Friday February 24th 2012 @ 14.15 GMT
S&P 500 @ 1366
View: Essentially unchanged – new highs of 1370 has not (yet) altered the outlook (or range) – but there is one important development: the ‘risk-on’ up-channel (from mid-December) is finally under some pressure – with the S&P bouncing resiliently (23rd) off its trend-line @1353. If there’s is no upside follow through today a re-test should follow – and much will be learned.
Position: Still cautious and spent the week scalping very conservatively in the 1355/70 range. Still trying to establish some breathing room for a 1365/70 short with an minimum objective of 1300 (= 4-5/1 ‘risk’reward.’)
Euro Stoxx 50: @ 2515
View: Minor new highs (@ 2558) didn’t convince and 2520/30 continues to be a short-term pivot. As per S&P500 the ‘up-channel’ is is play, but I’d need a sub-2500 close to feel confident in a deeper (perhaps very significant) correction.
Position: Below 2560 stops (and some defensive trading) have kept me in the core short. Below 2535 the ‘5-down – abc’ count (2558-2490-2530) preferred and the ‘risk-reward’ remains attractive.
$AUDUSD @ 1.0710
View: Consolidating or topping? Between 1.0820/1.0600 tough call – but below 1.0800 we are now out of the up-channel and until/unless that is regained I’ll continue look for a meaningful (1.0400) correction.
Position: Difficult – but continue to trade a core short with 1.0780 becoming the significant upside pivot.
$EURUSD @ 1.3405
View: I was wrong – we finally did make it to 1.3400 – but the count is now much stronger. The whole 1.2630/1.3430 rally looks like a perfect ‘5up’ with the ‘5th wave’ from 1.2990 equally attractive. Little damage as I’ve traded small shorts very lightly up to 1.3400 (always seemed likely) but with 50% of the whole 1.42/1.26 sell-odd retraced the ‘risk-reward’ favors shorting 1.3400/50. Interestingly – the ‘5up count’ implies a decent low (1.2630) might be in (perhaps after a good old fashioned re-test ) and going long EUR/AUD is intriguing me.
Position: As above – setting core short – risking big figure – for a re-test of the lows.
$DAX (is a TAX): @ 5835
View: Unsurprisingly – it is the DAX – we extended towards 7000 but that only made for a week of heavy trading. Closing below 5900 (big pivot) would increase confidence a massive ‘abc-correction’ might be complete.
Position: Micro managed – and after a poor beginning – relatively happy with core short average @ 5835 +now!?) Intend to stay very tuned and keep trading around core.