Spu’s…1341 then comes the trend line support and fibs @ the 1329-32.75 level drawn from the 1262 low. All new strength over 1358-62 is needed for more upside,
Oil…the 78 handle in the oil as shown on the chart is big stuff. After that you’re looking at 70 ish.
AUDUSD…there is nothing standing in the way of trading 100.80 on the point & figure charts. All new closing strength over 102.40 is needed for any more upside, which even then, seems limited to no more than a couple of cents.
USDJPY….6/20/12… This simply means that the Yen is currently
running the show, not the Aussie. It’s a USD/JPY Trade!!
This held the 200 day yesterday on the opening and is now attempting to maintain above the 50 & 100 day mvg avg cross. This is the big game!!!
General Comments…
Testosterone is high. Traders are placing big bets both ways in the Equities. The shorts will eventually win out and win out big!
It’s a matter of when… not if. I got cute and tried to play this last wiggle up after a very big rally…Really Stupid!
When it gets hot a sweaty in Greece this summer, we’ll start to see swings like we did last year when we hit 7 out of 12 80 point swings in the Spu’s in 2 months.
Just a little observation about the Yen and the crosses…This week for the past 2 quarters has set up an approximately 800 point directional trade in the Yen futures. December it was down…Risk ON….March it was up…RIsk Off. In other words the Yen has led the equity trade or has at least mirrored it. Depending on your view of the universe, and mine is that the equities are the tail end of the dog, currencies lead!
Keep your eye on this as well as the commensurate levels in the crosses. Price action around 80 USD/JPY a natural number will be violent.
Yra Harris….Yra wrote a fundamental piece on this last night in Notes from the Underground.
Model Trading Portfolio
……………..
Long SSO 53.25 intra-day
Long TBT 15.50 intra-day
Short Term View…Every Trade is the same trade. It’s either Risk On or Risk Off.
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.
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, S&P 500 Index, NASD…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”.
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 this @ the 1.70 level.
