Crude Oil…. 92.80 is the 50% retrace from the Oct. 2011 low. If you’re short, and we’re not, this is the place to cover.
Euro…resting stops reside just below 128.58. 126.20-50 is the next macro level, which is last quarters low. Major long term mvg avg’s come in around 123 with the major 50% Fib for the life of the Euro @ 121.40. Again, these are static #’s, they will not change.
Copper…appears to be following the same swing as Oil. Intermediate support is @ 35455. 350 is big Fib support and an exit zone for any shorts the first time down.
Gold…shows horizontal support in the low 60’s on a monthly look. Sustained price action below should lead to another 40-50 dollars for a start.
AUD/USD… Sustained price action below parity…98.60 is the next big level with stops below. 95.75 should trap shorts the first time down, however there is some minor support here @ 99.50 first.
USD/CAD…the 200 day comes in @ 100.59 today. Closes above this level is not positive. ( 99.10 Futures was last weeks low)
A.M. Look 1/3/12
Australian Dollar ( AUD/USD)…100-100.30 is the cash level we are using to match up with general Risk On bias in the overall market. Closing below this level, should mirror short term weakness in the stock indices. Remaining above, should have the opposite effect. “It will be a big macro pivot this qtr”. 102.33 & 102.08 AUD/USD are the past 2 yearly closes.
A.M. Look 5/7/12…..the levels remain the same
Nasd 100…the next set of monthly stops are 2575 leading into the 2567 Fib. The next major Fib is 2500+
Spu’s.. the next set of monthly stops are 1338.50 leading into the 1334 Fib.
AUD/JPY…the daily time frame is oversold and 80.35 is half way back for the past 2 years….”when convincingly through” the longer time frames show 79.90 ish followed by 79.40.
General Comments…
We’ve re-posted the macro levels from last week. All of the above are static levels that do not change. Risk assets in general are trading short term oversold…Again this simply means Do Not Sell Weakness….Sell Rallies
Risk assets traded overbought in the first qtr….Now they are trading oversold.
Hamsters…it’s all about trade location and time frame trading. Pick your spots and trade to make money.
You should get opportunity from both sides of the market.
Model Trading Portfolio…Current Holdings
……………… Stop Close Profit Points
No Current Holdings
Short Term View
We have a Risk Off bias
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.