The more bullish outlook for the US Economy is powering US Equity markets to multi year highs. US yields for its Bond Market are also spiking higher with Treasuries up 24 basis points in the last two days to its highest level since last October. Rather than there being a broader market risk rally, the reduced need for QE and USD gains are depressing gold and other commodities. Today we have PPI out of the US and the very important weekly jobless numbers at 12.30pm.
S&P 500
The S&P had a very quiet trading range yesterday after the huge move up over the last week. Amazingly, despite this huge rally, the McClellan Oscillator is still negative at a reading of -37 which is the first warning sign for a top in the market over the coming week. We are trading at the top of the Bollinger Band and I still believe we will test 1400 where I want to sell against 1407. I will also buy on any move back to 1375 the first time down.
Euro
I am still long the Euro from yesterday with a closing stop below 1.30 looking for a test of 1.31 and possibly 1.3170.
Dax
No change from yesterday except I have moved my sell level to 7130/7150 with a 7170 stop.
Gold
Gold has had a big move down over the last week. We are oversold here and I have gone long against yesterday’s low of 1635 with a small position looking for a test back to the breakdown of 1670/1680.
USD/JPY
The JPY continues to weaken and I have raised my stop to a breakeven of 83.30 looking for 84.80/85.20.
Crude
Crude has been very kind to me over the last week and I am flat as I await the next breakout and I don’t want to push my luck here
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