A.M. Look 5/12/11

For day-traders it will be another opportunity filled day ( pick your poison and your level wisely). Yesterday we bought the 30 year bonds with a 6 tick stop which we thought at the time was the lowest risk side of the Short SPU/Long 30 yr. spread at the time. We want to leave a resting order to take 50% of this trade off at 125.03 ( just shy of the old 2011 high of 125.07).

Everything is being Dollar driven at this point with reversal tops or bottoms in all the major peripheral currencies such as the Sing Dollar and the oil sensitive currencies of the Norse countries. The swings will continue to be violent and one way when they happen ( LEMMING EFFECT TRADING).When instruments bounce at key technical levels they will go the other way in the same fashion ( this is high volatility trading) DAY-TRADERS PARADISE. The biggest single mistake that traders make in this type of environment is to chase direction thinking they will miss something. Trade on your own terms when you can limit your risk. The question every trader should be asking themselves is which swing is the market attempting to complete ( weekly,yearly, multi-year). I.E. Where is the support in the Silver? 32.19? or is the value closer to the 200 day around 29.

OIL..94.14-49 seems to be a good level to trap the shorts today the first time down. The SPU,NASD,AUD/USD have all come down to take a look at the monthly lows from last week. Your strategy should be to sell strength not weakness. Copper has been foreshadowing the Equity weakness. A good close below the 389 level and this sell off will start a whole new leg down.

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