In yesterday’s North American session the S&P 500 futures drifted downwards in early trading but bounced exactly at the 1340 level.

Following the breakout earlier in the week the index has moved up more than 15 points - although it has been sliding during the overnight and European session and is currently at 1350.

I'll repeat my bullish stance towards this index with two previously mentioned qualifications:

1. A dynamic move below 1338 would push me onto the sidelines.

2. A topping out of the euro and Aussie dollar would also not only make me less confident on the long side but tempt me to get short the index.



The weekly chart for spot silver is developing the kind of parabolic price behavior which could, in my estimation, lead to a blood bath at some point in the not too distant future.



I am watching AUD/USD rather closely in today’s session as there were some indications during yesterday’s trading that some large players may be liquidating long positions to book profits.

The 1.07 level would be an intermediate-term target but I would be prepared to exit quickly if the Aussie takes out the 1.0950 level.



In my column from April 21, I cited the bearish case for BAL, the ETF which tracks the price of cotton futures, and which can be found here .

I would suggest that now would be an opportunity to cover 2/3rd of the position if you decided to act upon this suggestion and I would leave the remaining 1/3rd for a potential test of the 200-day EMA at the $80 level.



Clive Corcoran is the publisher of TradeWithForm.com, which provides daily analysis and commentary on the US stock market.