EURO UPDATE - So we're still holding onto that Euro long after the market dipped back down but was unable to drop back under 1.0600, leaving the stop just over cost at 1.0581 well intact. As I've already said, the trade is in its infancy and the Euro would need to see a daily close above 1.0700 to give this thing a real shot at some decent upside. I am going to leave the stop-loss where it is and will be looking forward to seeing how it plays out. The bearish US Dollar conversation seems to be gaining some more traction, and now, a well known fund has come out with calls on US Treasuries that would imply a lower Dollar going forward. So while I continue to be on the fence with the US Dollar outlook, I am certainly feeling good about this Euro long attempt.
CABLE TOO STRONG? - At the same time, even with all the US Dollar bearishness, this move up in Cable has been quite strong and the major pair is pushing back into that major resistance zone in the 1.2600-1.2700 area. I have said here that on a longer-term basis, the greater risk is to the upside post Brexit. But I have also said I wouldn't be surprised to see more choppy trade as the negotiations play out and uncertainty lingers. And so, with that said, I would be happy to consider selling another overextended intraday move into the 1.2700 area. Remember, from a technical perspective, while GBPUSD holds below 1.2775 (December 2016 peak), the market remains confined to a downtrend and is trading in a bearish consolidation.
STOCKS - As far as stocks go, the SPX500 has been doing its best to mount a recovery from recent lows after stalling ahead of the major support level at 2320. The fact that out of the weekend geopolitical tensions were reduced somewhat has certainly helped to inspire renewed bids. But geopolitical risk or not, this market remains highly overextended and due for a sizable correction, which I have projected to be in the 20-30% range. We need to establish below 2320 for this to have a shot at getting going, but in the interim, I would be looking for any additional upside in the sessions ahead to be well capped. And the more these rallies are capped, the more it strengthens the prospect for the onset of the anticipated reversal.