Yesterday was the slowest trading day of the year so far which is no surprise considering all of Europe, including London, was closed for Easter Monday. US stocks advanced a little, adding to the small gains recorded for the S&P and the NASDAQ on Thursday with both indices closing up 0.28% and 0.68% respectively. The Dow finished 0.25% higher rebounding from its small loss in Thursday’s trading session.
Thursday’s unexpected breakthrough in Ukrainian talks, which included an agreement for the disarming of all armed groups, an amnesty for most of those recently detained and the vacating of occupied streets, helped propel stock markets higher over the last few days. However continuing reports out of Ukraine, with both the Kiev Government and Pro-Russian secessionists accusing eachother of violating the terms of the agreement, are still blocking a more substantial improvement in risk sentiment and potentially higher Bond Yields/US Dollar.
This morning on the economic front we have Euro-Zone Consumer Confidence and the Gov Debt/GDP Ratio. This is followed by the US Existing Home Sales and the Richmond Fed Manufacturing Index. Later this afternoon former Fed Chairman Ben Bernanke speaks at the Economic Club.
June S&P 500
The S&P advanced for the fifth consecutive day on what was the lowest volume day for the market so far this year. It just missed my 1866 sell level before having a small sell-off overnight and I am still flat. We still have the ‘Open Gap’ from last week from 1838.5/1841 and with Bernanke due to speak this afternoon I am expecting a lot more volatility today especially with the VIX now down near the 13 level as it approaches its lows for the year.
Today I will raise my sell level slightly to 1868/1873 with a 1876 stop. I will also raise my buy level to 1853/1857 with a 1849 stop. If I am taken long and subsequently stopped out I will be a more aggressive buyer in front of 1840 with a 1835 stop.
Euro/USD
No change as I am still long at 1.3805 with the same 1.3780 stop. If I am stopped out of this position I will be a more aggressive buyer in front of 1.3750 with a 13730 stop. As I mentioned yesterday I do not want to be short the Euro until such time we see the ECB take some decisive action to fight deflation instead of just talking about what they are going to do.
US Dollar Index
The US Dollar is slightly higher this morning and today I will raise my buy level to 79.30/79.60 with the same 78.80 stop on any long position.
June DAX
The Dax rallied as expected on Thursday helped by the positive news following the 4-way talks between the US, EU, Russia and Ukraine. Last Thursday, after the initial announcement was made the Dax traded up to my 9420 sell level before having a small sell-off which enabled me to cover this position at 9390 and I am now flat. Today given the back drop that is happening in the Ukraine I will raise my buy level to 9320/9360 with a 9295 stop on any long position. My only interest today in selling the Dax is on a rally to 9500/9525 with a 9540 stop.
June FTSE
Shortly before the close of the FTSE on Thursday the market traded up to my 6580 sell level before quickly stopping me out of this position after the agreement in Geneva on Ukraine was reached at 6605 and I am now flat. This 6600 level is crucial for the FTSE going forward. I still believe that the market is going to break down as the price action so far this year in comparison to the other major indices has been very weak. Today I will be a small seller on any rally to 6630/6660 with a 6680 stop. I still do not want to be long the FTSE at this time.
Dow Rolling Contract
No change from yesterday as I am still a small seller from 16480/16520 with a 16550 stop. My only interest in buying the Dow is on a dip to 16300/16340 with a tight 16270 stop.
June BUND
Shortly after the news out of Geneva broke on Thursday the Bund was hit hard and traded down to my 143.85 buy level. I am still long and I will leave my stop the same at 143.60.
Gold Rolling Contract
No change as I am still long Gold from early yesterday morning at 1285. I will leave my stop the same at 1276 as I look for it to trade back above 1300.
Silver Rolling Contract
The Daily Sentiment Index has fallen slightly to 13% bulls but unfortunately Silver did not trade down to my 19.25 buy level and I am still flat. Today I will raise my buy level slightly to 19.00/19.30 with the same 18.70 stop on any long position.
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