The whole board is an area specific Lemming Effect scalp. We’ve retested the major hold levels in the Equity indices once again yesterday as well as failing to remain above the 200 day in the S&P 500 Futures Tuesday into Wednesday. Caught in the Middle..

Today will presumably, be thin trading with a U.S. baking holiday…We’ll see.. The bank traders are all chained to their screens! Who’s Kidding who?

30 Yr. Bonds… 143.04-10 is resistance…Interim Support is now the low 140’s…This instrument is an area specific scalp. Day Traders should minimally be looking for at least a point to initiate a trade..look to the SPU/BOND spread for juicy extremes…..

Do not trade in the middle in any instrument…wait for the extremes..you’ll see them, they’re just a rumor away! Match up your levels with other instruments….early yesterday EUR/JPY @ 106 capped the equities for the early sell off.

Day Traders…pick a side and an extreme.( A level you really love) Chasing direction, thinking you’re going to miss something, is the worst thing you can do in this market.

Pay attention to your time frames..IMM opening, NYSE Open, London close ect. These are obvious times to look for directional capitol flow.

The precious metals (GOLD) have caused us great consternation. Being off a day on timing, which caused us to sit through a $40

break was not fun. Fortunately we used a Stop Close and are still alive and Long. We’ve installed our own private vomitoria to sit through the volatility.

Our portfolio bias looks like it will take into next week to play out. Short term guys, be patient and take what you get early.

Model Trading Portfolio…Current Holdings
Long SSO
Long TBT
Long S&P 500 Futures/Short 30 Yr. Bond Futures.
Long Gold Futures/ and or/ GLD
All stops are as previously stated.

All trades have been paid for. Meaning, we’ve taken partial profits. Whether or not we get stopped out,
we still make money.

We’re very small in the SPU/BOND trade. In fact this is one of our smallest positions all year.
Our view is that the rest of the year will be a high volatility, highly technical, rumor driven, Time Frame, Lemming Effect Day Trade.
The question is who’s day? Right now it’s Europe’s.

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…we’re looking for strength through year end.

30 Yr. Bonds …I’m treating 147 as the high for a long time. 143.10 now becomes our upside pivot. Closing above this level
will be short term positive the Bonds and negative the equities.