Dow Futures

I think the market action recently has been strangely constructive despite the chopping around. I don't know what the catalyst is going to be, and more frankly, I don't think it matters (AAPL earnings? Greece 'resolution'? Dovish Fed? etc...) but to me it looks like we could be on the verge of a break from this range. We have clearly been in a strong up trend for a long time (6 years and counting) but in the recent months the trade has been frustrating to say the least, so why do I believe we are ready to break out now?

If you look at the 'weekly' chart below you will see that last week we traded within the range of the week before which indicates we have reached a 'balance' a break from which should (could is probably a better choice of word) produce a trend. Since the prevailing trend is definitely up my bias is for the move to continue in that direction.

If we now look at the 'daily' chart Friday's trade was within Thursday's, again indicating we have reached a balance.

The 2 scenarios that I am going to look for in order to initiate a trade are:

1.

We enter a stop buy above Friday's high (18037) with a protective stop at Friday's low (17932) on half a position. If the market confirms my thesis the market will remain bid above that low. I would have a second stop buy above the weekly high (18072) for the second half of the position against a stop at (17774) again if the market confirms we won't fall back to the lower level. My anticipation is for the market to trade through the all time high (18270) with a target of 19000ish eventually.

2.

Quite regularly the market runs the logical spots for stops before reversing in the other direction (usually with shorts trapped). In this scenario the market won't breach my stop buys but will instead run the lows of the 'inside' day/week before reversing and closing back within the range. In this case we would look to enter long vs the low of the stop run. If this happens then i will need to revise the plan based on that information.

If the market does indeed breakout I will raise my stop to flat initially and will then operate a trailing stop on a daily closing basis.

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YM_F - 17790/18016, 17666/18093, 17465/18270

We did get the inside day yesterday, unsurprisingly, it was also a very strong one at that. In the Globex session we have taken out the high from yesterday and if we close above it that adds to the general feeling that we are going to be trying for new highs soon as things stand. LONG

GC_F - 1190/1209, 1183/1209, 1141/1223

Gold broke lower from its February consolidation and failed to reclaim the low in March, that signals a potential continuation of the move lower to me. Broke to the downside and closed below an inside day yesterday, whilst it stays below 1209 it looks a SHORT

CL_F (June) - 56.40/58.63, 53.31/58.82, 45.93/55.21

Oil did a nice monthly reversal in the May contract, we are now rolling into the June contract but my bias remains the same to the upside. We are chopping below significant resistance at the moment and took out the previous days high and low in one session, patience needed but i think we are poised to continue higher. LONG

EURUSD - 1.0712/1.0830, 1.052/1.0848, 1.0459/1.1240

Headline risk á la Greece dominates the euro at the moment (and arguably everything else). That makes this a tough trade at the moment, it seems to be trying to hold in around here but the down trend is definitely in control. NEUTRAL/SHORT

I have been a bit slack in posting my thoughts and levels here so i am going to get going again with just 3 'macro' thoughts and i will begin building on them through the week. The size relates to day, week, month levels which i am watching. I will post some charts when I have some more time as well.


YM_F - 17666/18044, 17666/18093, 17465/18270

The liquidation on Friday pushed us back into middle of the monthly range, it did result in an ugly weekly candle but since we didn't break any key lower levels the bias is still to the upside. I would expect today (Monday) to be an inside day since the range on Friday was so wide, which levels we respect tomorrow will be informative. LONG

GC_F - 1197/1207, 1183/1209, 1141/1223

Gold broke lower from its February consolidation and failed to reclaim the low in March, that signals a potential continuation of the move lower to me. SHORT

CL_F (June) - 56.85/58.34, 53.31/58.82, 45.93/55.21

Oil did a nice monthly reversal in the May contract, we are now rolling into the June contract but my bias remains the same to the upside. 60.00 seems likely to be key resistance but the recent trend continues to be higher but some patience may be need here. LONG