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Two Ways to Play: Trichet Supports CDS Market Regulation


Strengthen your portfolio in good times and bad.

Since the financial crisis in 2008, regulators around the world have been looking for a way to reign in speculation in the CDS market. Early this morning the group added another member as Jean-Claude Trichet, president of the European Central Bank, gave his support for regulation in the CDS market.

According to the Financial Times, during a speech at a Brussels-based conference on bank crisis management he said, "Certain financial instruments, which were introduced in consideration of their positive effects for the hedging of risks, should not be misused in a speculative manner." Trichet believes that a centralized clearing facility would help reduce the incentive to take "excessive risks."

No matter your opinion on the issue, regulation in the CDS market seems to be right around the corner.

From the Bull Pen: The daily chart of Apollo Group (APOL) shows a large gap down from back in October. The stock now looks like it's going to attempt to fill that gap. Those bullish can buy the stock with a stop loss at $62.

From the Bear Cave: US Steel (X) has had a nice run up but, unlike the market, it has failed to score new highs. The stock has pulled back over the last two trading sessions. The stocks looks like it could pull back to its 20-DMA. Those bearish could short the stock with a buy stop at $62.50.

A Quick Check Around:

Asian trading closed with the Nikkei 0.75%, India 0.34%, Hang Seng 0.19%, Shanghai 0.71%, and Taiwan 0.15%.

Across the pond, we see the FTSE 0.73%, DAX 0.36%, CAC 0.59%, Swiss Market 0.28%, and Stockholm 0.62%.

In commodities, crude oil -0.58 is trading to 81.96 while gold is trading -6.30 to 1121.20 this morning.

A quick check of the EUR/USD -.0039 to 1.3568 and the USD/JPY +.15 to 90.51.

On the Radar Today:


No economic events scheduled

Global Economics

12:30 Japan All Industry Index
03:00 Germany PPI
07:00 Canada CPI
08:30 Canada Retail Sales


Before: PERY

Good luck today!
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No positions in stocks mentioned.

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