AUD/JPY…has been a good short term barometer of stock strength. 8500 is the 50 day. watch for general market tone.
USD/JPY… along with the YEN crosses are doing re traces from the beginning of Feb. , 122 ( M Futures +) App 82 USD/JPY should prove to be over extended the first time into the area.
Copper…377 is the 200 day today. A close below 376 would be deemed negative. 360 ish is the next good Fib. support.
SPU’s..show 1404-5 is the area needed to sustain above for more gains.
NASD…2775 is the only level that matters to me in the near term for price rejection ( resistance).
General Comments…
We’ve seen a lot of Yen repatriation via the crosses over the past couple of trading sessions which is consistent with a risk off board. Given the distance traveled last night coupled with the retest of yesterday’s lows in the equity indices, should have the Bears wary.
I’m sure they’ll try the Indices both ways today. Be patient and wait for your levels. It generally takes more than one days price action for a market to change direction.
Model Trading Portfolio…Current Holdings
……………… Stop Close Profit Point
Long 30 Yr. Bonds 137.19 139.13 OCO…GTC…All Session Resting Order
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.