The Yen crosses told the story yesterday by holding big Fib support. The AUD/JPY,EUR/JPY & CAD/JPY all pretty much tested support at the same time and reversed. So did the OIL and Spu’s.
General Caveat!….We’re honing in on a zone or level we feel is important to the general tone of the overall market when we write. Do not get all wound up about the exact tick. Use the levels to look for price rejection. The AUD/JPY hit…EUR/JPY missed by 14 ticks, Oil overran by 20 ticks, Spu’s fell just shy of 1370.
All in all, the areas basically all matched up at the same time. The match game!
Today..After EUR/JPY ran 150 points off the Fib level last night, we open our screen this morning to see we’ve printed the 105.95 Fib. This should tell you Europe is coming back into the forefront in the news cycles and traders minds. Remember, a weak EUR/JPY is indicative of RISK OFF.
DAX…6590…followed by 6500 ( Fib support)….6300 is where we think this is headed.
Yen Futures…by maintaining above 123.25 this can trade 124.00. This will put in an ORH pattern with a close above 123.25.
USD/JPY ORL level is 80.19, with 80.80 the 50 day mvg avg.
Italian Bonds…look like they want to take a run at 10000 which is another 90 ticks lower. 9989 is the 200 day today. A weak Italian Bond = higher rates = more risk to the Euro Zone= a weak Euro!
These are getting oversold on the daily charts, watch for general market tone vs. the Euro.
General Comments…
AAPL, PCLN, et. al. have been single handedly keeping the U.S. Equity markets afloat. We’ll watch the game play out into tomorrow.
There is nothing to do but leave your trailing stops alone.
Model Trading Portfolio…Current Holdings
……………… Stop Close Profit Points
Long QID/Short NASD 29.40 33+
Short EUR/USD 131.66 GTC
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!
Take what the market gives you , will be the order of the day.
Trade to Make Money!
Medium Term View…This will be updated next week for the 2nd Qtr.
30 yr. Bonds … 138.00 ish now becomes our macro pivot. Closing above this level would be short term positive the Bonds and negative the Equities. We will look to buy a multi-point break in the 30 for a rally into the fall in keeping with a general risk averse market theme.
Equities…While, we were in strategic buy mode for the first quarter, we now believe the market is fairly priced. The equity indices deserve a break. The operative question becomes, from what level and when can a break develop. We will monitor instruments on an individual basis vs. the general Risk On/ Risk Off correlation we saw last year, when most instruments traded via the theme of the day.
We’ve been doing this 35+ years…I’m hard pressed to recall a year when we haven’t gone back and attempted a re-test of the yearly close in the equity indices at least once. Yes, we are looking for a re-test over the next 5-4- months. Indices can still grind higher to the upper tgt levels over the next few weeks before profit taking ensues.
We are going to be highly flexible this qtr….we are not getting married to a central theme , nor are we getting into the long term prediction business. Having a bias is one thing, being patient and executing with a defined risk parameter another. Our business is Risk Management.
Currencies…AUD/USD continues to be a good risk barometer. 102 is the near term macro pivot! ( This is a multi-year level) 111 is the upside pivot. Anything in between is just that, in between….no break outs! Closes above 105.30 would be deemed near term positive.