We used Equity market weakness and Bond strength yesterday to get back into a Risk On bias.

I know many of you were looking to buy Gold, and did so in the 1680’s. For those of you playing this instrument, use a 1680 stop. There is no reason to lose money on this trade. Wait it out and see where it goes.

We’ve stuck with the script and followed our game plan. We have a very low risk profile. ( Cheap Look) Now we have to give the market some time to see if we are correct in our assessment.

Proper trade location=tight risk management.

Futures vs. ETF’s….last night provided yet another example of the advantages of trading Futures on a major Exchange. The S&P 500 Futures rallied to the level to pay for your stops. With the Futures you can leave resting orders in 24/7, they just keep rolling over if they are put in GTC ( good till canceled). ETF’s only trade the NYSE session.

“Pay for your stops just shy of 46 in this ETF…Sell part of your longs to pay for your stop. Trade for free! Futures traders…This level should line up with 1237-1243.”

Model Trading Portfolio…Current Holdings

Long SSO

Long TBT

Long S&P 500 Futures/Short 30 Yr. Bond Futures.

Long AUD/USD…..This trade was paid for on the late afternoon rally of 11/1/11 @ 103.80 AUD/USD

The TBT and the SSO did not quite get to our levels to sell for a free trade yesterday.

All stops are as previously stated.

Medium Term View…

Our medium term view is that the Equity markets have put in a bottom for the next few months at 1070 SPU. We want to see the S&P 500 Futures hold this 1206 ish level on a closing basis or we will reevaluate our view.

Metals…Looking for weakness into the first week of Nov. Then, if the technicals agree, we’ll re-purchase the metals for a longer time frame portfolio buy and Hold for our private wealth clients.

30 Yr. Bonds …I’m treating 147 as the high for a long time. We’re looking to sell big rallies for the foreseeable future. This includes hedging strategies for our private wealth crowd that have Bond Fund exposure.