Spu’s,Nasd,Russell,& Midcap…all put in ORH days.
Resistance…
Spu’s…1427-32
Nasd…2700-15
Russell…815-19
Gold, Silver, Platinum & Copper…Yesterdays lows were all good. They held their general support zones
Oil…is still trading in a five dollar range and held the bottom of the range on the P&F charts.
AAPL & GOOG …both held big support. AAPL @ 598-600 is next.
GOOG…resting stops over 688 can lead to 705
General Comments…
For new and old clients I suggest clicking on the glossary tab below and reviewing the definitions
of Full Moon Trading & Mid week shuffle. Yesterday was a classic example.
The chart patterns are all following thru this A.M. and it’s our belief that we’ve seen the low for the rest of the year.
Of course you can get some good breaks, however the tone and direction are up again.
Buy hard breaks when given the opportunity, we’re a long way off yesterdays lows and buying rallies is not advised. Buying hard breaks where you have a defined out will be the best strategy.
We’re looking for a 2 way trade, meaning the market should stop at identified resistance. We aren’t looking for a lot of
price separation from these levels. Plungers will get their opportunities at these resistance areas, however we are not looking for this
direction to change for a while. Take what the market gives you!
Everybody is busy telling me where the market is supposed to be, both Bulls and Bears.
Time to start trading the price action and what’s in front of you, You’ll make more money between now and year end.
A.M. Look 11/28/12
For now the Equity indices are trading into Zones that can hold, with investors willing to buy Treasuries
rather than selling the Equity Indices into these zones.
Time Frame Trading …..let it play out.
Reality Check…Last months close in Nasd is 2640.50 & Spu’s 1406.75.
Be aware of where the market is trading with month end Friday.
Model Trading Portfolio……………..
Stop Close Profit Points
Long Feb AAPL 550/575 call spread
We’ve taken profits on all outstanding S&P positions and are now
down to a 20% Long weighting in AAPL as of 11/19/12 NYC close.
Short Term View…
Short Term trend has been down in the Equity Indices…(Risk Off). It has decidedly turned up.
We initiated Risk On Positions off Friday 11/16/12 low. We’ve taken the bulk of those profits.
We’re looking to flip these positions and our bias for a short trade on a spike in the Spu’s over 1400. This scenario has been played out.
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.