The Boom Boom man’s exit (Berlusconi) is certainly unsettling the markets.
If this were the 70’s I’d be looking for the scotch tape to paste another sheet of graph paper to the bottom of my Italian 10 yr. Bond chart. Long Bund/Short Italian is the game to watch. This spread is running the entire Risk Off Board since London’s opening Bell.
Yra nailed this price action in his piece last night. New clients, this is on the required reading list! http://yrah53.wordpress.com
The mid week shuffle is in full swing with a Full Moon tonight into tomorrow. This is a classic time for violent price action with trends attempting to change direction.
Euro… 136.25 then 135.80 , S&P 500 Mid 1230’s, Crude 95.23 ( this is a big closing level for Oil) are all possible hold and rebound areas.
AUD/USD…Holding 102.03, has the potential for a double bottom on the weekly charts. Sustained price action through this level could lead to another 100 + points to the downside…watch for market tone. The Aussie is a great risk barometer.
Long Gold/ Short Euro is still working big. As the Europeans buy dollars they, in turn purchase Gold (a hard asset).
We’re looking to pick up ( BUY) some Gold and Silver today, for a hold into next year. Those of you who are already long, we’re looking to add.
Model trading Portfolio…Current Holdings
Long SSO
Long TBT
Long S&P 500 Futures/Short 30 Yr. Bond Futures.
All stops are as previously stated.
All trades have been paid for. Meaning, we’ve taken partial profits. Whether or not we get stopped out, we still make money.
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 want to see the S&P 500 Futures hold this 1206 ish level on a closing basis or we will reevaluate our view.
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.