redback report week ended 11/2/2011, page-8

nice report redbacka, great effort as per your usual excellent quality.

{I can understand why you're adding to longs. But the market just looks ready for a rest. Not necessarily anything drastic.} - agreed nothing wrong with taking some nice profits out at this time to protect them ...


I'll see your CRB chart, and raise you ... Opt1, 2 or 3?


Currently sitting on the 50Fib retrace of GFC (red) and the 150Fib extension (blue). There is every reason to fail this level. Back up to 345 is another breath of life into commodities. Gold hasn;t left the building yet, copper and coal (DJUSCL) looking decidedly shakey.

Not a failure of CRB, but certainly a big warning with plenty of divergence. I use longer RSI (21) and MACD - so when my RSI crosses below 50 it's curtains. MACD diverging but still above 0.
CRB index with a longer RSI - click here

Then there is copper ... is this a duracell moment? or is it going to top higher ... hasn't failed yet.



But the banks are healthy and making the most of an unexciting OIS and Libor - remains unchanged. OIS 3mon looks to be bottoming, Libor rising slightly.


Would be an opportune time to put some VIX contracts in the drawer - down to 15.0 or so I think. Long end of the yield curve rising - I wonder if the US Gov't managed to rollover enough debt into the long end - unless they see it going lower again. VIX changes over this week, so watch a false spike Mar contracts currently at a premium +1.5 to Feb.

USD has looked like it has bounced, which might throw the cat amongst the commodity pigeons.