Biotech Values

[wallstarb]

The market has been propped up for the last 3 weeks by the new carry trade where people short USD and invest in just about anything else (aka the USD carry trade) This trade was VERY heavily overloaded and today EURUSD broke down – we can expect at least a few days unwinding in this – as they cover USD and sell their commodities and stocks.

Key support levels in EURUSD are 1.4742 and 1.4603  both of these are moving averages so by the time it bottoms in a few days/weeks and tries to bounce those #’s may be a bit higher.

S&P broke key support in the 1072 area, for the last 2 weeks we have been making lower highs and lower lows – if we follow 2003 like we have been we can expect to see a TEST of the 50 dma (possibly a little lower) in the 1044 – 1048 area.

When these areas are touched it may be a decent trade to sell some volatility by shorting some puts or shorting VXX – VXX should have resistance in the $50 - $51 area and after the panic selling this week subsides should get back to $40 area by the first week of November.