When trading becomes emotional and not fundamentally driven,
instruments can go a lot farther than you think.
Many fundamental traders have been taken out on stretchers to the poor house while mumbling that the markets should not have traded like they did.That’s why they are called futures. There are a lot of potential scenarios that can play out with many moving parts.
The Oil Sheiks hate the Iranians and the Fundamental Islamist s.
Now that Iran has upped the anti on Syria you can bet that any planning for action will encompass the Israeli & Saudi agenda of taking out Iran’s nuclear capability if they don’t stay out of it.
Putin is a thug and a bully. He could very well go down in history as one of the world’s greatest mafioso.
O’Bama is not a shrinking violet and has demonstrated his willingness to act if pushed. My view is that he is just thoughtful about it and if he acts, it will be all encompassing.
What does this mean for the markets? Since Secretary Kerry’s press release late yesterday afternoon it’s been knee jerk ” Risk Off”
Markets can get very out of whack when they turn into an emotional event trade. These are war #’s. They are not short swing levels and are not meant to scare you. The markets don’t have to go any further than they have just gone.These are just levels you should keep on your desk for reference in case of that occasional Black Swan event.
30 Yr….a 133.30 print is needed on the very long term point & figures for a reversal. When markets go Risk Off the world will be looking for cover in the U.S. dollar and therefore our Bond markets.
Big swing fib retracements are 137.15 with 139.24 being the least risky sell level on a complete market meltdown.
TLT…110.63…133.18 is the low risk sell level. 107.63 is the 200 day mvg avg and closing over this level would lead to higher prices
Yen…when markets go Risk off the Yen catches a bid like it is doing now. 91.90 is the 50 week mvg avg.(108.80 Futures).
Oil…116.50 is possible.
Equity Indices…unchanged on the year. 1465-75 is the buy level here.
SPY’s…app 147 and then 139.
If you don’t have them in front of you, if indeed it gets nuts, you won’t have time to react or seize a major opportunity on an emotional sell off.The above are levels where you should not get run over initiating a trade against the flow, particularly if it happens fast it should prove to be an immense opportunity to reload with a major long portfolio.