SC Weekly – Risks of Trading the “B” Leg

Overview:

The purpose of this article is to provide some insight into potential upcoming trades and portfolio management across several markets. 

Cryptos:

More alt coins are starting to show strength as Bitcoin attempts to push into the 4100 area.  This is a market in transition and we are looking at a couple coins to add to including a new one.

Stocks:

Stocks continue to show strength though the market is starting to become complacent. There is still some room left for the market to swing higher, and until a China Trade deal is done we are likely to see a choppy range, grinding higher.

In the near term, with the market showing some type of structure, we are looking for a couple short term trades.  Keep in mind trading “B” legs of a correction are not only tricky, but risky.  Everything is 20/20 in hindsight, but getting complacent with a market is a recipe for losses.

We are also looking at some tech stocks which have good growth potential.

Forex:

The dollar is all over the place as the Fed continues to send the market mixed signals.  From a dovish, almost bearish tone in the March Statement, before inflation numbers came out and Fed Reserve Governor Quarles mentioned future rate increases “may be necessary at some point”. 

Still there are many pairs that have potential trade setups this week.

Comodities:

The Fed also shook out an overly crowded long Gold position, and there is still some room to move lower here.  Again, in the broader picture we are looking for longs, but in the short term there is a potential short setup, yet this is in a risky area.

For the time being Gold and the dollar are inversely correlated, and this goes for oil as well.  Oil looked to push higher until Friday when the dollar reversed on good economic data and the Fed speech.

News Events: 

First up is the Euro-Zone CPI index Monday morning which is a measure of inflation.  Also on Monday we get the USD ISM survey for manufacturing and employment.  The big news comes on Friday with the NFP report.

 

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