SO CLOSE, BUT NOT QUITE - We can say goodbye to the EURCHF trade :(. Really wanted the chance to get in towards 1.2000 but it wasn't to be and the market is back above some key resistance at 1.2120 and looks poised for a move towards 1.2200. Technically, the break above 1.2120 triggers a double bottom, but I don't like getting long above 1.2100 and will sit back. Perhaps we still get another sharp dip, although sadly, not likely at this point. I did manage to catch a nice entry on EURUSD just over 1.2500 on Friday and was pleased with the trade. Nothing else out there right now and will sit back again and wait for the next set-up. I have also been on the sidelines with my US equity trades and am glad for it, given the sharp rebound since last week.
FADE THE CRAZE - The SPX 500 rallied out from 1925 all the way back over 1975 in a matter of a few sessions and I am not sure I could have stomached such a move had I been short. Still, the rally has been rather suspect in my view. While currencies markets ran to the US Dollar post NFPs, equities chose to ignore this reaction and focus on other things. But I still think the thing to focus on is Fed reversal prospects and just how soon the Fed moves on rates. This latest employment data only takes us closer to higher rates in the US and as such, the stock market rally should be faded. I contend the market is now in the process of carving a material top and a break back below 1925 will confirm. Aggressive players may want to start building a fresh short above 1970.
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