The directional moves in the currencies are tired.
USD/JPY moved 8 figures is 6 weeks. This is a typical big standard deviation move before some digestion needs to take place to telegraph another move. For me, this is the one that got away this Qtr! We had had it on via CAD/JPY and never got back in.
The Yen and the Yen crosses should be monitored today for reversals in direction. AUD/JPY has a double top @ 80.08, USD/JPY is trying to reverse after electing stops over 84 USD/JPY in early Asia.
30 Yr. Bonds..have just completed it’s big standard deviation move of 8-10 points from the 147 high with the last 3 points in 1 1/2 trading sessions.
The next four trading days will hold the key for the next Qtr of trading. “SPH” stops trading @ 3:15 CDT today, Currency Futures Monday, and Bonds Tuesday.
We have no positions. We will let the board play itself out over the next couple of days, before initiating any new positions.
Model Trading Portfolio…Current Holdings
……………… Stop Close Profit Points
No Current Holdings
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.