European Equities were softer yesterday as the theme of weak services PMI’s continues after the weak PMI from China earlier yesterday morning. However a better than expected US ADP Employment report turned markets around in the afternoon and Equity markets continue to push upwards ahead of today’s ECB meeting and press conference to follow from Dragi. The ADP Nos came in at 163K versus expectations of 140K arguing for a better Non-Farm Payroll number tomorrow. Also helping markets was the better than expected ISM Non-Manufacturing number which was expected to come in at 53.4 but instead rose 55.1, much stronger than the previous reading of 53.7.
Today is a very busy day for Economic releases as we have Bond Auctions from Spain and France scheduled this morning, followed by the meetings of the Bank of England and the ECB. This afternoon we have the Weekly Jobless No’s from the US and Factory Orders. Later this evening we have the release of the minutes from the 13th September QE3 Fed FOMC meeting which will be the key data today and will be a market mover.
Dec S&P 500
After the weak PMI No’s from Europe yesterday morning the the S&P just missed my target profit level of 1434 with a 1435 low before I was stopped out of my 1443 short at 1447 and I am now flat. The S&P has now closed up for three straight days and yet this is accompanied by a very weak NYSE Advance/Decline ratio. Today is going to be a very ‘news driven’ day as we have a lot of releases to be followed by the Feds FOMC Minutes explaining its QE3 surprise. The next big resistance is the 1457/1461 area where I will be a small seller with a 1463 stop. As we have now closed above the important 1443 support I will look to go long on any dip to the 1443/1446 level with a 1441 stop.
Euro/USD
I took profit on my 1.2940 short at 1.2880 and I am still flat. This morning I will look to reset my short position on any rally to the 1.2970/1.300 area with a 1.3020 stop. If I am taken short I will look to cover on any dip to 1.2900/1.2920. I will also look to set up longs from 1.2870/1.2890 with a stop below yesterdays low at 1.2860.
Dec DAX
The Dax hit my sell level late yesterday and I am short at 7350. Given the rally in the S&P I am surprised the Dax is not higher and I will leave my stop the same at 7380. I will also look to take profit on any dip to the 7295/7310 support. As I said yesterday, the Dax continues to trade heavy.
Dec BUND
I am still long the Bund from 141.15 and it just missed my take profit at 142.00 with a 141.90 high. This morning, given how strong the S&P is, I have taken profit here at 141.60 and I will look to reset my long position on any dip to the 141.00/141.20 area with a 140.95 stop.
Nov Crude
Crude has got hammered over the last few days and we are near oversold levels again. Today I will look to go long from 8740/8780 with a stop at 8680. This 8700/8750 is huge support going back to the lows made at the end of July. Given the need for the wider stop I am only trading in smaller size.
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