Fundamental Trading Diary

Fundamental analysis of the capital markets

Weekly Preview

Major upcoming economic events this week:

  • ISM Manufacturing index from the St. Louis Fed – these numbers have been most recently stagant, registering below and around 50 – meaning little growth or recession in US manufacturing.  This could potentially go either way, but I doubt very much.  Contributing to the potential up-side is the low USD, which will make creating US export businsess more attractive.  Contributing to the possible  up-side is the low USD, which will increase manufacturing costs from raw materials (wages are experiencing deflation), and lower probable demand from decreased consumer spending power.
  • Non-farm payroll net-change and unemployment rates – economists are forecasting nearly 75,000 job losses.  Could you argue against it?  Businesses everywhere seem to be cutting people, downsizing and going out of business.

That being said, the market has already been very week recently leading up to these events, so we go back to the principle that we know the overall direction (down) since the market hasn’t yet caught up with the fundamentals, and we will look for better prices to enter in our second and third short positions.   I’m keeping my current short position, which went from a $1,000 open p/l to $475 over the weekend.

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September 2, 2008 - Posted by | Uncategorized

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