Sell stocks on cyclical bearish trend line

The Dax closed at 4675 on Friday 24 of April reaching the high of the 17 of April at 4680.
This is a very important level. Clear overbought indicators are warning that this rally might be overdone. Some front running trend indictors are showing the first signals of a trend reversal.
In addition the cyclical bearish trend line is passing here, suggesting that the next 2/3 week will be characterized by a sell off in stocks.

Trading sell this level at 4675
Stop 4850
Targets 4400 & 4250

Playing The Resistance

AUDUSD seems a bit overdone at these levels. The huge stock market rally pushed the Aussie above initial resistance at 6800 & 7000. Some overbought signals and an upcoming divergence can been taken to open short positions. Under the circumstance that stocks & commodities will trade lower this weak, the pair has potential to trade again below sub 6800 & 6500.

Trading: Sell 7200/ Stop 7500/ Target 6600

Sell STX in the rally

The stock market rally was about 18% in march( low 9MARCH – high 27MARCH). This was the the month with the higher gains in stocks since 1982. The rally was supported by bulls with an optimistic view on the G20 meeting on 2APRIL.

The chart is facing some resistance in this region, in addition we have overbought indicators at current levels. At the moment Stock indicies look overdone and a big bearish trendline is passing in this 4200 region.

Trading:
Sell 4200
Stop above 4500
For retest 3600 / close 3700 / we expect nice bids supporting the market on that level

***click on the chart to see the DAX

EURCHF Upside Potential

CHF Still Safe Heaven?

EURCHF looks undervalued at these levels. The interest rate differential and fair value models suggest a higher level e.g. 1,53 in Q2.
In addition the SNB intervention menace should limit further EURCHF downtrend potential.

I recommend to Buy EURCHF at 1,4650 lvl
Stop 1,4300
For Target 1,5140

Stock Market, is it a Bull Trap?!

Since the bottom we saw in mid January at 4060 in the DAX, stocks are trading significantly higher. The recession just started Macro Indicators are still pointing to the south.
At first sight it looks like the DAX has build a good base forming a triple top. But I would keep cautition going long stocks as the big picture looks still bearish.

Hold an eye on EURJPY this week, as it is a good indicator on what stocks are doing. There is a huge bearish trend line at 120. A break would lead to 130 in the short term (highs end of DEC). These levels would lead to higher stock and 5000 points in the DAX.

My trading recommendation is to sell the rally trough 5000-5200 with stops above 5500 where we do see the 200 Moving average & a cyclical bearish trend line passing.

**click on the picture to see the charts**

Closing Short DAX Position

We closed the open short Dax position 19Jan @ 4451. Unfortunately our stop profit order was triggered and we locked-in 98 points on that trade. We profit we made is 392. For the moment we do not expect other signals on the VBT Model.

**Fixed Income Strategizer**- USD 10 Year Yield

• 1998 low was 106 basis points lower than 1993



• 2003 low was 102 basis points lower than 1998



• 2008 low was 103 basis points lower than 2003

5 year cycle low? Too early to say yet, but that is definitely a possibility.

Performance Report VBT Model

Total # of trades 45 ( 30 long/ 15 short)
Percent Profitable 71,1%
Average Winning Trade 2346.1
Average loosing Trade 1797.4
Largest loosing Trade 8514
Maximum Drawdown 9070.9
Return on Max. Drawdown 570,1%

Performance VBT Model since 1992

VBT DAX open short position

This short position was opend the 8Dec08. We sell 4 CFDs @ 4549. The dynamic stop loss is for the moment above 5500.