The decision to buy the US dollar I chose about 7 days ago is shaping up better and better. Right now I am able to insure that at worst the position will be a small winner on 1/3, a push on the other 2/3. As the market continues to rally, hopefully, through the rest of the week, the position becomes profitable. The first upside target is 77.55 and then 77.89. I would love to see a spike up to 79.00, at which point, I would add to the long position, assuming we settle above there.
Over to the Stock Indexes. I stand by my feeling that 12,400 is a target to sell against in the Dow Cash. If Dow cash settles below the psychologically important 12,000 support, the johnny come lately bulls could be in for an attitude adjustment which would have them cursing the markets again, should a significant “correction” get sparked there.
In the SPX, I would look for the 1300 level to provide support, until the day it is no longer support. This may sound silly, but there will be enough trade at the 1300 level in SPX and the 12,000 level in the Dow Cash to provide support. How long that support holds is the question.
My point is to use those levels as trading fulcrums, to either initiate speculative longs, or following a significant breach of those levels, an area to initiate speculative short positions.
Finally the commodities.I think today was a break to buy in old crop corn. Ditto for old crop beans. We have a S/D number on Thursday. If its friendly, I want to be long today, not Thursday morning at 9:31AM.
The 103.50 level, in crude, is acting as support and should be viewed as such. Today’s low at 103.33 was a bit of test of that level, but not a significant test.
The longer term trend remains intact. However, having the copier salesman yesterday tell me he was long oil, gave me pause. We have to have painful corrections along the way to punish weak longs. That’s why I like selling new highs, vs buying new highs. The profile of the person buying the new high is someone I want to fade. 1) either they are covering shorts, in which case their “uncle” point of throwing in the towel is a trade I want the other side of, or 2) its someone looking to “swing trade” buy buying a break out. In 23 years I found, its generally, not always, but generally profitable to initiate shorts while the market is popping to new highs. Very often, the new highs, are followed by sharp breaks. Its not something I generally want to put it on and go on vacation for 3 months, and not look at it. Its generally a short term scalp with a lot of good risk/reward built in.
That is All
CER
