Tomorrow will be about the metals as usual with the unemployment data and where they hold on breaks. I find myself somewhat optimistic that they are looking weak going into tomorrow.
The Dollar is bid across the board, in particular against the Kiwi.
Short term traders…Trade what you see today. It will be a day to use your short term technical s.
General Comments…
Last unemployment, the Spu’s were trading @ 1394 and the 30 yr. @ 137.25 before the #. A month later, the Equity Indices have gone nowhere with the Bonds up 5 points.
Investors that bought JJG and a few of you did, we’ll review the technical s on a close below 46.
Model Trading Portfolio…Current Holdings
……………… Stop Close Profit Points
Long GDXJ 21 24.79/25.88
Long ECA 17.75 21/24
Long DBC 28
Long EWZ 60
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.