If you had looked woken up this morning, looked at the new releases on the US Economy yesterday and how the US Bond and Equity markets had traded, you would have been surprised at all with the prices on the screen, irrespective of what has and has not been going on as far as Greece is concerned. There were two main pieces of US Economic readings released, the Personal Income and Spending Report for May and Weekly Jobless Claims ahead of Non-Farm Payrolls which are due next Friday.
Personal Income rose another 0.5% in May as expected, with Consumers stepping out and spending an additional 0.9% after a modest upwardly-revised 0.1% in April. Take out inflation of 0.3% and real Consumer Spending rose a solid 0.6%, putting real Consumer Spending on track for a 3.0% gain in Q2 after Q1’s 2.1% rise. Consumer Spending is coming through with still moderate core inflation.
The Headline Deflator rose 0.3%, but the core PCE Deflator by an additional tepid 0.1% for annual growth of 1.2%, still well below the Fed’s 2% medium term target.. So new PCE core inflation trigger for rate lift-off but renewed confidence on growth should deliver more confidence that spare capacity is diminishing that will lift inflation. Weekly Jobless Claims remained low and would not have deflected expectations of another solid Payrolls Report next week.
And then there was Greece. And still no deal. Greece was given until 11 am to come up with a revised deal. None was forthcoming by that time though one did surface an hour later. After discussion, that counter proposal was not acceptable to the creditors with the meetings breaking up for another day. Today the EU Leaders Summit continues for a second day with the possibility of continuing into the weekend. Interestingly the National Bank of Greece did not seek ELA Liquidity Assistance from the ECB yesterday, so likely seeing reduced daily Greek Bank Deposit Outflows.
This morning on the economic front the only data of note due from either the UK or the Euro-Zone is EU Money Supply which will be released at 9.00 am. The only US data today is the University of Michigan Consumer Confidence at 3.00 pm. Later at 5.45 pm the Fed’s George will speak in Kansas City.
September S&P 5OO
The S&P plan worked well yesterday as shortly after the US markets opened the S&P traded lower to my 2098 buy level before having a nice 10 Handle rally which enabled me to cover this position at 2104 as outlined earlier to my Platinum Members and I am now flat. Subsequently the S&P got hit hard for the second consecutive day into the Chicago close. Today as I still expect Greece to be given some deal that will eventually be agreeable to both sides and the fact that we that we should see some buying ahead of Month-End on Tuesday I am reluctant to go short the market. For this reason I will again be a small buyer from 2085/2090 with a 2081 stop.
EUR/USD
The Euro plan also worked very well yesterday as shortly after I posted the Euro traded lower to my 1.1160 buy level before having a nice rally which enabled me to cover this position at 1.1210 as again outlined to my Platinum Members and I am now flat. Today I will again look to buy the Euro on any dip lower to 1.1120/1.1150 with a 1.1080 stop. However for me to turn more bullish we need to see the Euro break and close over 1.1250.
September Dollar Index
No change on what was a very quiet trading session for the Dollar in general yesterday. Today I will still be a small seller from 95.90/96.20 with the same 96.60 stop.
September DAX
I am still flat the DAX as the saga continues as to whether we are going to finally get a Greek solution to this whole mess. I still believe that we will but I am going to leave my buy level the same just in case we get a negative headline. So today I will still be a very small buyer from 11280/11330 with the same wider 11210 stop. I still do not want to be short the DAX at this time.
September FTSE
Overnight the FTSE has traded lower to my 6730 buy level. I am still long and today I will raise my stop on this position to 6695. Given the fact that we have Month-End next week I am reluctant to go short at this time.
Dow Rolling Contract
The Dow plan worked well yesterday as the market had a nice sell-off shortly after the US markets opened which enabled me to go long at 17960 before having a nice spike higher which enabled me to cover this position at 18010 and I am now flat. Interestingly the US stock market generated another Hindenburg Omen which is the forth one so far in June. The fact that we got a second confirmed Hindenburg Omen in the last two weeks does not bode well for the US stock market over the next three months. Today I will be a small seller on any rally higher to 17970/18020 with a 18060 stop.
September BUND
The BUND had a nice sell-off after I posted yesterday morning but the fact that I mentioned that I was not too comfortable in been short at 151.40, I moved my take profit level higher to my Platinum Members to 151.20 before the market got hit hard to the downside and I am now flat. The BUND has good support from 150.30/150.65 and today I will be a small buyer in this area with a 149.95 stop. Despite the negative price action I do not want to be short the BUND at this time.
Gold Rolling Contract
No change as I am still a small buyer on any dip to 1160/1166 with the same 1154 stop.
Silver Rolling Contract
No change as I am still long at 15.90 with the same 15.50 stop. Again if I am stopped out of this position I will be a more aggressive buyer on any further dip to 14.80/15.30 with a 14.40 stop.
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