Is the sky falling? I wouldn’t get too wound up about it just yet.

The current price action around the board in the Currencies,Bonds and Equities Indices are typical for this week going into the end of the qtr.

30 Yr. Bonds...we chose to do the Bond side of the SPU/BOND trade because we could better quantify our risk, and we are all about risk/reward. There are only a few ticks left in the trade we were looking to initially capture. The (M) 30 Yr. needs all new closing strength over 138 for higher. We will send out an updated trailing stop before we head out for meetings later this A.M.

Spu’s…1386..then 1377 are descent levels to trap shorts.

Yen…121 in the (M) Futures…app 82.70 USD/JPY completes it’s latest wiggle.

Euro..131.50 ish will be pivotal for a trade back to 130. Again, we are not getting sucked into chasing this direction.

OIL…by remaining and closing under 106, has the chance to trade back to 104.50, the lower end of the recent range. This is a trade we will not chase.

Gold….keeps stopping at the 1665-70 resistance. Sustained price action and a close under 1626 is needed for a further breakdown.

Copper…this is sitting right on the 200 day mvg avg. All the charts look different, with the shorter time frames looking more vulnerable, however the qtrly shows 37500 as a level that needs sustained price action under for more downside.

We’ve seen the contra trend trades that we were looking for, and we advise patience in awaiting fresh signals.

Model Trading Portfolio…Current Holdings

………………                               Stop Close             Profit Point

Long TLT                                                                    112.60

Short Term View

Location ,Location,Location….if you have a good trad able pattern “Good Risk reward!” You just have to seize the opportunity and see what develops!

Trade to Make Money!

Medium Term View…

30 Yr. Bonds …147 is the all time high in the front month futures. We will watch price action off this level for any potential surrogate moves in the currencies or stock indices. 144.20 ish now becomes our macro pivot. All new closing strength over 145.20 would have us looking for more upside in the Bonds. Closing above this level would be short term positive the Bonds and negative the Equities.

We’re going to be eyeballing a “possible” Long this week via either the 30 Yr. Futures of the TLT ETF. We will be monitoring the Spu/Bond spread to confirm a trad able level. While the markets could certainly turn at month end, the week after could provide the better opportunity. Since we only trade what is in front of us,we’ll wait for a proper setup to initiate.

Equities…We will continue to strategically buy hard breaks in Etf’s and individual instruments we feel have the best risk profiles going into the end of the first qtr.

Currencies…Our view is the Aussie Dollar remains a most attractive investment. The Bonds are high yielding making this currency desirable on breaks. It also has the benefit of the underlying commodity and Asian growth story to support buying the dips.

The Aussie typically mirrors the S&P 500 which also makes it an easy surrogate to trade, whether Risk On or Risk off. It’s liquidity makes it easy to hedge currency risk if you’ve the underlying Bonds, which makes you Long Aussie by default.