Back From Break


MOVING WITH PURPOSE - Hope everyone enjoyed the market long weekend. Clearly there wasn't much volatility in Monday trade and so, we are finally back at it today. Looking at the price action over the past several days, it's clear I was too patient and missed the recovery rally in the Buck. But I'm ok with that. These things happen and we just move on to the next opportunity. The truth is, we may yet still see some Dollar selling, although the break back below the previous neckline of the EURUSD double bottom in the 1.1050 area, and the surge in USDJPY back towards 122.00, suggest there is a legitimacy and purpose to this Dollar move. I don't chase trades and won't be jumping on the Dollar now that it's moved a nice amount. But it does look like the Dollar is trying to reestablish itself.

DELAYED REACTION - As far as the trades go, I have jumped back into an SPX500 short at 2126. Since exiting for a loss the other week, the market has shown no ability to follow through with the latest record high break, and the pullback once again encourages the prospect for some form of a meaningful top. Fundamentally, the trade lines up, with last week's hotter US CPI print and comments from the Fed Chair that a rate hike in 2015 is still on the table, supporting the bearish case. I'm not sure the market has fully reacted to the events of last Friday, given the holiday weekend, and perhaps we will see some reaction in today's trade that opens a breakdown in stocks. Otherwise, I'm considering a long EURGBP trade and will be looking to buy back into AUDNZD on a dip into the 1.0500s.

Looking to build back into a long AUDNZD position. Via @joelkruger

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