Time to Lock in Gains and Ready to Re-Join the Long Side

03/12/2018 3:00 pm EST

Focus: MARKETS

Ziad Jasani

Managing Director and Partner, Independent Investor Institute

We are likely to lock-in our gains from Feb. 9 into the close on Monday, March 12 and be happy to re-join the long side if we’re wrong. More on global markets from Ziad Jasani of the Independent Investor Institute, writing and videocasting on Monday from Toronto.

View this week’s video commentary here:

video

The late-January to early February market correction led to a macro market-swing-low on Feb. 9 followed by a higher-low on March 2.

We have treated the bounce as a “bull-trap” for longer-term investors but our community successfully played both turn-ups profitably on a swing-trading-basis (Feb. 9 replay, March 2 replay).

This week is about inflation, inflation and inflation! Tuesday, March 13 we receive US CPI (Consumer Price Inflation) before the opening bell and on March 14 (Producer Price Inflation).

A hotter than market-expected print on CPI & PPI would push the USD and U.S. Treasury yields up, which in turn would pressure Commodities down, destabilize the Bond market and likely turn the correction-bounce around.

A weaker than market-expected print on the data would do quite the opposite. Our math indicates a higher probability for a hotter print. As such we are likely to lock-in our gains from Feb. 9 into the close on Monday, March 12 and be happy to re-join the long-side if we’re wrong.

chart

We ended last week (March 9) with the S&P 500 E-Minis breaking out above resistance of 2,746-29 and the TSX moving into resistance of its 200-day average (15,604).

We added to our positions during the morning session on March 9 and had enough evidence to maintain them over the weekend (Watch our Weekly Workshop video).

Our community voted for Scenario B to transact on both the S&P 500 (SPX) and S&P/TSX Composite Index (TSX), wherein the pivot down is likely to be tied to a hotter U.S. CPI print.

Our focus on Monday, March 12 will be to lock in gains on the following trades: SPY, XBI, XPH, XLV, XLB, XLY, XLI, XLK, IYW, QQQ, IWM, XLE, RYE XOP, GLD, SLV, UGLD, USLV, XIC-T, HXU-T, HOU-T, HNU-T, XFN-T, ZEB-T, XEG-T, ZEO-T, EEM, FXI, EWZ, ACWX, FXC.

We are open to setting buy-limit orders on the same positions to be ready if inflation data comes in cooler than expected.

Video recorded: 11 am March 12, 2018
Duration: 1:21:56

View the Independent Investor Institute trading ideas and strategies videos here.

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