September 5th, 2014 - Issue #752

In This Issue

1. Hot Market: Euro Currency
2. TTN September-October 2014 Outlook: Going to Extremes
3. Economic Calendar

1.  Hot Market Report:  Euro Currency

From our friend Jim Wyckoff

Jim has an excellent daily newsletter where he reviews different markets, alerts you for potential trades and much more. Included is his great bi-weekly newsletter with charts and a little longer term outlook. We recommend checking out his website, educational CDROM, and services at www.jimwyckoff.com click on image below to enlarge

See on the daily bar chart for the December Euro currency futures that prices are in a solid downtrend and have just hit a 14-month low. The Euro currency is in a major bear market, and the "Euro skeptics" are flexing their muscles, regarding the long-term survivability of the common European currency. There are no early technical clues that the Euro currency is close to a major price bottom.

2.   TTN September-October 2014 Outlook: Going to Extremes 

Wed, 03 Sep 2014 16:16 PM EST 

The headlines this summer - Russian weapons and troops magnifying the bloodshed in Ukraine, Hamas rocket attacks inviting a terrible reprisal from Israel, ISIS militants ravaging Iraq, a new civil war brewing in Libya, and the worst ever outbreak of Ebola in Africa - have done surprising little damage to market confidence and the expectation that the economic recovery will continue. The S&P500 notched a record high above 2,000, bond yields haven't budged off their recent lows, and commodities have showed almost no reaction to these geopolitical flare ups.

The next two months may see more obstacles placed on the wall of worry, but it's hard to say if events will send the markets in a new direction. After years of providing copious accommodation, global central banks are about to move in opposite directions, with some looking to add even more stimulus while others start to withdraw extraordinary accommodation. This divergence could be a trigger for a global retrenchment, especially when the markets decide it's time to start anticipating Fed tightening next year. Corporate events too can play a role, as firms need to confirm continued momentum in the economy when they report Q3 results in October. And of course the wrong geopolitical headline could turn market sentiment on a dime, particularly if the Ukraine crisis escalates to the point where Russia and NATO might butt heads. There is a low probability of an outcome that extreme, but at some point markets will find a trigger for shifting into a new phase, either reversing on the weight of too much negative sentiment or undergoing a revival of animal spirits that accelerates the recovery. 

The Corporate Pendulum Swings

As traders return from summer vacation, key corporate news may shape the markets. In addition to earnings season in October, two highly anticipated corporate events in September may mark the decline of one tech giant and the ascendancy of another. The first is Apple's likely entry into the mobile payments space and the wearable device market on September 9th. Wearables would be the first new category Apple has entered that goes beyond the roadmap laid out by Steve Jobs and the scope of its success could set a tone for the stock of the world's largest company. If Apple's wrist computer, featuring notifications and NFC technology, becomes another device that people "didn't know they needed" it would create a new consumer category, but if it ends up as just a niche product it could reignite the talk that Apple has lost its visionary edge. 

Just days after the Apple event, Alibaba will launch its massive US IPO on the NYSE. China's dominant e-commerce company has its tendrils in every corner of online selling and boasts extremely high margins that put US counterparts eBay and Amazon to shame. With China rapidly moving to overtaking the US as the world's largest economy, the Alibaba IPO in New York may come to symbolize the ascendency of emerging markets to an equal footing with developed economies. Alibaba is at the vanguard of a flood of IPOs expected in weeks ahead, which could weigh on broader markets as traders rotate out of other positions to invest in the new issues.

Politics In Extremis

Of the many bloody conflicts of 2014, the Ukraine crisis

Please fill out the short form below to read the remaining article TTN September-October 2014 Outlook: Going to Extremes

3. Economic Calendar

Source: Moore Research Center, Inc.

* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.

** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.

*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!