We are in wait and see mode early. Today, Currency futures expire @ 9:15 CDT.
30 yr Bonds (H)…138.16 is the 200 day ( early resistance). We’re looking for these to have a rally this week, but Wednesday could be the better day. Again, this will be off the Spu/Bond spread. We have not decided whether we are just looking for a test of the 140 level, or a more significant move. ( Will this be a just wiggle better suited for the short term trader?) This will be on our radar all week!
Yen crosses….closes under 108.99 EUR/JPY..87.64 AUD/JPY would be needed for ORL days. This would be indicative of Risk Off.
Spu’s & Nasd futures need all new strength or weakness outside of last night’s range for a new signal.
Oil…108 is short term resistance.
Gold…has been stopping at 1670 ish resistance. New closing weakness under 1626 will lead to a good sell off.
General Comments…
The quandary this week will be the price action in the Aussie vs. the Bonds. One of them will be a true indicator for further follow through in many instruments. We should have a pretty good idea over the next couple of days which one will lead.
Model Trading Portfolio…Current Holdings
……………… Stop Close Profit Point
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 this week 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.