The markets are living in a technical world.
Gold…retested it’s Friday ORH break out last night and held for now. The point & Figure charts show, by not sustaining above this area, it is vulnerable to further sell offs. It still needs to sustain above 1715 and then 1728 for higher prices.
Euro…probed the Fib zone we’ve been speaking about for over a week and stopped. It remains hostage to the EUR/JPY cross.
Oil…105.60 ish is near term support on the Point & Figure. 104.30 is Fib Support. 102.30-50 is still the low risk macro buy zone. All new strength over 107.50 is needed for higher prices.
Spu’s…1364-65 (H) will be pivotal.
NASD...it’s all AAPL. AAPL sustaining above 550 will lead to another swing up in prices.
Model Trading Portfolio…Current Holdings
……………… Stop Close Profit Points
Long EWH 17.30
Short EUR/USD 134.10 130.00
Short Term View
Location ,Location,Location….if you have a good trad able pattern “Good Risk reward!” You just have to seize the opportunity and see what develops!
Trade to Make Money!
Medium Term View…
30 Yr. Bonds …147 is the all time high in the front month futures. We will watch price action off this level for any potential surrogate moves in the currencies or stock indices. 144.20 ish now becomes our macro pivot. All new closing strength over 145.20 would have us looking for more upside in the Bonds. Closing above this level would be short term positive the Bonds and negative the Equities.
We’re going to be eyeballing a “possible” Long over the next couple of weeks via either the 30 Yr. Futures of the TLT ETF. We will be monitoring the Spu/Bond spread to confirm a trad able level. While the markets could certainly turn at month end, the week after could provide the better opportunity. Since we only trade what is in front of us,we’ll wait for a proper setup to initiate.
Equities…We will continue to strategically buy hard breaks in Etf’s and individual instruments we feel have the best risk profiles going into the end of the first qtr.
Currencies…Our view is the Aussie Dollar remains a most attractive investment. The Bonds are high yielding making this currency desirable on breaks. It also has the benefit of the underlying commodity and Asian growth story to support buying the dips.
The Aussie typically mirrors the S&P 500 which also makes it an easy surrogate to trade, whether Risk On or Risk off. It’s liquidity makes it easy to hedge currency risk if you’ve the underlying Bonds, which makes you Long Aussie by default.