CURRENT TRADE - On Wednesday, I managed to reduce the size of my SPX500 short while at the same time raising my entry price to 2122. I had sold some lower down in the previous week and covered that portion on the dip and am now only holding the higher entry. While I believe we head lower and like the trade, I also always prefer to err on the conservative side. It may take some more time for this market to drop off and I am more comfortable sitting back with the smaller position size. Interestingly, stocks continue to ignore the prospect for a September rate liftoff, but I don't think they will be able to hold out much longer. We really haven't gone anywhere this year, and a lot of this price action to me feels more like that final chop before capitulation.
PROSPECTIVE TRADES - Moving on, USDCAD has come onto my radar and I'm thinking there could be a good opportunity to sell this baby towards 1.3100. We have seen a very strong move to fresh multi-year highs, and once the market clears the 2009 peak at 1.3065 there will be little excuse left to keep pushing over the short-term. Daily studies are highly overbought and it would seem to me the risk is running high for a healthy corrective pullback in the sessions ahead. Otherwise, I am still keeping a close eye on the price of GOLD and waiting anxiously to take a shot on the long side. I think this market has more value than people are giving it credit for and the fundamentals look attractive to me as a medium-term play around current levels. I am going to wait for one more dip to fresh lows and will then look to initiate a buy. Stay tuned.