Monday Play Book

The weekend is usually a time I catch up on my research and try to get a feel on how the U.S. markets will open Monday morning 9:30 est to start the week off( although a debatable issue it can be argued that Monday sets the tone for the rest of the week on how the market will perform). If you've been reading my last few posts you would know on how important this week will be with the Fed's FOMC meetings and other important economic news coming out. I have been analyzing different ways to play the market this week around these events. Two things I have my eyes on are energy and gold. For energy I am looking at USO, DUG(contrarian energy plays to one another), DZZ, DGP( contrarian gold plays). Both of these plays will be effected by the monetary policy decisions that will come out this week. According to CBOT, traders are expecting a 75% chance of a 25 basis point cut by the Fed to 2.00 Fed fund rate. However, there is a possiblity some economist say that the Fed will do nothing. I happen to be one of those economist. A newswire from Bloomberg published today 04/28/2008 commenting on the rise of financials about the believe the worst of the U.S. financials credit problems are over. If this belief is confirmed in market data our central bank analyzes, there may very well be a pause in interest cuts to see how the market reacts and a refocus on inflationary concerns which can bring the rise in oil prices and gold to a halt and possibly some retracement. I will be keeping in eye on CBOT reporting up to the minute to better gauge the possiblity of either event occuring but altogether what ever happens its going to effect the markets until the Feds next FOMC meeting later on this Summer.