EUR/GBP…has been a big mover over the past month. This cross is getting mildly oversold on the intermediate time frames. It’s also 50% back on a 6 year swing ( a big swing). Forex players involved in this cross should monitor the GBP/USD side of the spread for bear traps.

GBP/USD…will have difficulty following through on rallies all the way up to 164. Buy weakness, not strength, if your milking this cross.

SPU/BONDS…NASD/BONDS..we’re “Involved” short the Equity indices/Long U.S. 30 Yr.

General Comments…

We like the general price action of a higher high last night with the commensurate price rejection. Now we need to see some follow through to the downside in the Equity Indices. We are going to keep a very tight leash on this trade! We’re either right or wrong the level…it’s as simple as that.

Don’t get stubborn and married to your trades today. Trade to make Money..Not to be right!

Model Trading Portfolio…Current Holdings

………………                               Stop Close             Profit Points

Long GDXJ                              21                             24.79/25.88

Long SDS                                 15.15

Long QID                                  30.90

LONG TLT                              117

Long ECA                                17.75

Short Term View

We’re looking for the Gold to bottom.

We are placing a resting order to BUY NATGAS @ 1.70 ( Dr. Nenner’s Long term Downside Tgt.)

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!

Take what the market gives you , will be the order of the day.

Trade to Make Money!

Medium Term View…This will be updated next week for the 2nd Qtr.

30 yr. Bonds … 138.00 ish now becomes our macro pivot. Closing above this level would be short term positive the Bonds and negative the Equities. We will look to buy a multi-point break in the 30 for a rally into the fall in keeping with a general risk averse market theme.

Equities…While, we were in strategic buy mode for the first quarter, we now believe the market is fairly priced. The equity indices deserve a break. The operative question becomes, from what level and when can a break develop. We will monitor instruments on an individual basis vs. the general Risk On/ Risk Off correlation we saw last year, when most instruments traded via the theme of the day.

Copper…We’re looking to sell rallies in the Copper against a 377 weekly close. We regard this as an ancillary short to the general Risk Odd theme going forward into late this qtr.

We’ve been doing this 35+ years…I’m hard pressed to recall a year when we haven’t gone back and attempted a re-test of the yearly close in the equity indices at least once. Yes, we are looking for a re-test over the next 5-4- months. Indices can still grind higher to the upper tgt levels over the next few weeks before profit taking ensues.

We are going to be highly flexible this qtr….we are not getting married to a central theme , nor are we getting into the long term prediction business. Having a bias is one thing, being patient and executing with a  defined risk parameter another. Our business is Intelligent Risk Management.

Currencies…AUD/USD continues to be a good risk barometer. 102 is the near term macro pivot! ( This is a multi-year level) 111 is the upside pivot. Anything in between is just that, in between….no break outs! Closes above 105.30 would be deemed near term positive.