Sunset Strip | Aussie Afternoon Institutional Market Wrap

Aussie market started positive on the back of stronger US market, commodities and currency but ran out of puff to give up most of the gain by the close. The markets are running on commodity prices and currency trade. AUDUSD has reached the 2015H1 trading band of 76-80 cents as we expected. The commodity bounce was expected post CNY, but it has lasted a lot longer than anyone expected. As much as the market keeps searching for anything to support the story, we see much more downside risk than upside risk in commodities. Get ready for profit taking!!! The volatility indices in US and Australia are showing heightened risk of profit taking in the short term. Time to be patient and pick the time to add more exposure…maintain long Yield and Gold, short Iron Ore and Oil!!!! We see short term profit taking risk in the global markets and commodities are not immuned to this. We have had a relief rally while the outlook remains weak. You can’t lose money locking in profit!!! (VIEW LINK)