More of the same today…Equities indices remain bid on the breaks, with the Yen crosses continuing to hold technical re-trace levels confirming the directional capital flow has yet to change.

CAD/JPY…84.10, AUD/JPY…87.30,EUR/JPY….110.25…price action under these levels would be needed for a market turn.

SOX…43863 becomes an increasingly relevant level for the Semi’s the closer to month end we get. The potential pattern is for an ORH Month.

30 Yr. Bonds/TLT...yesterday had us nibbling on a small long. Today will be the day to determine whether it goes in our favor.

Game Plan…

The downside risk looks to be about a point. The first initial swing up if we’re correct should be just a little over a point. We nibbled yesterday because we think this trade is overdone directionally on the downside and we’re looking for a bounce.

We’ll likely add to this position just before 12:00 CDT. Then we’ll look to lock in 50% of the trade on a point rally in the Bonds, after which all stops should be raised to break-even.

Then we’ll see if the market maintains and we can get a higher tgt.

Typically, a Long Bond position would mean we’re looking for an Equity Index break. We’re not going to make that leap this time. We are not selling the Equities, merely buying the Bonds for a trade.

Model Trading Portfolio…Current Holdings

………………                               Stop Close             Profit Point

Long TLT                                                                    112.60

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.