Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Four Trading Mandates- The New Normal

As first quarter equity earnings season winds down, traders are seeing a flight to safety on the days that risk (read stocks) is being sold, with a flight into the Swiss franc. On days that Usd/Chf remains inside the previous session high and low, the major currencies will struggle to easily break and hold the previous session ranges. The pattern will be closely monitored, as it also signals potential global market disdain for the Usd, in response to the manipulation being seen on a daily basis as the constant struggle to balance US administration debt is undertaken.

March 2011 was the first time that a first-of-the-month S&P 500 equity trading session finished in the red in the last seven months. This signals potential weakness in stocks for March, unless buyers step in to hold 1295 S&P 500 support by the close of trade this week. Over the last twelve months the first trading sessions of each month have generated close to 15% cumulative returns, while the rest of the week’s sessions account for around 3%.

On the week that Non-farm Payroll numbers are announced and scrutinized, the headline-reading equity trading algorithms will be on high alert. Volatility will be rife, even though small average daily trading ranges are confirming that liquidity is still low, and that intra-day ranges will be hard to break. Traders are seeing as much price action in the futures market as they are in cash trade, which adds to the ability of the markets to quickly change sentiment.

Buying support and selling resistance, in-line with mid-term trend and momentum reads, will remain a consistent pattern of trade; all of the time that market participants continue to see US dollar and US Treasury manipulation there will be good reason to hold existing ranges. Global market correlations are struggling to keep pace with evolving headlines, which over the last 12 months have reported more Black Swan events than at any other time that most could remember.

High intra-day volatility, weak inter-market correlations, high cost of inter-bank carry, low liquidity, low average trading ranges across most asset classes. high insider selling to buying ratios in US equities, commodity revaluations into asset classes that resemble ETF’s rather than commercial hedges, record yearly outflows from US mutual funds, record low interest rates that cannot trigger growth, central banking manipulation, synthetic inflation, global civil unrest. These have all come together at one time to create an investment arena that has a new normal in regard to speed of reaction to breaking headlines, and the ability to switch gears and direction at extremely short notice.

Bank early, bank often, buy support, and sell resistance; four mandates that sit atop the list of the new-normal trading arena.