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A Seasonal View

4/19/2015 10:15:58 AM

Good morning Traders,

With Friday's weakness, a down-trending consolidation is in place. The consolidation makes it difficult to leverage at trade in the rapid 1-2 day short term moves, but at some point, the market will break in one direction or the other out of the consolidation. So we have to be prepared to act on that break.

That being said, let's take a seasonal look at our key vehicles:

QQQ Seasonality versus 2015

While I pointed the arrow lower, there's a high likelihood of a continuation of the advance. There hasn't been more than one day of follow through on these large one day down moves in some time.

Bonds Seasonality versus 2015 TLT

Bonds are the key, but they'd have to move back and retest highs if the stock market is going to remain weak.

USD Seasonality versus 2015

I'm still leaning towards the dollar consolidating the very large recent move higher. That will help other assets.

Gold Seasonality versus 2015

But gold is done - the move should continue lower for a long time...

USO Seasonality versus 2015

Oil on the other hand, has significant potential. It's not always driven by production and storage levels.

UNG Seasonality versus 2015

Nat Gas is relatively new for us, so we're still looking at underlying trading patterns in the derivatives to draw more conclusive trading. We look at about 10 variables of trading these commodities for correlative approaches to trading. We're not rushing it. But we'll periodically test our findings with trades when the opportunities arise.

Putting it all together, the stock market could break here, but the consolidation that started with the 3/2 peak is continuing and behaves pretty normal. I'd expect a day of weakness and a pause then another push higher to bring this 5 year rally to a more significant end...

Regards,

 

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