Equity Markets had modest gains in Europe yesterday, although rises in the US were more modest, weighed down by the soft tone of US data. The Spanish Government sold 2-7 Year Bonds at auction at chunky yields with their 10 Year Bonds continuing to trade around the 7% mark. Meanwhile the French Government sold bonds at record low yields and the Irish Debt Management Agency outlined its plans to issue bonds for the first time since Sept 2010 with yields falling back below Spanish yields and not far from Italian levels. In other news, the economic data released yesterday was all on the weak side. UK Retail Sales only rose 0.1%. The Weekly Jobless No’s in the US rose to 366K from 350K, the previous week, Existing Home Sales fell 5.4% and the Philly Fed Report came in at -12.9 versus the -8 expected. In the US today we have the monthly expiration of all stocks but not futures which should add to the volatility.
Sept S&P 500
Today is Nominal Expiration for the cash stocks and can lead to quick moves in both directions. The S&P just missed my sell level yesterday and I will leave the same parameters in place where I will look to buy from 1360/1364 with a 1358 stop and I will to go short from 1376/1380 with a 1383 stop.
EURO/GBP
This is the first time I have commented on this currency pair but I feel we are at a very interesting level. Th continuing strength of Sterling is very curious given how weak Retail Sales are. Persistent selling of the Euro on various crosses offers the best explanation for Euro/GBP dipping briefly below 0.7800 and today I will look to go long this market from 0.7780/0.7800 with a 0.7750 stop.
Sept FTSE
The FTSE worked out well yesterday and I was able to take profit at 5680 on my 5645 long and I am now flat. Today I will to go long on any dip from 5635/5645 with a tight 5620 stop. If I am taken long I will look to take profit from 5670/5690.
Sept DAX
The DAX rallied up to my sell level at 6750 and I am now short. I dont have huge confidence in this position as the market refuses to give up much ground as it continues to grind higher. I will leave my stop the same at 6780 and I will look to take profit on any move back to the 6700/6720 level.
EURO
The Euro traded down to my buy level at 1.2250 and I will leave my stop the same at 1.2215. I will look to take profit from 1.2290/1.2310 as we seem to be trading in a very tight range presently.
USD/JPY
I am still long at 78.40 and I will leave my stop at 78.40 and my take profit from 78.95/79.10.
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