We start the week with very poor sentiment following a softer than expected Non Farm Payrolls from the US last Friday and both incumbents losing elections in France and Greece. Uncertainty surrounding the US recovery and Europe’s ability to tackle its Sovereign Debt problems have Equities well lower this morning. The Hollande win in France is not a surprise however it brings home the reality that incumbents following the austerity measures imposed by Europe are going to find it hard to get re-elected.
NOTE: All comments below refer to the June Futures Contract in each instrument
S&P 500
I am glad that I was flat going into the Non Farm Payroll’s last Friday. The S&P quickly dropped to my buy level at 1370 which looked okay for a while but then stopped me out near the close at 1365. We are now back at the very important 1340/1350 level. If we break below 1340, the market should trade back to 1321 where we still have a gap from early February. We are very oversold here and I am going to play the gap by buying from 1345/1350 with a 1339 stop. Again I am only trading in small lots with wider stops, giving myself some latitude, given how volatile the markets are.
Euro/USD
I covered my short Euro position last night at a nice profit. We are now at the very important 1.2950/1.3000 level, a break of which will lead to a test of 1.2800. I will buy in front of 1.2970 with a 1.2930 stop looking for a move back to 1.3050 where I will look to take profit.
DAX
The DAX never hit my buy level on Friday and then had a big gap down this morning which was very fortunate. I have gone long at 6440 in very small position, as we need bigger stops here, and I have left a stop at the low of the day at 6370 looking for a move back to 6500/6550 which will now be big resistance.
Crude Oil
Not a kind contract for me over the last week as Crude fell 12% in 2 days which is almost unbelievable. Again it shows the importance of stops. I was stopped out of my 101.10 long at 100.40 on Friday and I am now flat. The market traded down to 95.40 last night. I will look to reset my long again if the market drops back to 95.50/96.00, as we are so oversold here, with a 95.00 stop.
Bund
The Bund has had a large move up on the back of the weak Equities and I will look to sell from 142.80/143.10 with a 143.30 stop.
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