Last night was all about the Yen and the commensurate crosses. Once again the markets were wrong footed and the BOJ has shown how adept they’ve become with their intervention timing. The lemmings are running wild.
AUD/JPY, usually a very reliable leading indicator for Risk trades, was the laggard last week, failing to telegraph a potential outside reversal higher month. The cross going up is usually an indicator of firm equity prices. The cross either needed all new Aussie strength over 107.66 or massive Yen Weakness to propel it. Thursday it was almost 2 figures shy of the outside reversal mark
Closes today over for 77.86 USD/JPY ( under app 128.44 Futures)….AUD/JPY over 83.29….EUR/JPY over 110.98 will confirm the stock index patterns of the NASD,SPU,RUSSELL,& MIDCAP 400
I started writing this piece last night when AUD/JPY was through it’s number sets ( above 83.29). AUD/JPY in now back under it’s closing level and USD/JPY is sitting right on it.
We are still looking to buy hard breaks in the stock indices through today. Per usual the equities are the tail end of the dog! ” The Currencies have been leading and usually do!”
It’s Month End, be patient and take what the market gives you.
Model Trading Portfolio…Current Holdings
No positions
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’ve been waiting for the past few weeks to re-load our longs around the 1163-71 area, based off the front month S&P 500 Futures, for a rally into year end. Now the two buy levels we are looking at will be much higher, 1248 ish and 1215. It looks like the 1160’s will have to be filed for future reference.
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.