Nasd 100 Futures..In the 3/2/12 A.M. Look we said, “We wouldn’t be surprised to see a 2800 Nasd”. In fact, they look to be on a mission to print 2839, a move 10 years in the making. This is a full 50% retrace from the 2000 high to the 2002 dot com low.
The Nasd is encroaching on a 500 point Qtr. In 2008 we had two Qtrly moves this big and they were both back to back down. Prior to that, you have to go back to the beginning of the millennium. Yes, there are potentially higher tgt’s, however this would be a good level to re-evaluate your holdings and tighten your risk parameters.
One major level at a time…This is a big one!
Platinum…has closed back above the 50 and 200 day Mvg avg’s. The 50 day is “Attempting” to cross back above the 200 day, a technical indicator called a Golden Cross. A successful completion of this pattern would be considered a near term bullish sign for Platinum and a general Risk On Indicator. Sustaining closing prices above 1675-80 should lead the way for broader gains.
Copper…held the 200 day on Friday on a closing basis for the second straight day, followed by a close yesterday back above the 50 day. Price action above 39150 will elect all the near term buy stops.
BKX…maintaining price action above 4950 is positive.
GS…our upside levels are 129.77 & 135.
SOX…is trying to put in an ORH month with a close over 43846. Monthly buy stops rest @ 45124.
General Comments…
The picture being painted is for potentially more risk on, however the Spu’s and Nasd are coming up to long term tgt. levels that have to be honored. Price rejection would be normal the first time up into these zones. The Million Dollar Question is How Much? Let the board play out and don’t fight the flow..
You can see that instruments continue to be highly correlated. We believe the Lowest risk strategy for top picking in the Equity Indices is to buy the hard breaks in the 30 Yr. Bonds.
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…This will be updated next week for the 2nd Qtr.
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.