Markets surged yesterday after strong comments from ECB President Dragi speaking at a conference hosted by the UK Government to mark the start of the 2012 Olympics. Dragi said that the ECB is ready to do whatever it takes to preserve the Euro and believe me it will be enough. He has calmed markets regarding peripheral soverign debt yields saying they come with our mandate and we have to cope with the financial fragmentation and address these issues. It has raised expectations that the ECB will step in to lower bond yields, in particular for Spain and Italy. After a weak start to European markets, equities rose strongly after the comments from Dragi with the IBEX gaining 6.1% and Italian shares up 5.8%. The market was helped by a fall off in the Weekly Jobless Nos from the US by 35K to 353K and Durable Goods Orders rose by 1.4%. later today we have US GDP and University of Michigan Report.
Sept S&P 500
The S&P finally worked well yesterday after been unlucky with my fills during the week. Shortly after I posted, the S&P dropped into my buy level at 1329 with a 1327.75 low and I was able to take a nice profit at 1350 and I am now flat. For the last two days I have said not to be short this market as we were at the bottom of the Bollinger Band and Williams Index and with the FED meeting next week leading to increased speculation of more QE. It is so hard to fight the Central Banks as they will do whatever they can to stop this market from falling. I do not want to chase the market here and I will leave an order to go long from 1345/1349 with a 1343 stop which is just below the 1346 low made in US time yesterday. If we can close over 1350 for the week it will be very bullish as we will have left a break away Gap from the 1334 level from Wednesday.
EURO
Whereas I was lucky with my fill in the S&P the same could not be said for the Euro which just missed my 1.2100 buy level. As I have been saying for the last 2 weeks I believe the Euro is putting in a medium term bottom and this could have come on Tuesday at 1.2050 as we broke and closed above the very important 1.220 area. Like the S&P, I do not want to chase the market here and I will look to go long on any dip to 1.2220/1.2260 with a 1.2195 stop. I will only look to buy in small with a wider stop.
EURO/JPY
The EURO/JPY worked really well as I was able to go long at .9475 and I took a nice gain to early at .9580 and I am now flat. I do not want to chase the market here so I will look to go long from.9500/.9530 with a .9480 stop.
USD/JPY
This currency pair has been very tricky to trade but I believe risk on is back and I will look to go long from .7790/.7820 with a tight .7770 stop as I look for the market to trade back to the .7900/.8000 over the next few weeks.
Sept DAX
Again I was unlucky with my buy levels in the Dax but I feel it is very cheap and likely to get a good bid over the next month. As the Dax is a very volatile contract I am going to look to buy in small size from 6520/6560 with a wider 6480 stop. I think the Dax can trade back to 7000 over the coming weeks.
Recent Comments