US Equities have ground out modest gains in late trading yesterday, though its is hard to credit the improvement directly to Ben Bernanke’s Senate Banking Committee Testimony even though he was very much on message offering a detailed rationale for why the benefits of maintaining the current QE/low yield programme continues to outweigh the cost and giving no indication that the FOMC might cut short its QE3 Bond buying. Mr Bernanke was also forceful in arguing that allowing the so called sequester to kick in from Friday would hurt jobs and incomes and could damage the cause of deficit reduction by hurting growth, also playing to the view that the Fed is intent on keeping the pedal to the metal.
The failure of early-day Italian-centric pressure on European markets to turn into a rout had been helpful to the cause of risk. Though Italian bond yields predictably jumped at the European open yesterday morning with 10 Year Yields rising 41 bps on the day, they held below the crucial 5% and the Euro/USD for now has been spared a test of the critical 1.3000 Level. It is worth noting that US Equities were helped by the impressive increase in January New Home Sales which rose 15.6% to 473k whilst Consumer Confidence jumped to 69.6 from 58.6 and much better than the 62.0 expected.
On the Economic front this morning we have UK GDP at 9.30 am whilst, from the Euro-Zone, we have Consumer Confidence and the Business Climate Indicator. Later in the US we have Durable Goods Orders, Pending Home Sales and Bernanke’s testimony to the House. It is also worth noting that Dragi is due to speak in Munich later.
March S&P 500
The S&P traded higher as expected ahead of Bernanke’s speech to the Senate Committee before having a nasty sell off only to rally late on ahead of his testimony to the House later this afternoon. I covered my long 1491 S&P position at 1496 before his testimony and I am still flat. The market closed back above the important 1490 level which is the key support going forward. Today I am going to stay flat until after the testimony and then try and react after his speech. I am a small seller on any rally to 1501/1505 with a 1508 stop and I will also look to buy the market on any sell off to 1480/1484 with a 1477 stop.
Euro/USD
The Euro worked well as shortly after I posted it dropped down to my buy zone. I bought at 1.3045 and I took a nice gain at 1.3095 ahead of Bernanke’s speech and I am now flat. I still like the Euro in front of 1.3000 as we are very oversold and at the bottom of the Bollinger Band and near the bottom of the Williams Index. Today I will look to reset my long position on any dip to 1.3020/1.3050 in small with a 1.2995 stop. I do not want to be short at this time.
March FTSE
Very unlucky in the FTSE as it just missed my 6280 sell level with a 6277 high before following the S&P lower. Today I will raise my sell level to 6300/6330 with a 6345 stop. I will also look to buy on any dip to 6230 with a 6195 stop.
March BUND
The Bund did not sell off this morning and instead traded over the 145.00 area that I have been looking for over the last two weeks. I am going to stay flat and I am not going to chase the market higher from here. I will look to reset my long position on any dip to 143.90/144.25 with a 143.70 stop.
GBP/USD (Cable)
Cable also traded down to my buy zone and I bought the market at 1.5130 before we had a nice rally and I was able to take a nice gain at 1.5180 and I am now flat. Cable is still very oversold and as you can see how quickly Gold has reversed higher, I am looking for a similar move in Cable over the next while. Today I will look to reset my long position on any dip to 1.5080/1.5110 in small with a 1.5050 stop. I do not want to be short at this time.
Recent Comments