Energy contracts expire today. Both May Oil & NatGas stop trading today.
We’ll start to pay attention to these instruments for opportunity.
Euro…there are resting stops over 132.14. A close over this level puts in an ORH weekly pattern.
EUR/JPY…is attempting the same ORH pattern with a close over 107.51.
Spu’s…1375 is the 50 day mvg avg and a pivotal level on the Point & Figure charts.
General Comments…
The good news for short term traders is that volatility seems to be back.
The bad news is that the indices seem disconnected from the price action in the underlying big cap instruments much of the time.
EUR/JPY might have another figure to go, however we’re staying away from this trade. Meanwhile the GBP/USD ( British Pound) has been quietly grinding higher. The Pound and the Pound crosses will be put back on our radar screen given the expected inflows into Britain over the summer with the Olympics.
Model Trading Portfolio…Current Holdings
……………… Stop Close Profit Points
Long GDXJ 22 24.79/25.88
Long SDS 15.15
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 Intelligent 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.