Based on yesterday's GBPUSD analysis I went short 1 unit at 1.5328 on Twitter this morning. I have offers to sell another unit at 1.5360 and have stops for both units at 1.5450. Take profits are significantly lower. Keep in mind this is a weekend trade, so you must accept the possibility of a weekend gap, which I do- do you?.
I mused on Twitter this morning that Cad weakness and Yen strength separately act as leading indicators foretelling coming equity market weakness. This morning we saw both occur simultaneously, which I believe to be lethal for stock prices. The lowest Consumer Confidence in a year seemed to be the straw that broke the camel's back following upbeat earnings from Intel, Alcoa, and good news from Goldman and BP. But GE and Citibank missed the mark fueling the latest bout of risk aversion.
SOTD from Tuesday warned of 3 major markets facing significant test of key technical levels. USDX broke below the 83.50 support, but has found much better support from Wave Principle and Fib support at 82.50. The 10 yr bond yield failed miserably at my 3.11% (currently trading 2.92%), as did the S&P fail at 1100 (currently trading 1074). Also, take a look at gold this morning - just crushed. I am very glad I did not take the AUDUSD long because a big piece of my 3-dimensional approach to trading was missing, and that was the Intermarket Analysis part. The other markets that strongly cautioned against a long AUDUSD trade have broken out towards risk aversion. The path of least resistance seems to be lower equities, interest rates, and commodities, and a higher dollar for now.
No comments:
Post a Comment