wmeubank@ocp.kcmo.com
ASPRAY'S GLOBAL TRADER
Dollar Higher Along With Stocks Thursday,
But Overseas Stocks Plunge Early Friday
The markets are reported as the close of Thursday.
The dollar was choppy again Thursday versus the DMK and SWF, but most of the action was to the upside in Europe. The dollar was under pressure in early NY trading as the BOE cut-in rates gave the STG a big boost. The dollar recovered to close well above the lows and rallied a bit more early Friday. The sharp declines in the Asian stock markets, as well as the S&P futures, has caused the dollar to drop sharply. This, along with the U.S. employment data, may be enough to take the dollar below key support.
The dollar was very strong against the yen as buying in the yen crosses drove the market.
DEUTSCHEMARK/U.S. DOLLAR: The hourly P&F chart shows that despite the wide intra-day swings, the triangle formation is still intact. Still key daily and hourly support in the 1.7135-50 area. The dollar is not far above these levels in late Asian trading. A break of these levels should signal a break of support at 1.7050- 80, with targets in the 1.6850-6950 area. The daily studies are still all negative with no signs yet of a bottom.
Summary–Traders are 25% short at 1.7372-1.7414, stop at 1.7457. Added 25% short at 1.7186-7244, stop at 1.7313.
DEUTSCHEMARK/YEN: The yen crosses made further new highs Thursday and are still acting strong. Should be 25% long at 69.44- 74, stop at 69.67.
SWISS FRANC/U.S. DOLLAR: A break below 1.4000 does look likely. Traders are now 25% short at 1.4287-4321, stop at 1.4343.
When In Doubt Sell Yen Next Target At 125
The dollar put in another strong performance today versus the yen as buying in the yen crosses was heavy. The 124 level has been reached in early Asian trading Friday with next resistance and upside targets in the 124.50-125 area. The daily chart shows the breakout above resistance in 122.50 area. The ADX lines is still well below 30, but has broken its downtrend. This indicates that the dollar is likely to start trending higher and setbacks should be bought.
Summary–Go 25% long at 122.14-55, stop at 121.77.
STERLING/YEN: The STG/yen continues to act very strong as it make further new highs today. Traders are 25% long at 200- 200.54, stop at 204.33.
SWISS FRANC/YEN: The cross dropped back to the 87 area, but is again turning higher as the 88 level has been overcome in impressive fashion. Traders are 25% Long at 84.40- 76, stop now at 85.73.
CANADIAN DOLLAR: Positive action suggests the correction is over. The next rally should take the dollar back to the 1.4100 area. Go 25% long at 13992-4026, stop at 1.3966.
The Cable Roars Ahead On Rate Hike
The STG has held the more important support in the 1.6720-50 area and then rallied impressively on the BOE rate hike. This caught the market by surprise and also short STG. More rate hikes are likely as the 1.7000 level should be overcome. Traders go 25% long at 1.6822-65, stop at 1.6737.
STERLING/DEUTSCHEMARK: The cross formed a key reversal today as after reaching 2.8800 it rallied up the 2.9180 on the rate hike. The daily studies have improved but a further rally is needed to confirm a new uptrend. Traders went 25% short at 2.8877-8967, stopped at 2.9083.
STERLING/SWISS FRANC: The STG/SWF also surged to the upside catching us on the wrong side. Traders went 25% short at 2.3633-3700, stopped out at 2.3813.
DECEMBER T- BONDS: The bonds have pushed well above the 118 level early Friday and have reached the more important resistance in the 11816 area. Next upside targets at 119-120. Traders are 25% long at 11712-23, stop at 11629.
U.S. STOCK MARKET: The overseas markets are under pressure early Friday as the support in the December S&P at 936 has been broken. Should be short the December S&P at 946.50-949.50, stop now at 943.50.
November 7, 1997Thomas E. Aspray
APM Asset Management
P.O. Box 15366, Little Rock, Arkansas
Hosted by:
One Crossroads Place
610 West Maple Ave, Suite WWW
Independence, MO 64050
(816) 252-4080
sysop@kcmo.com