Stock markets were little changed yesterday buffeted by pluses and minuses on both sides of the Atlantic. In England, the BOE minutes indicated that they had considered more QE but were unanimously in favour of no change and unemployment had unexpectedly fallen. Greece asking for an extension of its austerity program also weighed on market sentiment. In the US, the data was mixed with better NAHB Housing and Industrial Production no’s but a significantly weaker New York Empire Manufacturing Index. US stocks ended flat again on very weak volume. The US Housing Index rose to 37, way better than expected, and this is the one source of economic encouragement going forward. Later this morning, we have CPI from the Euro-zone with the market looking for a 1.7% increase. In the US we have a busy day with the Weekly Jobless no’s, the Philly Fed and Housing Starts due. Hopefully these data releases will generate some market movement.
Sept S&P 500
We have never seen the VIX, the Stock Volatility Index, having a reading of less than 15 over a period of more than a week and then for it not to be followed by a 5/7% decline in the market over subsequent weeks. The volume is also dismal and this is therefore a treacherous market to trade at the moment. The 1400/1425 is very strong resistance and we need a closing break over the area for the market to get stronger. Today was another non event and I did not do one trade. If we rally to 1407/1411 I will look to go short in this area with a 1413 stop. If I am taken short and subsequently stopped out I will look to reset my short over 1420 with a 1427 stop. For the moment I do not want to be long the S&P.
Sept FTSE
No change from yesterday I want to go short from 5860/5880 with a 5890 stop.
Sept BUND
I was stopped out of my small 142.30 long at 141.95 and I am now flat. The Bund is very oversold and near the bottom of its Bollinger Band. I will look to reset my long position from 140.70/141.00 with a 140.50 stop.
USD/JPY
As I have been saying for the last week the authorities have no choice but to try and weaken the Yen. I will move my buy order up to .7840/.7870 with a tight .7820 stop as I look for a test of 8000 over the next few weeks.
EURO/USD
No change in the Euro. I just do not have a strong feel for this currency pair at the moment as there is little or no movement going on. Hopefully after all the data releases today we will get a clearer picture as to which direction the Euro is going to follow. I have a strict rule, which has saved me a lot of money over the years, which is that ‘there is no point in trading for the sake of it’ so I will stand aside until the picture gets clearer.
Recent Comments