The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.By Jason Pilling NEW YORK ( TheLFB-Forex) -- The S&P 500/Dollar Index inverse-trading relationship is building strength once more. Having taken a sabbatical during the summer months, the correlation is now moving back toward 90% on an intraday near-term basis. Currency traders will undoubtedly be glad to finally see three-month trading channels starting to break down, inline with secondary market trading patterns. Those traders who have already made the move to global futures contract trading really have distanced themselves from the cash market 9-to-5 daily grind, and have a market that can be accessed virtually 24-hours a day. That advantage will be key to long-term sustainability as the year evolves.
Now is not the time to be looking for any mid-term equity positions ahead of a volatile period of trade. For those who want to risk stepping in front of the long side of the equity locomotive, the potential is there to bank intraday trades at near-term targets. For those caught over-exposed to equity positions the trade desk may be able to highlight opportunities as this week unfolds. Global markets will move quickly, as per usual, and clients will likely need to make use of futures contract trading opportunities. Market Updates will be sent to clients as the futures contracts and regional markets move, and will gauge the global correlation levels and strength of potential. Near-term Global Asset Class Review:
Equity/USD Update: S&P500: Support, 1070; Resistance, 1120; Neutral, 1105. Dax: Support, 5180; Resistance, 5460; Neutral, 5350. DXY: Support, 79.30; Resistance, 80.60; Neutral, 79.70 Forex Update: EUR: Support, 1.3040; Resistance, 1.3365; Neutral, 1.3275. GBP: Support, 1.5325; Resistance, 1.5580; Neutral, 1.5505. JPY: Support, 76.30; Resistance, 77.05; Neutral, 76.80. Bullion/Oil Update: Gold: Support, 1625; Resistance, 1690; Neutral, 1640. Silver: Support, 29.40; Resistance, 32.15; Neutral, 30.30. Oil: Support, 74.70; Resistance, 81.50; Neutral, 77.65. The great unknown is how the world will view the continued strength of USD reserves held by central banks. It is unlikely that 80.50 resistance on the dollar index will easily break in one go, but probable that it could get tested multiple times in October. The 77.90 area looks to be near-term support. The dollar was sent on a wild ride as financial markets imploded in 2008 and the same ride may be ahead as 2011 plays out the same script. The last quarter of 2011 will not be for those with a weak constitution (pun intended), as market correlations will be violently tested. The current price points were pivotal for the dollar and stocks in 2009 and 2010, and will be important again now as risk aversion dominates the thought process. Add in Mutual Fund year-end at the close of October, along with massive equity-based client redemptions, and there will be a lot of pain felt again this year for those who have still not adapted to include global Futures trade in their portfolio. The fundamental outlook on global risk and debt will change day-to-day and will determine the direction of USD and equity trade. Traders will see technical reversals, fundamental break-outs and tipping points dominate price action in the near-term, which will create volatile intra-day movement as each global region opens and closes. The trade desk has all angles covered and will keep in touch with clients on a regular basis. Contact us for further detail and an introduction to the world offutures contracts. TheLFB is great for all skill levels. Receive market support, and get TheLFB trader advantage. Sign up today!