Equity markets ended the week little changed to slightly higher, with no key data released, despite the weaker than expected earnings from Google and Microsoft. The Dow ended Friday down 0.03% whilst the S&P closed up 0.14% for its 12th gain out of the last 13 sessions. In China, the PBoC announced that it would abolish the floor on the lending interest rates that banks could charge. Meanwhile in Japan the elections over the weekend saw the ruling Liberal Democratic Party win comfortably thus strengthening the position of Abe who now controls both chambers of Parliament. There was little or no significant news from the G20 over the weekend with the key message being that the US’s retreat from current Monetary Policy settings would be carefully calibrated and communicated to minimise risk of shocks.
On the economic front today we have no news out of Europe whilst later from the US we just have Existing Home Sales.
September S&P 500
The S&P worked really well on Friday as the market dropped down to my 1678 buy level before having a nice rally and I was able to cover this position at 1687 and I am now flat. Friday was again a very low volume trading day and it seems that no matter what bad news is thrown at this market it still manages to rally. I still believe the S&P will trade up to at least 1720/1740 before sellers return. Today I am a buyer on any dip to 1685/1690 in small with a 1682 stop. I do not want to be short at this time despite how overbought the market is trading.
Euro/USD
The Euro worked very well on Friday as I was able to cover my long 1.3085 position from Thursday at 1.3140 and I am now flat. I still like the Euro and I am impressed that it was able to close the week over its 200-Day MovIng Average at 1.3080 thus showing me that dips below this level are to be bought. Today I will be a small buyer on any dip to 1.3090/1.3120 with a 1.3070 stop. I still do not want to be short at this time.
September FTSE
The FTSE also worked well on Friday as I was able to cover my short 6580 position from Thursday at 6550 and I am now flat. Today I will be a small seller on any rally to 6630/6660 with a 6680 stop. My only interest in buying the FTSE is on a dip to 6480/6510 with a 6460 stop.
September DAX
The DAX just missed my 8280 buy level with a 8290 low before having a nice rally. I am impressed that the DAX has been able to close over 8310 for the second day in a row but I do not want to chase the market and I wIll leave my buy level the same at 8250/8280 with the same 8230 stop. My only interest in selling the DAX is on a rally to 8400/8430 with a 8450 stop.
September BUND
No change as I am still a buyer on any dip to 143.60/143.80 with a 143.30 stop.
Gold Rolling Contract
Gold has gapped higher overnight on the Japanese Election news and is now trading over 1310. I am going to stand aside to see how the market trades today before making a new trade tomorrow.
Silver Rolling Contract
Silver just missed my buy level before trading higher. Today I will move it up to 19.40/19/70 with a 19.15 stop which is just below last weeks low.
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