USD/CAD…price action under 99.85 should help with a Risk On Board. ( App 100.10 Futures)
OIL…86.65 will be a short term pivot. With a Risk on board, look for 88.60 and then 90.
30 Yr….150.15 should still be good hold level the first time down. Look for this to
line up with the a high in the Equity Indices.
TBT…sustaining over 59.55 should take this to just over 61 for a first stop.
Spu’s…we’d like to see this remain over 1359. 1375 is small Fib resistance with 1380 being the 200 day. Pay
for your trades up here….
1390 is the first major fib resistance matching the 18 day mvg avg. We’re looking to be out of 70% of Risk positions
around this level.
Nasd 100…sustaining over 2555, we’re looking for 2600+-10
Copper…sustaining and closing over 349 should lead to higher prices and bolster the case for a Risk on bias for the entire board.
AAPL…542-48 will be the initial resistance. The big swing should take this to the mid 570’s.
General Comments…
Some of you bought SSO since 54.81 printed in the closing range, however we will not list it in our positions because it did not close above our level.
Futures traders got the ORH in the Spu’s and we assume you took the signal and are long.
You don’t often get a turn in market direction where all the big cap leaders match up at the same moment, Goog & AAPL,
when capital flows were ending,”the residual MOC selling out of London”,RSI’s under 20 ( major oversold), to initiate a Trade!
That’s as lowest risk a set up as you can get.
All our signals are taken and confirmed off the Futures or Cash. This makes the Etf’s problematic for 2 reasons:
They do not always track and they do not have long enough trading hours.
Model Trading Portfolio……………..
Stop Close Profit Points
Long Feb AAPL 550/575 call spread
Short Term View…
Short Term trend has been down in the Equity Indices…(Risk Off).
We initiated Risk Positions off Friday’s low. We’ll look to lighten up those holdings on a rally
and see how this shakes out over the next couple of trading days.
Medium Term View… updated qtrly
These are static levels that do not change.
30 Yr. Bonds …150.15 ish is our short term upside pivot. Closing above this level would be short term positive the Bonds and negative the Equities. Closes below 145.20 will be needed for another leg down in the Bonds. Short term we have held and we will continue to favor the short side of the Bonds when market conditions allow.
The Spu/Bond spread has been running the show all year.
When the markets trade Risk Off the Bonds will be the vehicle of choice to receive those outflows from the equities. Meaning, you have to be very patient with your sell levels in the Bonds. They can still get priced to very low yields with the help of investor sentiment and Fed meddling.
We will be monitoring the Bonds for a breakdown in the existing correlation. “Long Equities=Long Bonds” going into the fall. So far the Bonds have been a better indicator of Risk aversion.
Equities... last qtr had us looking for a trip to last years close (1250) and we came close. This qtr we’ll use 1462 close as our upside closing pivot.
Gold & Silver…the June lows now become extremely important support levels. Both metals have been used as the long side of the spread against Short Euro & Aussie. Investors have been buying Dollars and then purchasing Precious Metals with those dollars.
Currencies…
AUD/USD… continues to be a good risk barometer. 102.25 ish 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. In the big picture the Aussie has completed swing counts in both directions from the 111 high to the 95 level twice over the past 2 years.
USD/JPY…79.22 will be our macro pivot. ( App 126.40 Futures). Look for this level to run the Yen crosses against the Commodity Currencies. Use the crosses as the general risk tools they’ve been all year. CAD/JPY…AUD/JPY up, it’s Risk On. (This correlation is currently breaking down) We will be looking to short the Yen around 130.50 Futures, start looking under 77 USD/JPY for a potential Yen high.
EUR/USD….“119.75” +- 100 pips….is the macro pivot. Any price action the first time into this zone should be suspect ( possible Bear Trap), however closing a couple of days below this level is key to another big swing. This level has run several 20 cent swings in the Euro. It’s a significant area! These #’s are static and will not change. Furthermore, only closes over 131.50 will be price positive.
Natgas…We will continue to strategically look to buy hard breaks. The names will continue to be our preferred way to play the Natty. For the average investor the names provide more liquidity and a user friendly venue for capturing Alpha. 3.00 now becomes the key hold and pivot area for the next qtr.
Grains & Softs…Our long term strategy is to buy 8-10% breaks in the ETN & ETF’s.
Corn.. 7.55 is the macro pivot.
Soybeans…16.50 will be used for our macro closing pivot.
Oil…continues to be a good demand indicator, with failed rallies telegraphing little follow through in the Equity Indices. $78 which is the 50% Fib for the life of the Futures will continue be a key level on the downside and $100 on the up. When the market is Risk On the names here will provide a better trading venue for the average investor.