Lookin At The Book


OFF THE TABLE - So as you all already know, as per my 'Market Movers' update early Wednesday, I booked profit on my 1.0175 long AUDNZD position at 1.0630, and decided to stand aside and wait for the next opportunity to buy into a dip. I won't be waiting too long. But given how extended the market was at the time of exit on Wednesday, I thought it prudent to lighten up and take a nice chunk off the table. I have been trading in and out of AUDNZD (always to the long side) all year, and will continue to do so. I talked a lot about the fundamentals behind this view the other day, so I won't get into it again now. Still, I will repeat my view that I believe this market has a lot higher to climb in the months ahead, and I will be looking for a push towards 1.2000 into 2016.

ON THE TABLE - The JKonFX Book went private back in August 2014, and into its tenth month, the portfolio has realized profits just shy of 20%. This of course is with little to no leverage. Perhaps even more exciting right now, is that I still have a position open, short SPX500 from 2116. Clearly getting too excited about the prospect of a short equity position is a bit of a fool's game given how relentless the uptrend has been. But even still, I will be looking to see if this short can't get going with a break below critical support at 2040. I believe we have reached a saturation point in the market, where even news of the Fed staying on hold for longer is losing effect. The market has taken just about as much advantage of free money central bank policy as it can, and it may finally be time for stocks to ground after flying so high on borrowed wings. Of course, I say and trade this with a grain of salt.

Stocks have flown too high, too long on borrowed wings. Via @joelkruger

ALMOST ON THE TABLE - Now onto the US Dollar. As much as I remain quite bullish the Buck, I still think there is room for additional USD weakness before the trend reasserts. If we are to isolate the Euro, the single currency has triggered a compelling double bottom, projecting upside back towards a measured move objective that coincides with the 1.1535 February peak. While it's of course true we may not get up above 1.1500, I wouldn't be betting against that prospect. If you feel compelled to short the Euro in the 1.1300s, it may very well work out. I'm just not going to be coming along for the ride. Instead, I prefer to sit back and wait to see if we get a surge through 1.1500 in the sessions ahead. At that point, I will be quite comfortable dipping back in and selling EURUSD. Until then, just more wait and see on this front.

A DIFFERENT TABLE - One more market to talk about today. It would be unfair to not highlight the price action in OIL on Wednesday. OIL put in a gravestone doji-like performance, which translates into a bearish signal, that could open the door for a resumption of declines. Keep an eye on OIL prices in Thursday trade. I know.....I know....We also get the UK election today. This whole election looks like a big mess and any clarity on the matter will likely take weeks. So while we could see a good amount of GBP volatility Thursday, it is going to take more time to figure out what this ultimately means for the Pound. That's all I've got for now. I am looking forward to the next new trade that comes our way. Stand by.

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