Utilization Note…

We try to write levels in instruments that we feel are germane to the capitol flow of the entire board. In other words, a particular number or level which we feel will effect a wide array of asset classes, minimally over the course of the day, sometimes much longer.

I.E. yesterday it was the 30 year Bond @ 140.10-15. Early, this level looked distant, however the first USZ high was 140.07. It broke almost a full point before coming all the way back up to print 140.10 after the auction. It then proceeded to break another full point. When Bonds break Equity Indices generally go the other way, which is up.

There were commensurate swings in the S&P 500 Futures and the currencies off this price action which provided defined risk levels for a shorter term trader.

Early yesterday, the oil weakness helped keep pressure on the S&P 500 futures before the EIA report. Late Wednesday, it was the SPU/BOND spread that caught our attention, which led to a sell off in Risk On related assets.

You’ll notice that I only write 1 or 2 levels in various instruments. Markets are Inter-Related!

Price action in one instrument begets a reaction in others.

The point to this missive is that there is something for everyone in what I write on a daily basis. Depending on your specific goals and time frame outlook, you can find actionable trades with limited risk or just use the work for reference for a longer time frame set up.

Successful investors are not myopic or one dimensional. Look around the board to see what is running the show. As a trader you can generally find a low risk alternative ( ancillary) trade.

We endeavor to pick an instrument and a commensurate level which we feel will have the most impact on a daily basis.

Of course we miss some, but we catch more than we miss, and we write what we see.