The Euro stands as the worst performing currency over the past 24 hours, while the Japanese Yen outperformed. For the Euro, it was the breakup of the Euro-Zone Finance Ministers Meeting in Brussels that failed to come to any mutual agreement with Greece over its financial future. Greece is asking for a six month bridge to allow time to negotiate a new plan while the EU Ministers want Greece to stick to the current agreement that an unnamed Greek Government official said was absurd and unacceptable, not that Greek Finance Minister Varoufakis would flinch from those thoughts at all.
At the end of the day we had no deal which was something of a disappointment for the markets after what had seemed to be the makings of a spirit of a compromise last week. After holding its ground since last Friday the Euro has pulled back from over 1.1400 to 1.1350 this morning.
European Bourses are opening weaker this morning with the Athens Index naturally getting hit the hardest after yesterday’s 3.8% decline. Greek Bonds are again selling off though this seemed to be mostly before the Euro-Zone Finance Meeting outcome. The situation in Ukraine seems to be worsening again after the agreed cease-fire on Sunday night and this news is not helping the DAX.
Yesterday’s weaker than expected Q4 Japanese GDP did not see the Yen weaken but rather hold its ground and even strengthen a little. Markets and Japanese Officials have been second guessing whether a declining Yen is good or bad for consumer confidence and spending, still soft consumer spending a continuing feature of Japan’s post-sales tax hit from last April.
This morning on the economic front we have UK CPI at 9.30 am. This is followed at 10.00 am by the very important German ZEW Survey. At 1.30 pm we have the US Empire Manufacturing Index. Finally at 3.00 pm we have the NAHB Housing Market Index.
March S&P 500
Considering that the US Markets were closed yesterday the S&P Future traded with a reasonable range for the few hours that the Futures markets were open. After trading strongly during the earlier part of the session the S&P just missed my 2095 sell level with a 2094.25 high before selling off on the Greek talks breaking up in Brussels. This move lower has seen me going long the S&P this morning at 2081. I am still long and I will leave my stop the same at 2074 on this position. As I mentioned yesterday the key support for the S&P is from 2065/2070 and if I am stopped out of my long position I will be a more aggressive buyer in this latter zone with a 2059 stop. Today I will still be a small seller on any rally higher to 2095/2100 with the same 2105 stop.
EUR/USD
The Euro plan did not work out as expected yesterday as after taking profit on my 1.1390 position at 1.1420 the Euro subsequently fell hard on the break-up of the Greek talks which saw me go long the Euro at 1.1360 only to be very quickly stopped out of this position at 1.1330 and I am now flat. I still believe that the Euro is a buy on dips and today I will again look to go long on any move lower to 1.1250/1.1290 with a wider 1.1195 stop. I still do not want to be short the Euro at this time as a break and close over 1.1534 will be very positive.
US Dollar Index
No change as I am still a small seller from 94.50/94.80 with the same 95.20 stop.
March DAX
The combination of the breakdown in talks over the Greek debt and the escalating violence in Ukraine is really weighing on the DAX this morning with the market now down 1.2% after making new all-time highs last Friday. The key level to watch for the DAX is at 10660, as a break and close below here will be very bearish. Today having bought the DAX late last night at 10850, only to be stopped out of this trade at 10795 this morning, I will again look to buy the market on any further dip lower to 10690/10730 with a 10645 stop.
March FTSE
The idea of selling rallies in the FTSE continues to pay dividends. The FTSE had a nice sell-off overnight which allowed me to cover my 6830 short position from last Friday at 6790 and I am now flat. Today I will again be a small seller on any rally higher to 6825/6850 with a 6870 stop.
Dow Rolling Contract
I am still flat the Dow and today I will move my sell level lower to 18020/18070 with an 18110 stop which is just above the all-time high made on December 26th 2014.
March BUND
After the break-up of the Greek talks yesterday afternoon the Bund started to rally with the market eventually hitting my 159.25 sell level. I am still short and today I will leave my stop the same at 159.60 on this position. If I am stopped out of this trade I will be a more aggressive seller in front of 159.90 with a 160.20 stop.
Gold Rolling Contract
No change as I am nervously long from last week at 1233 with the same 1217 stop. If I am stopped out of this position I will be a more aggressive buyer on any dip lower to 1205/1211 with an 1198 stop.
Silver Rolling Contract
Silver is getting hit hard this morning with the market 3% lower from where I marked prices 24 hours ago. This move lower has led to me going long the market again at 16.90. I will leave my stop the same at 16.40 on this position.
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