The Dow Industrials closed at another 5 year high despite US GDP for Q4 coming in weaker than expected, rising by just 0.1%, held back by companies running down inventories, whilst Final Sales told a more encouraging story. The Weekly Jobless No’s came in better than expected at 344k, a pointer to a further lift in employment growth even though the big NE and Mid-Feb snow storm might scupper next week’s February Payrolls growth to some effect. The US Dollar continue to strengthen across the board despite stronger Equity markets whilst the Euro was not helped after Populist Italian Party leader, Beppe Grillo, ruled out voting for any Government led by traditional parties. Mr Grillo said he had no intention whatsoever of forming a Coalition with Mr Bersani who is the leader of the Democratic party. Grillo openly vilified Bersani quite publicly thus ending any chance that the two might coalesce.
This morning on the economic front we have some market sensitive indicators with possible revisions to already published Euro-PMIs, before attention focuses on the US with the January Personal Income and Spending Report, along with an updated Feb Consumer Sentiment reading before the Feb ISM Manufacturing reading.
March S&P 500
The S&P had a nice rally before giving up the ghost in the last hour of trading. The market dropped down to my 1516 buy level with a 1514 low before having a nice rally to 1524. I took profit at 1522 on my 1516 long and I am now flat. I still like the S&P after the reversal higher on Wednesday and today I am a buyer on any dip to 1507/1511 with a 1504 stop. I am still a seller on any rally to 1529/1533 with a 1535 stop. Remember a break and close over 1535 will be very bullish as the market will then look to challenge the 1560/1580 all time highs from 2007.
Euro/USD
The Euro traded down to my 1.3100 buy level and I took a small gain at 1.3130 and I am now flat. I do not like the way the Euro is trading as we keep making lower highs and lower lows. Today I am a seller on any rally back to the 1.3150 area with a 1.3180 stop and I will be a small buyer on any dip to 1.2990/1.3010 with a tight 1.2970 stop. A break and close below 1.3000 will be very bearish.
GBP/USD (Cable)
Cable worked well yesterday as shortly after I posted the market traded down to my buy zone with a 1.5148 low. I bought Cable at 1.5160 and I took a gain at 1.5200 and I am now flat. I still like Cable and as long as we can stay over 1.5120/1.5150 the market is okay. Today I am a buyer again on any dip to 1.5130/1.5150 and I will also be a seller on any rally to 1.5280/1.5310 with a 1.5350 stop.
March DAX
Unfortunately the Dax just missed my 7700 buy level before having a nice rally. This morning I will raise my buy level to 7715/7735 with a 7698 stop. I am still looking for the Dax to retest the 7860 highs made last Monday.
Gold Rolling Contract
I have been very unlucky with Gold as the market just missed my buy level last week before having a 60 Dollar rally. The next major support for Gold is the Dec 2011 low of 1527 and I will be a reasonably aggressive buyer on any dip to 1525/1535 with a 1518 stop. A break and close below 1527 will be very bearish.
March BUND
No change from yesterday as I will look to buy the market on any dip to 144.30/144.50 with a 144.18 stop.
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