We finally got a Risk off board after 50 + days of straight up!
Spu’s..1350.25/stops below, “1343 ish-1339” This is where we want to pay for this trade by taking some profits! SDS trades are done off the Futures levels.
SPU/BONDS…9495-9505 is the downside pivot in the spread…watch for market tone!
Euro…will struggle right in here at 131.10 ish, not an area to press direction! Watch the 200 day In EUR/JPY (106.90) for market tone. Staying under keeps pressure on the Euro!
AUD/JPY…85.50 ish can hold. Then it will move 80 points at a time.
AUD/USD…105.55 is the 50 day…natural support the first time down.
Copper……37400 is the 50 day….natural support the first time down.
AAPL..…buy levels…480….443…both should be good for good bounces.
As always, do not press direction in the hole…let the market do the work! A lot of instruments are matching up for interim support.
Model Trading Portfolio…Current Holdings
……………… Stop Close Profit Points
Short Spu’s 1378
Long SDS 15.80
Short EUR/USD 134.10 131.50/130 70
Long JJG 46 48 ish
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 over the next couple of weeks 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.