Markets have lost further ground overnight underpinned by the disappointment of the US FOMC Minutes and the lack of policy action from yesterday’s Bank of Japan meeting. Even a much better than expected Weekly Jobless No from the US, of 350K, could not improve the mood. Moodys have downgraded Italy by 2 notches and she is now just 2 notches above junk status. The mood this morning has not been helped by weaker than expected Chinese GDP which came in at +7.6%, down from 8.1 % last month. This could lead to more rate cuts if inflation remains low.
In other news, Australian Employment fell 27K in June and the unemployment rate rose to 5.2% from 5.1% the previous month. Later today we have US PPI and Univ of Michigan Consumer Confidence Reports.
Sept S&P 500
The S&P managed to close the Gap at 1321 and I was able to go long at 1324. We had another nice rally late on and I was able to take profit at 1332 and I am now flat.Today I will look to buy one more time from 1320/1324 with a 1318 stop.If I am taken long I will look to take profit from 1330/1334 and if we do manage to rally I will look to go short from 1341/1345 with a 1348 stop.
Sept DAX
The Dax continues to be a buy on any dip and it continues to out perform the US Equity markets. It traded down to my buy zone and I went long at 6378 and I was able to take profit at the 6450 level this morning. I am now flat and I will look to go long on any dip from 6390/6410 with a stop at 6370 which is just below yesterdays low.
Silver
Silver worked great yesterday as we traded down to 26.44 and then we had a large rally back to 27.40 where we are now trading. I have taken nice profit and I am now flat. I will look to reset my long position on any dip back to the 26.50/26.80 level with a 26.40 stop which is just below yesterdays low. I do not want to be short Silver at the moment as the market continues to be a buy on dips.
Sept BUND
The Bund has traded into my sell level this morning and I have gone short in small size at 145.10 with a 145.40 stop. I will look to take profit in from 144.30/144.50 which is strong support.
Sept Euro
The Euro is trading at its next big support level of 121.60/121.90. A break lower here will lead to a test of the very important 120.50/120.80 level. If we break lower I will look to go long in this support area with a tight 120.30 stop. I will only look to go short on any move back to 123.00 with a 123.30 stop.
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