Today is all about not fighting the flow. It’s the last trading day of the month!
Spu’s…Nasd & Gold are slightly lower on the month.
USD/JPY...80.00 is 1/2 way back on the year…”125.20 is the June Futures #”
EUR/JPY..105.55 is the 200 day.
AUD/USD…is stopping shy of the 50 day mvg avg on the rallies. Closes over the low 105.20’s is needed for more upside.
AUD/JPY…sustaining under 83.38-48 could lead to a re-test of 82.10
ECA… Encana Corp is higher for the past 3 qtr’s. near term buy stops start at 21.29. 24 ish is the first significant multi year fib.
General Comments…
Let the monthly markings play out. The rest of the week will be far more important than today regarding price action and possible directional change.
Front month Silver and Copper is July (N)
Model Trading Portfolio…Current Holdings
……………… Stop Close Profit Points
Long GDXJ 21 24.79/25.88
Long ECA 17.75 21
Short Term View
Cheap rates are driving the chase for riskier assets. We will continue to look for opportunity in sectors or stocks that are laggards. We remain in singles mode. 8-10% trades are great.
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.
NATGAS…We’re looking to buy the Natty @ 1.70.