-CURRENCIES SCREAMING UNCLE-

Okay, so the obvious headlines have been riveting. $1 trillion dollar bailout package to save Greece from what could be deemed as possible collapse. Vigilance is the word and while we will not play politics much in our market analysis, we will simply state that we think the market relief is coming...at least for the next week or so. And so it has come front and center that yes, these currencies are finally 'screaming uncle,' and capitulation in the risk appetite currencies, I think, has come upon us.

The Euro fell to $1.22 earlier this week, a 4-year low, yet with a strong move upwards Friday, it enjoyed its first higher weekly close in 5 weeks. Short traders are forced to close their positions, which could be going on this next week...and we believe it will.

The Aussie Dollar vomited from the 92 handle down to the 82 handle within 3 weeks. Amazing fall, and we believe, a rebound is COMING. It might not be a monster rebound because fundamentally we are looking at exceedingly tenuous economic challenges out there. The MONSTER RALLY in the entire Treasuries strip (30-, 10-, 5, 2-) reflects said safe haven response to the uncertainty and sheer fear that has gripped these markets these past few weeks. But after such a STELLAR FIRST HALF of 2010, can you blame these markets for this drop, and for this explosion upwards in Treasuries? Well, for those of you who were in and on the correct side, good for you...YET for those who are looking for a play in the next few days, well, we think the OPPOSITE DIRECTION is the way to fly.

RE: The Euro: Commercial hedgers are the longest they have been in over 10 years. The Euro has already VOMITED 25 handles from 150 all the way down to 125 area, and we think the pain will subside...perhaps for a week or two, perhaps much longer...but for now here's our suggestion...

So our recommendations are either/or....Choice 1: SELL the September Australian Dollar 79 Puts at the MARKET on Monday (or split the Bid and the Ask). We think we are going back up to 88, possibly higher in the Aussie. Choice 2: SELL the 119 September Euro Puts at the MARKET on Monday (or split the Bid and the Ask). We think the Euro pops back over 130, possibly higher. Make sure your margin-to-equity ratio does not exceed 30%, and 50% MAXIMUM if you are an aggressive trader. Contact us if you have questions about how this works, or if you wish for us to send you a free e-book on trading to get started. Also, contact us as we have a 3rd play that is in the Softs (eg Cocoa, Coffee, Sugar, etc) so email us if you wish to hear that recommendation for this week---This week is a fun one, indeed; we think lots of fireworks this next week, and a change of direction for a number of markets.

NOTE: We will give EXIT RECOMMENDATIONS also; Follow along and watch DAILY if interested in these market movements; next post could be in a week, or a few days, but definitely AT LEAST 1 post per week, folks. Trade with respect and let's enjoy the weekend.

THE RISK OF LOSS IN TRADING CAN BE SUBSTANTIAL AND IS NOT FOR EVERYONE. TRADE ONLY WITH RISK CAPITAL.

-MH

commoditytraderpicks@gmail.com