Euro…129.59 is unchanged on the year. This now becomes the macro pivot for more downside.
EUR/GBP…The Pound has been bid vs the Euro, as a safe haven trade within the Euro Zone, since last July. This cross is getting mildly oversold. 7940 ish would be an area to look for directional players to get trapped. This is a multi-year level.
EUR/JPY…103.35-12 is first support. Closes below 102.50 ish and this move can accelerate.
AUD/USD below the 101.25 Fib the levels are as follows…100.30+-…99.50. Closes under 99.50 will lead to a more severe correction
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.
USD/JPY…presently shows a potential double bottom on the weekly and monthly charts @ 79.63.( app 125.65 M Futures) This is the ticket. A level to gauge Risk Appetite. You can use it as a pivot level. There will be stops below 79.60. Closes back over 80.30 USD/JPY (under 124.45 Futures) would be needed to confirm the pattern. More than likely, in this type of Risk environment, you would need some help with a rally in the equity indices for the pattern to hold. Why?…Yen has been the recipient of safe haven currency flows since Mid March. Investors have bought Yen on the major crosses.
Oil…Short term this is very oversold. I’m more than happy to sell it closer to 101, but not down here. 96.55-30 show big mvg avg levels on the daily continuation chart, with the top of the weekly cloud a smidgen under 95. Not a good place to sell weakness! Hamsters… Buy before you sell at these levels .
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.
Spu/Bonds… 9300-33 is the next level to possibly trap directional players.
30 yr.Bonds...anything close to 144.20+- will be tough. Then it can move a point at a time.
General Comments…
We are measuring our Equity indices on a short swing from the DEC. lows. The corresponding Fibs represent a 30% retrace. As a trader you have to recognize which swing the market is trying to follow..This tells you where and HOW it’s going to move.
First things First…Trade the short swing until it proves it’s going to turn into something larger. Trade To Make Money!
Pay attention to your levels and matches…( matches are when multiple markets hit big levels at the same time) one effects the other…instruments do not live in their own world, the world is interrelated.
Model Trading Portfolio…Current Holdings
……………… Stop Close Profit Points
Long GDXJ 21 24.79/25.88
Short Term View
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.