any dramatic change and do expect to see continued volatility into the fall trading session.

S&P Futures managed a strong rally off the 1201.00 level as fear selling failed to develop into panic selling. The sell off was a high energy trade driven primarily by the lack of presence of any real aggressive bargain hunting type buying. Stories in the news about continued bank write downs and slow if any GDP had kept the buying to a minimum as the bears had their way for the most part of July. But equally important is the huge rejection we've seen from the extreme low levels of 1201.00 sp and 10800 Dow. The SP's have enjoyed a huge run up to 1300.00 as oil retreats and holds a sustained trade below $120.


Pit population continues to be at levels as we would expect for this time of year. We have been seeing some good size orders, market movers as we call them, coming off our large desks providing good information for our listeners. Remember this is still summer trading session and while the ranges haven't really been tight the market at times has. By that I mean that during the mid day trade we have seen slow local to local type trade, typical for this time of year.

With the fundamentals essentially still what they were or have been for the last year plus now we do not anticipate any major change for the trends we've been experiencing. We think the market still has a full steam ahead type mentality and wants to test some of the key technical levels set last month. A couple big downside numbers traders are watching in the SP Futures are 1255 and 1200 in the Dow Futures the level is 10800 then 9500 if things get extreme to the downside. Above many traders are watching 1320 in the SP and 12000 Dow.

Happy Trading