Market Update 28 Sep 2012 – EUR, TLT and Cotton

The Euro fell again this week to another record low of 22.56 mg, before recovering slightly to close down 0.3% at 22.60 mg. For the YTD, the EUR is down 11.6%.  The USD and JPY rose slightly (0.5% and 1.2% respectively), while the CAD was little changed, down 0.1%.  The USD remains very close to its Half Life curve, ending the week 2.7% below the predicted value.

Cotton, the biggest loser for the week, continued its slide, setting a new record low of 12.1 mg/lb, down 3.5%. Other weak asset classes include the HUI gold stocks, down 1.8% and the Nikkei index, down 1.4%.

Once again, TLT, representing the long term US treasuries, was the strongest performer for the week, rising 2.7% to 2.18 g. Although TLT has been recovering, it is still far from resuming it's uptrend of the last year, sitting below its 200 day moving average, which suggests resistance at about 2.27 g. If that resistance is tested and holds, it could provide a good opportunity to short the long bonds.