The Euro and Equity markets rebounded sharply after the better than expected employment and housing data yesterday.The housing market is a necessary, if not a sufficient condition, for sustained US economic recovery and all the data this week has shown improvement in that sector. The improved economic data and rising money supply data should support stable rather than falling inflation.
Euro
The Euro bounced from the 1.2970 area and looks to test 1.32 level which should offer strong resistance.
S&P 500
Despite Thursdays strong rally the McClellan Oscillator remains negative.The Market is testing the year’s high at 1258 and we should have very strong res up to 1270 which is the high from last May. A closing break of this level will lead to a test of 1400/1420. I am going to stay neutral for now to see how the market behaves in this area.
Gold
Gold hit our 1705 level and bounced nicely to 1730. But it still needs a break of 1763 for me to consider going long.
Dax
The Dax also bounced off the 6650 level and is testing 6800 again. Strong res from 6800 to 7000 going back to last July when we fell 1000 points in a week.
Crude Oil
March Crude continues to hold up well despite lower demand and is testing the 103 area which is the top of the Bollinger Band. I aim to take profits here and go flat.
USD/JPY
If US Bond yields continue to rise it will support a weak Yen. Next upside level is 79.5.
Recent Comments