SPU…the 1st big tgt area is around 1330

NASD…2668, with the big Fibs around 2650

We can still get to these levels, however we put out a warning for the SPU/BONDS late in the day yesterday that we were at # sets that could see a big reversal.

The mid week shuffle is in full swing. The game will now revolve around where the resistance is in the Spu’s and support in the 30 yr.

30 Yr. Bonds…have been my indicator of choice. Between the Yen crosses and the outright support and resistance levels in the Bond Futures, you have a pretty good idea when things can change direction, or at least when things are near term directionally spent.

We’ll adjust our stops after the market trades for a while. The question we have to resolve is whether the 30 yr. can re-test 139.05, which would mean we could see more strength in the Equities over the next day and a half.

Model Trading Portfolio…Current Holdings

………………                               Stop Close             Profit Points

Long QID/Short NASD             29.40                       33+

Short EUR/USD                       131.66 GTC

Long GDXJ                                  22                            23.57/ 24.79/25.88

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.