The interesting weekly chart patterns are in the OIH and the XLE ( Oil derivatives). They’re both putting in ORL weeks,however they are both getting into technical areas where we would entertain going long again. We’ll put these two on the back burner for next week.
Equity Indices are all NASD….GOOG…has to close convincingly above 650 and maintain to go much higher.
30 yr. Bonds…let them be your guide. (Bonds are running the show). Just think SPU/BONDS…Stocks up/Bonds down and vice verse. I have 3 upside levels to watch for market reaction. 137.15…Stops above 138 could go as high as 138.11 ( 200 day Mvg Avg.)
Bund…137.67-75. Same scenario….DAX/BUND
Euro….has to sustain above 133 to go anywhere.
Those of you who have kept that last 20% of Longs in the Bonds/TLT….Keep your intra day stops as stated yesterday.We’ll let this play out for a while.
Let the day unfold, the less you do the happier you’ll be.
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.