Spu’s…these need to go 1554 bid and close over 1563 for higher. Sustaining under 1543 can see a break to test the lows of Sunday night (1529-31).
Oil…94.00 +- 10 cents is current resistance and the short term upside pivot for higher.
Euro…130.00 is resistance and like the oil needs new price action over this level for higher. 128.75-85 is support.
EUR/AUD…124.20 was important support. Qtrly closing support is 123.70-90.
USD/JPY…95.00 (app 105.30 Futures) will bepivotal going forward. Watch this level for cross direction. Sustaining above this level, look for a test of 106 again in the Futures (94.35-40 USD/JPY).
AUD/JPY…99.60 is the level this cross has to sustain over for higher.
Gold…shows a short term double top on the P&F chart at yesterday’s high with 1597.50 being support.
30 yr...142.20 ish held the bonds yesterday. Today that level could be a s low as 142.02.
General Comments…
Today into tomorrow will be about the 30 Yr. Bonds and how the Equities indices react off the spreads (Spu/Bond). This will peek our interest as we get closer to noon CDT today.
CAD/JPY looks to be the least risky pair to trade today. 92.62 followed by a test, and possible bear trap, into 92 support is next, on the daily charts.
Be patient and await your time frames. Trade on your own terms and do not be afraid to miss something. The next few weeks are always full of opportunity.
FYI…Anytime you wish to look up levels, go to the website (Click on Pro Tips…add the instrument you are looking for in the box…) Everything I’ve written for the Month will appear.
Short Term View…
We are using Monday’s closes ( 12/31/12) in everything for our trading bias for the qtr since all trading is bench marked against these closes.
Use 2/28/13 closes as your short term pivots in everything.
Medium Term View…updated qtrly
This was written the last week of Dec 2012
We’ll be compiling next qtr’s outlook for our paid clients over the next 2 weeks so stay tuned .
These are static levels that do not change.
30 Yr. Bonds …Last qtr. 150.15 ish was our short term upside pivot ( we like this level on a longer term time frame). Closing above this level would be short term positive the Bonds and negative the Equities. This qtr we’ll focus on 148.10 as our short term closing barometer. 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 and we look for this correlation to hold over the near term.
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.
Spu’s... Last qtr we used 1462 close as our upside closing pivot for confirmation of an assault on the 1500 level. 2 closes above 1446 are minimally needed to launch the Spu’s higher this qtr.
Gold & Silver…the Dec. lows now become extremely important support levels and continued closes above the 1660 area in Gold are essential to prevent further profit taking. Silver sets up slightly different with 29.60 needing to hold and sustained closes above 30.70 for more upside.
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 105.70 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 was our macro pivot. ( App 126.40 Futures) last qtr. This qtr we are using 83.30 USD/JPY ( app 119.85 H Futures) to run the Yen crosses against the Commodity Currencies.The Yen has come along way, although we have swing counts that could eventually see the futures trade another 400 points lower, we think this market is in need of an overdue correction and will wait for trading opportunities down the line.
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 under 131.50 will be short term price negative.
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…Our long term strategy is to buy 8-10% breaks in the ETN & ETF’s.
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. We remain friendly to the Oil as long as it maintains above 87.50.