European Close
Monday's? Always a struggle to redial the intensity, look at your (risk) positions and decide 'what do I really believe?'
For once - fortunately? - my 'strong opinions, weakly held' are all in play.
So-called fundamental (& bias) aside I believe charts (& the risk-reward) support:
- A core short in European equities;
- Waiting (hoping?) for the $SPX to 'complete' a top @ 1280-1300;
- Continuing to sell/cover/re-sell EURO/$USD;
- Building a short in AUD$/USD$;
- Tentatively (VERY) buying $/YEN above recent lows.
Two themes dominate:
First, whilst I'm unsure when/if this becomes a full-blown 'risk off' trade, I think European equity markets have: (a) peeled away from the EURO 'break-up' trade; (b) face major macro economic headwinds; (c) are clinging on to the relative strength of the $SPX.
Second, I expect the USD$'s strength to broaden (beyond the EURO's travails) & with dampening global growth (see: China) the AUD$ (& other Asian currencies) looks very vulnerable. Buying the USD$ Index may well be the simplest (best) trade.
The rest (& I'll post my levels/entires) is in the trade management.
More of a 'muse' on the US close
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