CURRENT TRADE - On Wednesday, I managed to reduce the size of my SPX500 short while at the same time raising my entry price to 2122. I had sold some lower down in the previous week and covered that portion on the dip and am now only holding the higher entry. While I believe we head lower and like the trade, I also always prefer to err on the conservative side. It may take some more time for this market to drop off and I am more comfortable sitting back with the smaller position size. Interestingly, stocks continue to ignore the prospect for a September rate liftoff, but I don't think they will be able to hold out much longer. We really haven't gone anywhere this year, and a lot of this price action to me feels more like that final chop before capitulation.
PROSPECTIVE TRADES - Moving on, USDCAD has come onto my radar and I'm thinking there could be a good opportunity to sell this baby towards 1.3100. We have seen a very strong move to fresh multi-year highs, and once the market clears the 2009 peak at 1.3065 there will be little excuse left to keep pushing over the short-term. Daily studies are highly overbought and it would seem to me the risk is running high for a healthy corrective pullback in the sessions ahead. Otherwise, I am still keeping a close eye on the price of GOLD and waiting anxiously to take a shot on the long side. I think this market has more value than people are giving it credit for and the fundamentals look attractive to me as a medium-term play around current levels. I am going to wait for one more dip to fresh lows and will then look to initiate a buy. Stay tuned.
This analysis is for informational and educational purposes only. This is not a recommendation to buy or sell anything. MarketPunks is not a financial advisor and this does not constitute investment advice. All of the information contained herein should be independently verified and confirmed. Please be aware of the risks involved with trading in currencies, stocks, commodities, cryptocurrencies and sports. Do not trade with money you cannot afford to lose. It is recommended that you consult a qualified financial advisor before making any investment decisions.
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