Reports wise, we have a continuation of the Swiss team’s view that US equity risk (sp500) is tactically toppish here before a July new mkt high beckons. We have talked before about predicting tactical moves within a strong bull mkt and how problematic this can be. In this last week, many indexes have broken out again to new highs inc now the Russel2000, Dow, Nasdaq and Sp500. Within the dow transports still non conforming whereas semi conductors are entered another universe of valuation it seems. European equities under performing but with momentum to the downside and needing a period of consolidation. Key indexes (Dax ibex) remain well bid and within striking range and patterns of new breakouts. Eurstoxx 50 in US$ is a very impressive chart but approaching some key resistances. A breather for the euro and mini renaissance for the US$ appears likely via the tech charts of many pairs. Copper based, moved upward and now threatening a breakout of her down trend. Her miners moving with her, finally! Asian equities have a strong bid here and HSI put on around 10% in the last 3 weeks trading, overbought but a low momentum melt up.
For my own book the tactical trading longs that were added 3 weeks ago on QQQs, SPY, IYT, IWM etc all showing excellent profits. The leveraged longer term entries on Ibex35 and spy ftse100 etc all running. Curries have also been kind with the eurgbp looking like a long term runner and at a fairly decent trade size. Eurostoxx 50 in us$ was a perfect entry (fez), still running for now. Its a wave 5 and this is what occurs in a wave 5. What we must never ever do is calculate our probabilities for trading set ups during a wave five. Imagine you ran your stats over a 6 month period during this time. The date would be stupidly skewed. The trading mean average will reassert over the longer term as it always does.
Off the point comments. Some contributors here are trading bitcoin and they are claiming some stunning long and short trading results on short term timescales. I hope to be able to publish some thoughts and comments from one such trader that i’m in contact with. I always try and rationalize what i see around me and my only initial thoughts on this is that these new markets and instruments may be sufficiently new that algo bots do not have a dominant presence in these markets yet. The feature of no leverage makes them “clean” markets from institutional leveraged players and therefore maybe logically we should be interested for this reason. I have not studied price bars yet and so reserve judgement.
Without delay here the Swiss teams latest comments:
And here Fitzpatrick from end May holding the line on reflation:
And here Colby with a nice chart pack:
And here Meisels:
The bull mkt rides on but needs to catch fire again across the commodity space. Lets see
Rich
p.s. The UK risks a lost decade here ahead unless clear policy and direct emerges. Her record current account deficits must be funded by continued inflows of world capital. If these capital inflows reverse the impact on interest rates will be very dramatic and the great housing (and bond) boom may rapidly turn to a bust. Everything is cyclical and all means revert eventually is a truism. The issue is not if but how the mean reversion wealth move occurs. Will it be unruly or will it be managed. The probabilities have shifted to unruly in the last 24hrs in my view.