Stock markets ran out of steam yesterday as weaker industrial production data, a lack of indication of further easing from the BOE and higher bond yields in Spain, which rose to a high of 6.98%, weighed on investor sentiment. Agricultural commodities continue to rally on US drought concerns. The BOE inflation report substantially revised down GDP expectations for 2012 to about zero and beyond that to 2%, down from 2.7% in May, but there were no hints of any rate cut to the 0.5% base rate. German Industrial production fell 0.9%. Later this morning we have Trade no’s from both the UK and US followed by the Weekly Jobless Report at 1.30pm.
Sept S&P 500
The S&P fell nicely to my 1389/1393 buy level with a 1390 low before it rallied back to the 1400 level. I was able to take 6 handle profit and I am back flat again. I will leave the same parameters as yesterday where I will look to go long from 1389/1393 with 1386 stop and I will look to go short from 1403/1406 with a 1408 stop. Again, as I said yesterday, as long as we stay over 1390 the market is short term bullish and a close over 1410 would be very bullish.
EURO/USD
The Euro dropped down to my buy level with a 1.2330 low. I went long at 1.2335 and took a 30 point profit – I am back flat again. Today I will be a small buyer from 1.2320/1.2340 with a 1.2310 stop. I do not want to be short at this time.
Sept BUND
The Bund worked really well as I was able to take profit at 142.85 on my 142.25 long and I am flat again. Today I will look to go long on any dip back to the 142.20/142.40 with a 142.10 stop. If I am taken long I will look to take profit again from 142.80/143.00. If we break and close over 143.00 the market will be back to short term bullish.
Sept FTSE
I was stopped out of my 5800 short at 5825 and I am now flat. The FTSE is very over bought and I will look to go short again from 5850/580 with a 5890 stop.
Silver
Silver is back above the important 28.00 level again. I will look to go long in small from 27.70/28.00 with a 27.30 stop. As I am leaving a wider stop I will trade in smaller size. If I am taken long and then the market breaks 28.40 I will raise my stop to 28.20
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