The Non Farm Payrolls data and ISM Manufacturing data lifted equity sentiment on Friday with the Dow closing over 14000 for the first time in nearly 6 years. Stocks in the US rose from the open to close near multi-year highs. Whilst the headline print on payrolls was marginally shy of expectations, there was some sizable revision to history. The 0.1% rise in the Unemployment Rate kept continuing hopes of Fed QE well and truly alive. More spice came from the subsequent releases of better than expected ISM Manufacturing data. There was also a welcome reading on Consumer Sentiment from the late January University of Michigan Consumer Sentiment survey after last weeks disappointment from the Consumer Board Consumer Confidence measure. For the major currencies, the rally in USD/JPY and Eur/USD continued on Friday with new cycle highs for both pairs though EUR/USD ended the New York session 70 points back from its 1.3711 high and USD/JPY just failed to hit .9300.
This morning on the economic front we have UK PMI Construction, followed in the Euro-Zone by Investor Confidence and PMI. There is very little data due in the US apart from the ISM Non Manufacturing composite.
March S&P 500
The S&P is still following my roadmap as I am looking for a top in the market over the next seven days. After the better than expected Payroll Nos on Friday the S&P traded up to my 1509 sell level. As I had a very good week last week I will leave my stop the same at 1515. If I am stopped out I will use any subsequent 5 handle sell-off to go short with a new stop just above whatever high is put in. I do not want to be long the market at this time as we are now very overbought on both a daily and weekly basis.
March USD Index
Friday showed me why it is far safer to have my US Dollar trade via the Index rather than the Euro given how volatile the Euro is trading. The Euro traded up to the crazy price of 1.3711 before having a nice sell off in late trading in New York and this is continuing in Europe this morning. As you know I bought the USD Index at 79.10 on Friday and, after I posted, we traded down to 78.95 giving everyone a chance to get long. We are now trading over 79.30 and I will raise my stop to 78.95. I will also look to take profit in front of 79.60.
March FTSE
The FTSE followed the S&P higher on Friday and we traded up to my 6310 sell level. Just like the S&P I am going to keep this position with the same 6330 stop. To me the FTSE is trading heavy this morning and I will look to take profit on any move back to 6250/6260.
March DAX
The Dax also traded up to my 7850 sell level on Friday. As I am short both the S&P and the FTSE I have cut my Dax position this morning at 7825 and I am now flat. If the Dax trades up to 7860/7890 I will go short here with a 7905 stop.
March BUND
The Bund worked really well on Friday and I was able to take profit at 142.38 on my 141.70 long position and I am now flat. This morning the Bund is still oversold and I will look to reset my long position on any dip to 141.50/141.75 with a 141.40 stop.
GBP/USD (Cable)
I was stopped out of my 1.5800 long position on Friday at 1.5770 and I am now flat. Cable is now back at the very important 1.5670/1.5700 support zone and I am a small buyer in the area with a tight 1.5650 stop.
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