EUR/JPY…is a key feature of the board. This cross put in a ORL day on Friday right into the 200 mvg avg and is following through to the downside. 104.40 ish…then 103.50 are the next support levels. As long as this cross remains under last nights high, expect the Euro to remain vulnerable.
EURO…elected the stops under 130.04,129.50 then 128.80 ish are the next near term support levels. The Euro is a cross trade against the Yen, match it up with your technical levels in this cross.
GOLD…price action below last night’s low will likely lead to another 20 dollars of downside
Copper…353-350 is the next support. As always, these are levels to expect a bounce, so do not sell weakness into the zone the first time down. Short Copper is a Risk Off trade that we have added to our medium term view. Look to Sell rallies when the Spu’s hit significant resistance areas.
Spu’s…need above 1375 or below 1360 to move out of this area.
30 Yr. Bonds…shows a double top on the point & figure charts @ 141.25 ish. You need new price action above this level for more upside. This level will be a key driver in the SPU/BOND spread.
General Comments…
The board has been a technical trade…Trade it as such. Sell rallies in all risk assets until we get into profit taking support levels. Then, take some money off the table and wait for the next rally to sell.
Model Trading Portfolio…Current Holdings
……………… Stop Close Profit Points
Long QID/Short NASD 30.40 33
Long SDS/Short Spu
Long GDXJ 22 23.57/ 24.79/25.88
Long Gold 1645 1st / 1695-1705…1740’s
Short Term View
We’re looking for the Gold to bottom.
We are placing a resting order to BUY NATGAS @ 1.70 ( Dr. Nenner’s Long term Downside Tgt.)
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.
Copper…We’re looking to sell rallies in the Copper against a 377 weekly close. We regard this as an ancillary short to the general Risk Odd theme going forward into late this qtr.
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.