It’s Qtr end. We are not going to initiate anything new today. We have a small position, Long the QID (Short Nasd 100 Futures). For Now, we will leave the stop alone.
The Long TLT/30 Yr. Bonds has been working nicely. Some of you mentioned you took partial profits yesterday near the 114.40 level in the TLT. Any prints in the 30 Yr into the low to mid 139’s is a good place to be out of 2/3rds of this trade.
The levels have not changed. This instrument has given us 80% of what we were looking for. Try not to give it all back. A close below 138 (M Futures) will have us close out the remainder of this position.
We generally trade the chart patterns that are presented to us with tight stops at key levels, however the model work shows no clear indication of an Equity Market ready to turn. This can take another 2-4 weeks to develop.
Let the board and the qtrly markings play out. The long term players that wanted to book profits in the equities, already have over the past two trading sessions.
Late day, it won’t take much buying to mark up the Equity Indices. The later it gets in the day, the more dangerous it will be to short.
MCP…a close today over 32.24 puts in an ORH Month. 34.94 is resistance with stops above. I am only mentioning this because so many of you guys love to swing trade this.
Model Trading Portfolio…Current Holdings
……………… Stop Close Profit Point
Long 30 Yr. Bonds 137.19 139.13 OCO…GTC…All Session Resting Order
Long QID/Short Nasd 29.80 30.70/32 +
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.