Forex/Futures Outlook 08/02 - 08/03

greenback

Let's just have a quick recap for now and update the status before Fri's close for the week in case we need to do any adjustments.

I have to say that the defense by bulls is quite impressive. If you look at the retrace in ES, really not much at all given two consecutive disappointments by the two central banks. Also worth noting today is that TF and NQ both pulled back less than ES.

However, I have closed 1/3 of the remaining unleveraged position (25%) because the downward risk has increased. At best, the market would go sideway in the coming weeks before the next FOMC meeting, and a back test of the low in early June becomes more likely. In the end, the bet for a new high is officially off before the next FOMC meeting.

greenback

Bonds are apparently also very strong, having retraced from the all-time high after breaking down from the double top, they are on the way to retest the high again ... Note too we do have the second down leg in both ZB and ZN as we predicted.

chickencoop

licai5688

greenback

Indeed, yesterday's reversal has leg and here is the REAL reason:

Merkel Coalition Members Show Acceptance of ECB Bond-Buying

greenback

All right, let's wrap up this week's market status ...

GOLD is making a series of lower lows and lower highs SO FAR.
CRUDE needs to show more strength.

greenback

Except AUD, I need more evidences to show this rally in risky assets has more legs.


EURO still below key S/R at 1.24


GBP is forming lower lows and lower highs and is below a down trend line


USD/JPY also below a down trend line

greenback

Bonds are in risk of breaking down more from here ... i.e. double top formation again.

greenback

Critical time for stocks ... we are now officially at the upper trend line in both ES and NQ.
It's promising, but also need to see more strength next week.

greenback

Given that the stocks have made a new high today, I decided to close rest of the 2/3 of my unleveraged long to realize a decent profit. As of today, I no longer have any stock holding. The account is 50% cash and 50% income generating bond funds from PIMCO.

Will reassess the strength next week to see whether there will be a dip to go back into stocks again. Of course will start from unleveraged funds first, then add leveraged funds, and finally use futures for swing.

greenback

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