Risk off continues with Short Euro or Aussie vs. Long Gold.

Gold and Silver are both lower on the month and extreme care should be taken watching your short term technical levels. The concern being that with the U.S. Dollar strength spreads get legged and they sell the long side out ( which is the metals and use it as an ATM to finance bad stock positions).

OIL..so far we were correct in identifying 100 as the short term key resistance. Large stops should be accumulating under 95.75 ish. A good violation of this level should take the oil to 94.16 and ultimately 90.10 which is a close match with the 200 day mvg avg. This contract has slightly different levels than the previous contract (June)

Aussie…This currency is still doing the Fibs of the yearly swing. 1/2 way back is 103.65. Short term support comes in just below the figure of 104. Look for price rejection the first time into this zone. More importantly AUD/USD hit Dr. Nenner’s downside tgt. last night of 104.40, #’s which I hold as extremely high value #’s!! These are levels I always consider to be a “free out” to see how the market reacts to the level.(you can exit shorts the first time into the # set and wait for sustained action back under to re-sell the position. These tgt levels are high probability LEVELS FOR REACTIONS OR BOUNCES.

The Euro levels have not changed ( 139.65 seeking 139) this is still a place not to press shorts. The most important level in the Euro is now 140.61 which is last months low. A close below this level next Tuesday puts in an downside outside reversal pattern. Meaning that you could have a broader sell off than we have seen. It could just be the beginning. So the closer it gets to month end the more violent the price action will become around this level.

Spu..Elliot Wavers have counts that all come in close to the 1304 area. The bigger war for me is in the low 1290’s where prudent shorts should be covering the first time down. 1290 is the all important closing # for Tuesday, Month End. A close below this level would signal a much bigger correction in the stocks than most people anticipate.

We are currently Long the Gold and have a 50% position left in the JJG. Long term clients are flat Stocks for the most part. Shorter time frame traders are either short the equity indices or have been selling rallies vs Long the 30 YR. Bonds. Tighten up your risk parameters given last night’s Asian session lows in the Spu and the Aussie. Today is one of those days when a good contra-trend move can manifest itself for a day or two.