- Building on solid April performance
- European Central Bank decision on tap
- VIX at lowest levels in months = warning
- Looking to fade risk and buy USDs
PROFIT - Ok..so a nice little profit booked in NZDUSD early Thursday. I opted to step aside, as I was feeling a little less certain and thought maybe there could still be another push higher before this thing comes off. When I looked at broader price action, it was supportive of this possibility and so, I was comfortable stepping aside. This is definitely a nice step up from last week's trade where we kept breaking even on every attempt. We are now +4% in April and +31% YTD!
EVENT RISK - Looking ahead, we should see a nice rise in volatility with the European Central Bank decision on tap. I would also add that with the VIX back to its lowest levels in months, this should be a healthy warning sign that things could get crazy again real fast. Of course, one needs to look no further than US equities for an indication of this fact. Stocks are back to just under the record highs from 2015 and with nothing really behind the move, we are probably on the verge of seeing another major collapse.
FADING STRENGTH - Interestingly enough, as much as stocks have been bid these past several years, I have done really well picking my spots and selling rallies, more often than not catching intense reversals lower. The last time I caught such a wave was in December 2015, and we are now back to that point in time where another amazing opportunity is setting up. It could happen as early as today, so stand by for any updates here. If we see another push that results in stretched intraday readings, I will sell hard.
THESE THREE - As far as FX goes, I would be happy to sell NZDUSD into another rally, and I would love to buy USDCAD into one more dip towards 1.2500. USDCAD has fallen off a cliff since peaking in January at a near 13 year high and I think maybe one more little drop and then this thing starts to move back up. I still think USDJPY could move lower again and will be watching there as well, but for the moment, my biggest focus is on NZDUSD, USDCAD and the SPX500. Let's see what, if anything comes our way today. I certainly won't be forcing anything.