We’re about an hour away from the jobs report (8:30 ET) and ES remains within a right range of 1096-1101.
There is not much to write about these days. I continue to watch for evidence of at least a short term bottom on USD. I’ve discussed establishing an index short position when I feel comfortable about the bottom being in place. I remain patient.
I mentioned earlier in the week that I am also keeping a close eye on FXE. I want to see FXE fall through its 50-day MA. Right now, this is coiling up under that 78.6% fib line ($151) and I’m concerned about a blow off run to $158.
I posted charts of seven market leaders yesterday. It is show time for AAPL and BLK. They will either make the big push over their all time high or join GS into a group of failed market leaders. Either event will be noteworthy.
Finally, I will briefly touch on one kind of risk that is not on the radar of traders at all. Event risk.
I happened to be surfing the Internet and caught this old video of John Bolton discussing a potential conflict between Israel and Iran. The truth is, there has been conflict in the Middle East forever and you can’t trade markets (or live your life) fearing a conflict. We’re blessed here in the USA to be somewhat insulated from this.
My point here is not to be a voice on Israel and Iran. My point is that there is total complacency right now in terms of event risk. Other than oil traders, I hardly read anything about what might happen if there is a conflict in the Middle East. Markets would be rattled generally but what might happen with the USD carry trade? Would there be a massive squeeze? Would markets be hit even harder than normal because of a geopolitical event combined with the USD carry trade unwinding?
Hopefully we’ll remain blessed and lucky and things will remain quiet. However, geopolitical event risk should at least be on the radar.