happy new year

First we'd like to wish you all a very happy, healthy, and profitible new year and sincerely hope 2008 is your best trade year ever!

Now that the holiday's are officially over and we've started a new quarter, it's time to get back to work and back to business.

As I told you in my economic calendar update a few days ago, I'm long euro and was buying euros when the market opened up after Christmas. The signs to be long are just too clear right now -- commodities skyrocketing again, dismal USD fundamentals, renewed falling bond yields, dovish and uncertain Fed rhetoric, the list goes on and on...

Today we saw more market insanity as the Dow did a re-enactment of the Hidenburg crash and burn while gold and oil soared to record highs. The Dow's dive pummeled the yen crosses as traders had to further liquidate carry-trade positions to cover equities losses. Speculators drove oil and gold through the roof, trading based on emotional, knee-jerk reactions against U.S. economic fears, inflation fears, and overall financial insecurities.

Normally the Dow nosedive would have brought the euro down with it, but oil and gold were on a northbound train to Cashville, keeping the euro propped up. In addition, the bottom fell out of the 10-year bond, as the bond market dropped to its knees once again to beg the Fed to cut rates at the end of this month.

We do have some key data tomorrow: German unemployment rate, the worthless ADP Non Farm Payrolls, Initial Claims, Factory Orders, and an important Crude Inventories report. I don't see much hope for the USD tomorrow, so I'll continue to stay euro long and buy dips as the market presents opportunities to do so...

Please take care to watch your margin usage the rest of this week, especially as we draw close to NFP. I do not expect to see a lackluster NFP like we had last month... I get the feeling some of the banks are going to have a play this go round...