The MST indicator generated a short signal yesterday on the big decline across the equity space. Contrary to my previous post, long DAX30, I am now short the US futures, creating a net neutral equity exposure. I find program signalling in the equity space to be very short term volatile. Given the melt-up support for equities, this short position could very easily prove to fail. I placed my stop as per the chart below, just above the pivot high from yesterdays bar.
Looking at the Bond markets, specifically BUXL futures, the market has arrived to a supportive chart location, short term anyway – with space below 182. The BUXL has had a big move down from the ~195 level. I have been short since 9/30 and its looking like this trade may be ‘too short’ near term. If the bonds continue to bail, ie., BUXL < 182 on daily closing basis, the stocks are going higher. If the BUXL finds support, we could see some erosion in the DAX30 futures.
On a different note, I like the ‘feel’ of the soft commodity space from the long side; Cotton/Lumber/Coffee. I am currently long Lumber and Coffee. The energy space, with Oil currently in ‘seasonal trading’ for the MST program generated a long signal yesterday. I don’t like the trade location right now, with Oil having moved up from ~$42 in the past 3 weeks – so I’m watching it. But, the commodity space (softs) are long trades in my program, suggesting a risk-on feel, still. Then having said that, everything could dump real quick. As it relates to my program in 2016, with asset conditions having generally been volatile, range-bound markets, there have been frequent inflection points/directional changes – reflecting complete lack of volatility./certainty – which has made for navigating some tougher trading this year.
Futures Trading 