After I wrote my commentary yesterday China released its Industrial Production and Retail Sales Reports for August which both beat expectations and helped send Global Equities higher, with the Dax and FTSE both ending the day 2.1% and 1.3% higher respectively.The Dow managed to close with a gain of 0.8% as Syrian tensions eased. The US Dollar had something of an up and down day with US Bond yields continuing to climb back up in what was a choppy trading day.
On the US Economic front the Small Business Optimism Index was steady in August whilst risk assets continued to garner support from news of Russia’s diplomatic solution to Syria with no military action. Overnight President Obama addressed the US Nation with an assist from an unexpected source, the benefit of additional time, as military action is averted for the time being to see if Syria will hand over their chemical weapons and at the same time slow the vote down with Congress as Obama tries to gain support from the UK and France in the event that Syria does not comply.
This morning on the economic front we have the UK Unemployment Report and Average Earnings, German CPI and later from the US we have MBA Mortgage Applications.
September S&P 500
The S&P traded up to close the Gap left from August 14th at 1682 and at the same time hit my sell level. I am still short and I will leave my stop the same at 1687. If I am stopped out I will look to reset my short position if we get a subsequent 5 handle (point) move down from whatever high is put in with a stop above this new high. The S&P is trading at the top of the Bollinger Band and Williams Index in overbought territory and I feel the market should have difficulty getting through this resistance zone. I will also be a small buyer on any dip to 1665/1669 with a 1663 stop.
Euro/USD
The Euro traded down to my 1.3240 buy level before having a small rally and I was able to cover this position at 1.3275 and I am now flat. Today I still like the Euro as long as we can hold over 1.32 and I will be a small buyer on any dip to 1.3200/1.3230 with the same 1.3195 stop.
September DAX
Unfortunately after I closed my long 8260 long position at 8340 yesterday morning the market just took off on the Chinese data release and traded up to a high of 8480 for an incredible 180 point rally. At least I decided yesterday that I did not want to go short the Dax at this time so no harm done. The Dax is not as overbought as the S&P but is approaching key resistance from 8490/8520 and I will be a seller in this region with a 8535 stop. My only interest in buying the Dax is on a dip to 8340/8370 with a 8320 stop.
September FTSE
The FTSE finally manged to break and close over 6562 which is bullish and I will be a small buyer on any dip to 6530/6560 with a 6515 stop.
December 10 Year Treasury Bond
I was lucky yesterday as the market dropped down to my 122.80 buy level before having a nice rally and I was able to cover this position at 123.10 and I am now flat. Today I will leave my buy level the same at 122.50/122.80 with the same 121.95 stop.
December BUND
I was stopped out of my small 137.40 long position at 136.95 but unfortunately the market just missed my 136.60 buy level with a 136.62 low. The Bund is very oversold and today I will move my buy level higher to 136.60/136.80 with a 136.40 stop which is just below the low made last week.
Gold Rolling Contract
Gold had a very weak day yesterday and in the process traded down to my 1365 buy level. As I have mentioned over the last two weeks, 1350 is key for Gold going forward as a break and close below here will be very bearish. I will leave my stop the same at 1349 on my long 1365 position.
Silver Rolling Contract
Silver also had a bad trading session yesterday as the market dropped down to my 22.90 buy level. I am still long and I will leave my stop the same at 22.40 which is just below the key support of 22.50.
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