Today, being Unemployment, will put the metals back into focus.
Gold…1662-75 which is around the 200 day is the lowest risk buy zone. This will be a price action trade for Day Traders.
The early game will be to see if 1695 holds the first break. They will need over the 50 day @ 1736 to extend higher.
Silver…this is still basically in a $1 range on the P&F. With Stops under 31.50 and over yesterdays high of 32.70.
30.90 is the 200 day, with all the weekly avg’s and the 50% Fib for this last swing coming in around 30.75, making this the lowest risk buy zone.
AGQ…49.50 is the 200 day with 47.80 being the lowest risk buy zone.
Nasd 100…the 1st fib resistance level is 2708. The key to the trade will be to see if this holds a break
@ the 200 day around 2660 if the markets sell off after the #.
Spu’s…1429-32 are where all the mvg avg’s converge. Bulls will want to see 1416 ish hold on any break after the #.
Sustaining over 1434 will lead to more gains.
30 yr. Bonds…149.12 is the weekly high and also the qtrly close. “Big Pivot!” 148.08-10 on the downside – a few.
Canadian Dollar Futures…have a potential Monthly double bottom @ 99.75 ( app 100.15-20 USD/CAD).
This will be a good risk indicator. A hold and it’s Risk On. Sustaining below would not be price positive.
General Comments…
In the Equity Indices, we would look for an early rejection at the stated resistance levels the first time up. Then the Bears
will need some price separation from the level ( meaning a descent break) to stay with new shorts.
Again, we’re saying that we would NOT buy an initial pop off the # into resistance the first time up.
There is plenty of wiggle room into the resistance zones in both the Nasd and the Spu to be patient buying strength.
Any way you cut it, it’s about how the indices hold up on a mediocre #.
The metals will be all about how and where they hold a break. Typically, if the Metals are to stay firm over the next few weeks,
whatever early low we see this a.m. on an initial sell off needs to continue to hold.
We know many of our East Coast clientele are still without power or connectivity.
Feel free to contact us if we can help in any way.
Model Trading Portfolio……………..
Stop Close Profit Points
Long TBT 59.30 69
Long Spu 1455/75 Nov. call spread
Profit areas have been hit. Investors should have reduced positions. Small core longs should be left in TBT.
Short Term View…
Let the price action dictate your actions.
Medium Term View…
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.
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.
