€/$ the cycle

In the last 2 years, €/$ had three strong rebounds.

1) 2015 Mar-Aug- low to top: rebound length was 23 weeks, 161 days, approx 12%

2) End 2015-May 2016: rebound length was 154 days, 22 weeks, approx 10%

3) Actual rebound since January: 140 days, 20 weeks approx 9%

Summary: if history repeats, €/$ has 2-3 weeks of time before topping

Forex Gaps follow up (and short eurjpy)

At the end of April I wrote a post about many technical gaps on main fx euro crosses (eurusd, eurchf, eurgbp and eurjpy)

I wrote that usually these gaps in main crosses tend to be closed in short time. I admit that they are lasting longer than I thought.

My favorite position on the short was the eur/gbp and it's the only one that has closed the gap. I haven't traded eurgbp, because I already have a strategic Brexit long gbp positions since last year, therefore I didn't like add further risk on that idea.

After thinking for a while I decided to open a short on eurjpy. I dismissed the chf because of SNB is continuing to complain about Franc strength. I also avoided the eurusd because I have a structural long $ position already in portfolio.
The choice was the JPY. It's usually a "risk on/off" currency and being long equity ETF by models, the short eurjpy could be an hedge.

Of course is not going well so far....
I shorted eurjpy a bit below 123 and now the cross trades above.
It's stronger than anticipated, but I confide in the power of "gap magnet"..
I would have been definitively more confident if eurjpy never closed above 123.50 (an important resistance level), but I didn't use leverage and can sit tight on the chair waiting for developments.
The target is 118.50
Above 129 I could stop the short and place a sell limit order at a lower price if touched in the case after my stop is hit, price will begin to drop.

Performance in the first 4 months

Here the Model performances in the first 4 months of 2017.

The more conservative models (1&2) are negative ytd, especially the model 2 that is paying the wrong timing on gold in March.

The many versions of Models 3 are performing quite well, with performance between approx 5 and 8%. Not bad.

The models 4, more diversified and applicable with bigger accounts, are having their good time. In Europe they're beating their benchmark (asset equal weighted), while in the US are under-performing

Below the table with the monthly performance and the summary charts ytd resume.

MAY ALLOCATIONS

This is the Asset Allocation for May.
Some minor changes, with UK govies bought in models 3 and Model 2 investing again on HY€
Bought US equity as well