- Sell 2070 on SP500 future.
- Sell 10,550 on DAX . (this time I prefer to short the US)
1 – The news is well priced and was kind of leaked without tremendous upside.
2 – Earlier this week, I thought the market would climb to 2070 before the news and the market could climb another 3% after the news – did not happen.
3 – Key European bonds are already trading very tight and it is unlikely this can drive yields lower and provide a substantial boost to equities.
4 – Monthly statistics are stretched
- DAX that moves on average 700pts a months and is already 1000pts wide this month (1200 at 10550).
- SP500 that moves on average 95pts per month, will reach that target at 2070.
5 – From a game theory point of view, the capping zone is well known now and a breakout that does not complete to speed limit could be the trap/signal missing.
6 - The has not abated – the moves are very wide – I read this as very unhealthy. I don’t know any precedent to compare this with.
7 – The apex of the cone is getting very narrow – I find a bit too easy for the bulls to enjoy more upside to their final 2015 target.
- Gold may end up reaching 1340 and may initially benefit from the and the correction.
- Oil which had its own life could be floored at 44 and XLE could move up.
- In the EM space, I thought Brazil could go up. Could this hold true if the rest of the market corrects. Possible.
- EURUSD – not sure but clearly it will drive the relative performance of US versus Europe.
Short 40% SP500 at 2070 and watch until the end of the month – Time stop 1 week.
On SP500 , the risk is an extension to 2140.
On DAX , the risk is an extension to 10,100.
In both cases, if the risk limits are not breached, the levels Shorted shall be seen again before further upside.
Short 5% USDIDR , the chart is a perfect range over the last 20Y
Bund – SHORT 158.50 if provided (it is probably falling already and I am already short 60% at 155.80)
Market could go up 2% in the next 2/3 days. To monitor if climbs more.
If market falls 3% from here after the news then, we have a sell confirmation.
As usual, the good level to short is before confirmation.
The confirmed level is difficult to manage from a money management point of view.