European equity markets and the Euro were both stronger yesterday despite the weaker PMI from China that came out last Saturday. The strength derived from the belief that China will do something to boost growth. This is also in addition to more stimulus expected from the Fed and the belief that the ECB will cut rates at their meeting on Thursday. The markets were extremely quiet because of the US Labor Day holiday. Today sees the release of the US ISM. Contrary to recent PMI’s in the US, this is expected to move higher. Whilst most of the focus is on the Payroll Data on Friday, the ISM is more forward looking and a stronger outcome may cloud the Fed’s waters a little. Whilst the FOMC is expected to ease rates, it is unclear as to how they will do it. German Chancellor, Merkel’s comments were helpful to the Euro yesterday saying the EU needed to bond together and support Greece as long as they meet their commitments.
Sept S&P 500
No Change from yesterday, as I still like the market and I am going to raise my buy level to the 1402/1406 area with a 1399 stop on any long. I will still look to sell from 1420/1425 the first time up to this level and I will leave a stop at 1427 on any short position. As I keep saying, it is very hard to be short this market with it being affected by so much manipulation from the various Central Banks around the world.
EURO/USD
The Euro continues to trade higher as it climbs its own wall of worry. The Euro just missed my buy level with a 1.2570 low but I still like it overall and I will use any dip to get long. Today I will raise my buy area to the 1.2580/1.2610 with a stop just below yesterday’s low at 1.2570. I will still look to go the short the first time we test the 1.2690/1.2730 area with a 1.2750 stop. If we break and close over 1.2750 this will be a major break and should eventually lead to a test of 1.3000.
Sept FTSE
My long position worked really well yesterday as yet again the Bollinger Bands and Williams Index worked. I took profit on my 5695 long at 5752 and I am now flat. I will still look to buy any dips ahead of Friday and I will look to go long this morning from 5710/5730 with a 5705 stop. I do not want to be short at this time.
USD/JPY
The USD/JPY just missed my buy level with 7808 low. The Williams Index has turned up and I will raise my buy level to the 7800/7830 with a 7795 stop.
Sept BUND
The Bund looks to me like it put in a short term top at 144.25 and I will use any rallies to get short. Today I will look to sell from 143.50/143.80 with a 144.00 stop.
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