Welcome to the Mid -Week Shuffle…
Gold…could go as high as 1650
Platinum…stops are over 1674
Spu’s …1292.50 should be early support. 1300 is early resistance.
Nasd…2496 is early support. 2527-24 is the 18day mvg avg. and the monthly close.
30 yr….150.00 + a couple is natural support.
Foreign Exchange/Currencies….as previously stated…
USD/JPY … the 200 day is 78.65 ( app 127.15 Futures). This will continue to be a key driver in the crosses. (traders will continue to buy against the 200 day in the Yen and sell other currencies until it blows up). It blew up yesterday with all late rallies in the Yen stopping @ 127.15 in the futures.
AUD/USD…99 is resistance
Oil…not looking for anything over 86.70.
General Comments…
Today will be a price action trade which should show at least one attempt at the equities breaking. This is an upside pressure release correction we’ve been looking for since Monday. Don’t chase anything today. If the correction has legs, we’ll see another 20 higher in the Spu’s and as much as 2 full points lower in the Bonds going into later week, however all new sustained and closing price action under 150 in the 30 yr. would be needed.
Model Trading Portfolio…Current Holdings
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No Current Holdings
Short Term View…Every Trade is the same trade. It’s either Risk On or Risk off.
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 2-3 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”.
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.
GLOSSARY