Stocks took it on the chin last week as a bad GDP number put growth fears into the forefront of investors’ minds. This will be short lived as the Obama Sunday night deal on the debt ceiling will likely be all the market focuses on for the next couple of days as the House and Senate do their political musical chairs to get this passed before the August 2nd deadline. I recommend selling into a Monday rally in the S&P as this is really just the beginning and doubt will quickly reenter the market. Bonds remain avoidable, but should see buying on a weaker stock market. Obviously the attention of the world markets will be on the U.S. debt ceiling issue, but I believe that the debt ceiling issue is not the issue at all. The most important component of this debt ceiling issue is that a credit rating issue and inflation forecast adjustment will come out of this whole thing. The dollar remains a buy on a dips, hitting a cycle low earlier this year and setting up a big rally. The euro and pound are sells, but the best short opportunities might be found in the Canadian and Australian dollars as they approach a critical cyclical turning point. The Japanese yen is in a clear bull breakout and could become very volatile, spiking in the near term to potentially hit my forecast that: "The Japanese Yen futures will hit 140 before it hits 80 or I will quit writing the Weekend Commodities Review...forever." ______________ James Mound Disclaimer: There is risk of loss in all commodities trading. Losses can exceed your account size and/or margin requirements. Commodities trading can be extremely risky and is not for everyone. Some option strategies have unlimited risk. Educate yourself on the risks and rewards of such investing prior to trading. Past Performance is not indicative of future results. Information provided is compiled by sources believed to be reliable. JMTG or its principals assume no responsibility for any errors or omissions as the information may not be complete or events may have been cancelled or rescheduled. Options do not necessarily move in lock step with the underlying futures movement. Any copy, reprint, broadcast or distribution of this report of any kind is prohibited without the express written consent of James Mound Trading Group LLC.
