What to Watch

MAJOR NOTHING - We're into the final week of September and it looks like the portfolio is going to close out the month with another solid gain. But if you've only been looking at the major Dollar pairs, you'd probably be a lot more frustrated. You see, the major markets haven't been doing anything at all. There has been no clear directional bias in these markets for several weeks now. While the US Dollar has been broadly bid and is trending higher on a longer-term basis, shorter-term, there isn't anything going on. And so, my profits have come elsewhere, mostly from AUDNZD and the SPX500. 

KEY LEVEL - So what will it take to get the major markets moving? In my opinion, the SPX500 is the critical market to watch right now. Everything hinges on the direction in stocks. US equities have been artificially supported to record highs on the back of accommodative central bank policy and now that we are finally at the end of that rope, there is a very strong case to be made for an unwinding of this artificially supported trade. Still, it has yet to play out and there really hasn't been any indication to this point. So right now the focus is on that recent low in the SPX500 at 2108.

Central bank policy rope is all used up. Time for a reckoning. Via @joelkruger

NO MOR ROPE - Up until this point, every time we have seen sharp pullback in stocks, there has always been something else the Fed could realistically do to offer additional accommodation. But now, there isn't anything left and this time when the market starts to pull back, investors won't have anything to lean on for support. A couple of weeks ago when odds for a hike this year ramped up, the SPX500 sold off a nice amount but stalled at 2108. So this time round, when we break back below that level, I think it will open the flood gates. And when I say floodgates, I mean that this will get those major markets going as well. 

Currency Pairs

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Positions Shaping Up

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