The past 2 unemployment reports have marked a high in the Stock Indices and a low in the Bond Futures. Unemployment Fridays always become big inflection points for the Gold & Silver, generally marking significant highs and lows on increased volatility.
Unemployment “the early show” should provide an interesting set up to the ISM release @ 9 CDT, which is always a big market mover.
JJG…43-42.50 will be a level we’re looking at for support. This is where the last 25% rally materialized from in the beginning of Jan.
Crude Oil..last month was an ORL. The swing we seem to be following is from the 2008 low. 1st Fib support is 83.31-82.75. Only closing recovery over 86.50 will be a sign of bottoming.
Midcap…91240-90960‘s is where the big Moving average’s come in.
Spu’s….the same avg’s converge @ 1280 in the pit, however the all session starts a little higher @ 1285. 1252.60 is the yearly close.
Nasd…stops below 2465…200 day 2430
AUD/USD…the levels coming down are as follows…96.64…95.74 Fib support ( 1/2 way back for the past 2 years),then 93.91 which would match up with the eventual swing count tgt.
USD/CAD…104.75 ( App 95.50 Futures) ….105.85 ( app 94.50 Futures)
USD/JPY …held the 200 day on the break last night @ 78.65. This will continue to be a key driver in the crosses.
Platinum…1388.70 was the low In January that led to the Risk On rally. There will be stops below. The next Fib support is 1341.50. I’m mentioning Platinum because it’s mirrored ( Spu’s). Watch for market sentiment.
30 yr. Bond Futures…above 151.15 we’re headed to the higher tgt’s mentioned. Since everyone seems to expect bad news today, anything deemed neutral to constructive can send the 30 yr. into retrace mode. Point & Figure support comes in around 148.20 for starters, then expect it to move a point at a time to 147.20
General Comments…
I wrote the downside since all the markets are in a downtrend except for Bonds which are in a massive uptrend.
My 20% stake in the TBT @ 15.44 is a Risk On bet, which doesn’t look so hot at the moment. Again I viewed this as a low risk contra trend bet given we’ve moved up 8 points a month for the past 2. I thought we were do for a reprieve. We’ll soon find out.
The cons for looking for a reprieve before the end of the qtr., here is a little perspective. 4th qtr 2008 the 30 yr. rallied form 112 to 142. last summer we had a 22 point qtr to the up starting in June. This qtr. can still be in it’s infancy with only 15+ points and a month of trading to go.
My big caveat today will be the matches at the big mvg avg’s and tgt’s listed above. If you’re short equities use those levels for an exit or at least lighten up. Day Traders should expect some price rejection the first time down. Those are the high percentage spots to look for reversals on your short time frame maps.
Model Trading Portfolio…Current Holdings
……………..
Long TBT
Short Term View…
Neutral…It will remain a technical driven Lemming Effect Robotic Time Frame Trade.
It’s time to hit singles, then take the money and run. The board is trading Risk Off with rallies for the past month, in all Risk assets, being met with sellers.
The bigger seasonal game starts in another 3 weeks.
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…
30 Yr. Bond Futures … 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 all rallies in the Copper against a 377 weekly close. We regard this as an ancillary short to the general Risk off theme we see going forward late into this qtr. Weekly closes much over 382 will give us pause to re-evaluate our premise.
I’ve been doing this 35+ years…I’m hard pressed to recall a year when we haven’t gone back and attempted a retest of the yearly close in the equity indices at least once. Yes, we are looking for a re-test in the next few months.
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”.
Foreign Exchange…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 this @ the 1.70 level.
GLOSSARY