Well, well, well. Last weeks price action changed things somewhat in the near-term (no worries, I'm still a bear). I spent some time going over the daily/weekly/monthly chart on the SLP500 showing higher numbers in play. Near-term of 943-968 , 980,1006 and 1060 perhaps. but those numbers are no secret). I don't like it one bit, but it is what it is. My call for the reflation trade to reverse this week is in jeopardy. Perhaps I am capitulating by buying the copper and natural gas last week. Now EWZ will do nothing bu serve as a hedge towards the PCU, XLE (might as well be PBR) and towards the remaining commodity longs. Started last week uncomfortably exposed to the short side of commodities but as the dollar rout progressed I had to temporarily adjust. Do not mistake this for me being bullish, it is not. I'm still quite the bear. It's just that I realize the market will contine to be propped up until all this capital can be raised from the markets (ie: drain wealth)
The 200 day moving average will be taken down now. The computers behind the curtain will make sure of that. As a result I am upgrading the melt-up scenario from plausible to likely. 943 and 963 will be reached sooner rather than later before we get any pullback. Remains to be seen if there will be a rally through summer. 908 is a first target. Not until 875 is broken would I expect to see any downside momentum pick up. Once this garbage rally is finally done I'm looking to 850, 736, 620 and 585 as downside targets.
DXY level I'm watching is 77.77. Gold still tracking to the original target of 1060. I would prefer to see it pullback to 935 before launching that assault though. Oil has some resistence at 68 and 75 . Soybeans has a 1233 target now, even though I'm short at 1161, I will continue to hold this one for now. Everything in commodity land is overbought, but most have been that way for a bit now. Therefore it can stay this way longer. My EWZ and RIMM shorts have my ankles looking like hand-grips. Again though, I am long XLE,CLF,GOLD,PCU,UNG,CAL so I'm alright. I'm not liking my DB short now as 75 comes into play for it now that the market is going to take out the 200dma. I wish I had added one of the shippers a couple weeks ago (DRYS,EXM), but oh well. Not chasing those here.
Will post charts later.
