February 8, 2012 - Issue #622

In This Issue

1. Strategy Runner Announcement
2. Jim Wyckoff Hot Market
3. February and March Global Markets Outlook by tradethenews.com
4. Economic Calendar

Featured Articles This Week

a. Applying Fibonacci to Stock Market Patterns
b. Technical Indicators: A Love-Hate Relationship
c. Credit Crisis: Are We Set Up for The Perfect Storm?

1. Attention Strategy Runner Users.

Cannon Trading is one of the few brokers still able to offer Strategy Runner! "Strategy Runner" has been purchased by an online Forex and CFD Broker and many traders are unable to continue trading with SR and their existing broker.

Due to Cannon's multiple clearing arrangement, we can still offer strategy runner giving users the ability to trade automated strategies as well as discretionary trades. Please contact an account executive for more information contact an account executive or call us at 800 454 9572

Cannon Trading also offers 7 other platforms that can be a great alternative if you are a discretionary trader. You can start by exploring our demo here.

2. Jim Wyckoff's Hot Market - US Dollar Index

U.S. Dollar Index Bears Have Downside Technical Momentum

The March U.S. dollar index on Wednesday hit a fresh nine-week low. Prices are in a three-week-old downtrend on the daily bar chart and the bears have gained good near-term downside technical momentum recently. If the dollar index continues to trend lower in the near term, that would be one bullish underlying factor to support upside price movements in the raw commodity markets. The U.S. dollar index is a basket of six major world currencies weighted against the greenback and rolled into one composite index price.

Jim has an excellent daily newsletter where he reviews different markets, alerts you for potential trades and much more. Included is his great bi-weekly newsletter with charts and a little longer term outlook. We recommend checking out his website, educational CDROM, and services at Jim Wyckoff

3. February and March Global Markets Outlook by tradethenews.com

Trade The News is a financial intelligence network for professional traders globally. Visit TradetheNews.com for more information.

US Getting Off its Crutches

Even as Europe struggles to right itself, economic data has been good enough in the US to be called surprisingly strong, though much of that renewed strength appears to be from the chronic adrenalin shots of stimulus. Most recently the Fed extended its low rate pledge for over a year into late 2014, set an explicit two percent inflation target, and reiterated that QE3 is ready on a hair trigger. But stimulus is like a narcotic, the more you take the less effect it has.

With US data yielding many upside surprises in the last few months and bond yields pinned to extraordinarily low levels, equities have had a great start to 2012. Volatility has dropped significantly and stocks have gained steadily as the recovery finally seems to be taking hold. Yet the surprise improvement trends could create ever greater expectations for each successive data point, requiring ever better data to drive markets higher. Thus, any stumble in the economic data could be amplified as the winter months wear on.

The vital signs of the US economy have genuinely improved in recent weeks. Non-farm Payrolls have grown for sixteen straight months and the data has shown steady improvement over the last four months, capping it off with a resounding 243K reading last month, a twenty month high. The unemployment rate has also yielded pleasant surprises the last two months, coming in below expectations and falling to a nearly three year low of 8.3% in the latest reading. Measures of growth also improved in Q4, with an improving trend in US GDP and production indices. The second reading on US Q4 GDP will be out February 29 after the advance reading showed sequential improvement but disappointed expectations, while US production data has been uneven, though the most recent ISM data (both manufacturing and non-manufacturing) had its best showing in over half a year.

With moderate economic growth, however temporary, and employment indicators showing noticeable improvement, risk appetite has improved and the VIX "fear" index has hit a seven month low. But the nascent economic recovery may not be as healthy as some prognosticators believe. One key factor will be the continuing absence of a housing recovery. The construction sector has played a significant role in past economic recovery cycles, creating construction jobs and perceived wealth as home prices appreciate. But this time around, even though there have been some sporadic positive housing readings, the housing sector is unlikely to undergird the recovery in jobs and production.

4. Economic Calendar

Source: Moore Research Center, Inc.

* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.

** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.

*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!