Two Ways To Play: Greenback is the New Black
Strengthen your portfolio in good times and bad.
The Wall Street Journal reports the dollar is back in fashion after gaining 8% against the euro in the past month. The recent surge in the dollar is due to slowing economies across Europe in addition to worsening expectations for the euro-zone region.
On Friday, the dollar continued its trend rising to $1.4673 against the euro. This compares with a high last month where the dollar traded at $1.60 per euro. Bullish analysts feel that it could reach $1.40 by next summer. See Mr. Practical's Minyan Mailbag: Small Caps Outperform?
From the Bull Pen: Bulls can continue to ride the intermediate trend in the dollar using the bullish dollar ETF (UUP). Near-term sell-stops can be set below $23.50.
From the Bear Cave: There seems to be misplaced optimism with small cap stocks, specifically with the Russell 2000 Index Fund (IWM). Bears can fade this rally into the $80 mark; buy-stops can be set above.
Saks to Show Bigger Loss?
The Wall Street Journal reports Saks (SKS) is expected to report a wider loss tomorrow for the quarter ending August 2 than it did a year ago when the upscale retailer lost 14 cents per share. This suggests that even the affluent are spending much less and aren't immune to an economic downturn. Earlier this month the company said same-store-sales dropped 5% in July prompting analysts at Credit Suisse to slash estimates for a loss of 23 cents per share and cut earnings forecasts for the remainder of the year. Analysts polled by Thomson Reuters believe the company will show the loss at an average of 19 cents a share. For more on the retail space, see Professor Jeff Macke's GM's Batteries Running Low.
From the Bull Pen: The spending environment continues to favor the consumer staples sector. Bulls can look to plays like Walgreen (WAG) with sell-stops below the 2oo DMA ($36).
From the Bear Cave: If Saks' comes in better than expected and the shares rally, bears can use that opportunity to fade the stock into the $12 level. Buy-stops can be set above.
For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.
Quick Check Around the World
Asian trading closed with the Hang Seng -1.09%, Nikkei +1.12%, Sensex -0.53%, Taiwan -2.72% and Shanghai -5.34%.
Glancing towards Europe, we see the CAC +0.73%, DAX +0.21%, FTSE +0.36%
As of 8:20 AM EST, S&P futures are higher 3 points to 1302, and Nasdaq Futures are up 6 points to 1971.
A Look At Commodities
Commodities are higher. Crude oil is lower -0.25 to 113.52. Gold is up +8.70 to 794.70. Silver is higher +0.205 to 13.020, and copper is higher +1.95 to 334.25.
The dollar index is down -0.120 to 77.060.
On the Radar
No events on the radar today but click here for the full trading radar.
Happy Monday! Good luck!
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