Risk assets continue to build to an important and profitable corrective top from their over sold bounce earlier in Q1.
I’m taking gradually taking profits on risk, though not precious metals, at the higher levels of the top of this very recent distribution.
Unfortunately i cant bring many meaningful technical comments of my own as im in hospital at present with my wife expecting the birth of my first child. Of course given the size of my portfolio nowadays I am watching things here and indeed have taken some trades whilst we wait for the birth.
Price pattern wise this recent distribution in price post Draghi’s “bazooka” and the lack of depreciating effect on the eurusd pair is disappointing for bulls. It would be wrong to hold out for the eurostoxx50 3200 level, Dax, Ibex35, ftse100, spy, etc, etc, levels with the entire allocation. The long pattern holds for now but it is under near term pressure here and we can there is negative divergence between the ECB action and the price momentum achieved. The lack of response to the “bazooka” is very close to confirming a near term top.
Here the swiss team’s comments:
The teams levels eurostoxx 50:
“We recommend aggressive traders selling a re-break below 3050”
I concurred without having read the report and we hit this level this am and bounced. But only a little bounce which is not good enough. On my own book, having stepped down from “deathcon4” only a few days ago, i’m back to high alert and starting to take profits on long trades. Still too early for shorts note. Options out of money could be bought here as when the volatility starts it will sky rocket my likely. As its speculative and lacking price confirmation out of the money is appropriate for now.
Here Fitzpatrick from a few days ago:
Go long the usd and a near term top in oil close at hand, tying nicely in with the Swiss above.
More to come as soon as i can.
All the best
Rich