Spu’s… closing below the 1308-09 level In (M) will be price negative.
EUR/JPY…closing below 99.51 will be price negative the cross. Expect a test of the low 98 level for a starter.
Copper…32780 is a level that can trap the shorts.
Crude Oil…put in an all session ORL yesterday, which will make 84.05-10 the upside pivot. Sustained price action over this level will be needed for any type of recovery. Price action around 81 can be volatile. Be wary of Bear traps..I.E. new shorts getting directionally caught leading to short term oversold rallies.
30 yr Bond Futures….held it’s downside tgt of 148.20 in June, which was one of the compelling reasons to sell the Equity indices yesterday, along with the Yen Crosses.
Ok … now the real truth.. a former MF Global genius was on T.V. ( so called talking heads) was spouting off about the Bonds not rallying.
His last Cogent statement was in 2002,when he said the Spu’s were going to break back down and fill a gap it had just left on a higher opening. IBM had just made a low in the mid 50’s where I bought it for my IRA. IBM immediately doubled and so did the Spu’s in short order,a complete Moon shot, never looking back.
FYI…that gap he was mouthing off about was finally filled in the 2008 crash 6 years later. I stand corrected, I guess he was right!
Full disclosure; the only reason the tube was on at all, was I left the office to make a simple syrup for a Mojito after work, so I turned on the tube to watch the quotes. FYI…for good office habits…if you’re gonna watch, watch with the sound off!
I guess I shouldn’t look a gift horse in the mouth, he was a great contra-trend indicator!
Currency Traders that did the EUR/JPY cross…use a break even stop. Pay for your trade in the low 98’s.
Trade Alert EUR/JPY….Pay for your stop @ the market! BUY 30% of your cross position back @ the market.
Model Trading Portfolio
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Long SDS 16.45 intra-day ( 1292.50 Spu) Pay for your trade
Short EUR/JPY 100. intra-day 98.14
Short Term View…Every Trade is the same trade. It’s either Risk On or Risk Off.
We think you’ll have better Risk -Reward looking to sell the big rallies at defined resistance ( with tight stops) after such a big 2 day up, than buying strength.
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. Bonds 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