Equity markets too a breather last night, about time we had a little consolidation here. Still think we head higher slowly but maybe we correct a little more in the meantime.
US curve rallied nicely, so did the AUD curve in light of yesterdays inflation numbers but the trend is murky there and that is 1 market to avoid. Think rates are about to range here with some episodes of downside pain.
Still bullish EURJPY and USD agst CHF, JPY & Gold. Avoiding energy here but natural gas is slowly performing to the upside here. It has landed on my radar today, a space to watch.
Ags & Sugar confirming the upward trend. Space to be.
Wednesday, July 28, 2010
Tuesday, July 27, 2010
Crappy consumer confidence number vs decent numbers by DuPont. Risk crawls higher. VIX looks soggy & path of least resistance seems higher.
Equity view is unchanged, seems to be going higher at a slow pace. Bullish here.
Looks like bonds are turning over here. Gilts, Shatz & Bobl all especially look vulnerable to the downside. Same story with US Curve, downside is vulnerable. Think Neutral and if anything bearish Gilts but think capital better served elsewhere.
This had a knock on effect on the USD last night too, USD stronger across the board in most currency pairs, crude and gold/silver (to lesser extent copper) took a bit of a hit. Think this space has a lot of potential. Long EURJPY, with USDJPY being the main driver. With the Gold/Copper spread, I think individually copper may find it a bit tough going on the topside while gold has potential to break lower into the 1100-1140 area. Bullish USD here mainly agst the JPY, CHF & Gold.
Equity view is unchanged, seems to be going higher at a slow pace. Bullish here.
Looks like bonds are turning over here. Gilts, Shatz & Bobl all especially look vulnerable to the downside. Same story with US Curve, downside is vulnerable. Think Neutral and if anything bearish Gilts but think capital better served elsewhere.
This had a knock on effect on the USD last night too, USD stronger across the board in most currency pairs, crude and gold/silver (to lesser extent copper) took a bit of a hit. Think this space has a lot of potential. Long EURJPY, with USDJPY being the main driver. With the Gold/Copper spread, I think individually copper may find it a bit tough going on the topside while gold has potential to break lower into the 1100-1140 area. Bullish USD here mainly agst the JPY, CHF & Gold.
Monday, July 26, 2010
Phew. Being the the bear camp sure feels like being at band camp and for the life of me I can't remember the title of that movie.
Anyway the biggest change to my view is now to be square bonds. The trend is looking shaky here. A false break in Bobl/Shatz a few days ago lead me to believe that the upside still had a chance but with the reversal over the last 2 days and Gilts breaking out of it's congestion pattern leads me to believe that we're about to test the resolve of all those longs out there. This will contaminate US Bonds too I think. Trend still looks fairly entrenched but I would lighten up on US curve here or go to sidelines. if you wanna be long, be long US curve. Others look like they're about to head lower into the wonderful world of range.
Other views remain the same. Equities, SP as proxy, all looking perky so can't argue with the price action. Think any pullback will be shallow and we will crawl higher. VIX is also looking shaky here. Sell Vol/Donwside wear diamonds kinda work here too. We can place crude & cousins in this space too as "same same" trade.
USD is sick. Risk ccy are bid. USD Trend is about to continue here. If anything I would look at this space. Bullish Euroyen, think we're going to break topside out of this pattern and it's probably going to be JPY/US rates (same same) driven.
Now gold and copper, spread is compressing and looks to continue. I keep having that sinking feeling about gold. Now in the ags space, we're going through a bit of a correction here, hopefully this is not an elimination of the upward trend. Avoid corn, rather hold wheat at this stage. I'd go on about drought in Europe/Russia vs Abundance in US argument but others would provide you with better arguments/weather charts than I would. Sugars sweet spot is still up.
Anyway the biggest change to my view is now to be square bonds. The trend is looking shaky here. A false break in Bobl/Shatz a few days ago lead me to believe that the upside still had a chance but with the reversal over the last 2 days and Gilts breaking out of it's congestion pattern leads me to believe that we're about to test the resolve of all those longs out there. This will contaminate US Bonds too I think. Trend still looks fairly entrenched but I would lighten up on US curve here or go to sidelines. if you wanna be long, be long US curve. Others look like they're about to head lower into the wonderful world of range.
Other views remain the same. Equities, SP as proxy, all looking perky so can't argue with the price action. Think any pullback will be shallow and we will crawl higher. VIX is also looking shaky here. Sell Vol/Donwside wear diamonds kinda work here too. We can place crude & cousins in this space too as "same same" trade.
USD is sick. Risk ccy are bid. USD Trend is about to continue here. If anything I would look at this space. Bullish Euroyen, think we're going to break topside out of this pattern and it's probably going to be JPY/US rates (same same) driven.
Now gold and copper, spread is compressing and looks to continue. I keep having that sinking feeling about gold. Now in the ags space, we're going through a bit of a correction here, hopefully this is not an elimination of the upward trend. Avoid corn, rather hold wheat at this stage. I'd go on about drought in Europe/Russia vs Abundance in US argument but others would provide you with better arguments/weather charts than I would. Sugars sweet spot is still up.
Thursday, July 22, 2010
What to you do when you're in the camp of the bears and market momentum is against you. Stand aside and wait. We're approaching or have breached the S&P downward trendline (however you draw it) and 50,100,200 etc trendlines that I think the market will test the bears resolve.
We're in a wide swing congestion market in equities. Sell front end vol, preferably the downside. We can place energy in this category too. The Gold/copper spread is compressing after making a high in mid June and is tracking back lower. I have a feeling that we're about to test resolve of the perma gold bulls here. Perhaps 1100-1140 area but one would probably have the spread on instead.
Buy bonds. What can I say. The trend is higher. That is the easier trade amongst the complex. that and being long Wheat, Beans & Sugar.
AUD has broken it's high. 9000 now in sights again. USD trending lower quite nicely. In line with the feel good risk environment, carry is probably about to take off again, but same same with being long equities really. EURJPY looks like it's about to breakout (topside) of it's congestion range. Options might be the way to go long here.
We're in a wide swing congestion market in equities. Sell front end vol, preferably the downside. We can place energy in this category too. The Gold/copper spread is compressing after making a high in mid June and is tracking back lower. I have a feeling that we're about to test resolve of the perma gold bulls here. Perhaps 1100-1140 area but one would probably have the spread on instead.
Buy bonds. What can I say. The trend is higher. That is the easier trade amongst the complex. that and being long Wheat, Beans & Sugar.
AUD has broken it's high. 9000 now in sights again. USD trending lower quite nicely. In line with the feel good risk environment, carry is probably about to take off again, but same same with being long equities really. EURJPY looks like it's about to breakout (topside) of it's congestion range. Options might be the way to go long here.
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