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Currencies, Bonds, and Equities have not shown any dramatic moves since I posted yesterday morning as markets are practically ‘on hold’ ahead of next week’s FOMC Meeting when hopefully the Fed will give some clarity going forward. The ‘stand out’ mover over the past 24 hours is Gold which is down over US$5$ to US$1313 or 4% after the market breached the key US$1350 support level. Whether this reflects a genuine fear of the Fed announcing an initial tapering of its QE bond programme next week or just stop loss selling on the break of this key 1350 support level is unclear.
US Equities ended the day with small losses for the indices of between 0.16% (Dow) and 0.34% (S&P), the relative strength of the Dow coming after Disney announced plans for a share buy-back of US$6-8 billion .Excitement generated by the sharp drop in US Initial Jobless Claims by 31k to 292k, which is the lowest level since March 2006, was quelled when it was revealed that computer upgrades in two States meant that their data was not recorded this week which biased the Claims number downwards.
This morning on the economic front the UK releases its Construction Output at 9.30am whilst the Euro-Zone has its latest Trade Balance. Later at 1.30 pm from the US we have PPI Retail Sales and Business Inventories followed at 2.55 pm by the University of Michigan Consumer Confidence Index.
September S&P 500
This is the last week for trading the September contract which expires next Friday and yesterday was probably one of the quietest trading sessions of the year so far as the market awaits next week’s Fed tapering announcement. None of my parameters got hit yesterday and I am still flat. At least today we have some key US Economic data out later which should lead to some market volatility. As I mentioned yesterday we still have an outstanding Gap from last Tuesday from 1670/1675 and today I will lower my buy level to 1671/1675 with the same 1669 stop. I will leave my sell level the same at 1692/1697 with a 1704 stop.
Euro/USD
The Euro worked well yesterday as shortly after I posted the Euro was trading at my 1.3280 buy level and after a nice rally I was able to cover this position at 1.3320 and I am now flat. Given how much Gold and Silver fell yesterday I am surprised how well the Euro was able to hold in and today I am a small buyer on any dip to 1.3230/1.3260 with a 1.3215 stop. I still do not want to be short the Euro at this time.
September DAX
No change as I am still a buyer on any dip to 8410/8440 with a 8380 stop and I will also look to sell any rally to 8560/8590 with a 8710 stop.
September FTSE
The FTSE plan worked well yesterday as shortly after I posted the market dropped down to my 6560 buy level and after a nice rally I was able to cover this position at 6600 and I am now flat. Today I will lower my buy level to 6520/6540with a 6490 stop. I still do not want to be short the FTSE at this time.
December 10 Year Treasury Bond
The Bond dropped down to my 123.10 buy level overnight and I am still long with the same 122.70 stop which is just below this week’s low. If I am stopped out of this position and the Bond continues to fall I will be a more aggressive buyer on any dip to 122.00/122.30 with a 121.90 stop.
December Bund
The Bund worked well yesterday as the market traded up to my 137.75 sell level and after a nice sell off this morning I have been able to cover this position at 137.30 and I am now flat. Today I will leave my buy level the same at 136.90/137.10 with a 136.80 stop. I will also be a seller on any rally to 137.75/138.00 with a 138.20 stop.
Gold Rolling Contract
My fears that Gold would not hold the 1350 support level yesterday were realised as I was very quickly stopped out of my 1365 long position at 1349 and I am now flat. Gold has been kind to me over the last two months until yesterday and again it shows how important it is to have stops in the market as Gold traded down to a low of 1308 overnight. Gold is now oversold and today I will be a small buyer from 1298/1306 with a 1289 stop I will also be a seller on any rally to 1338/1345 with a 1352 stop.
Silver Rolling Contract
After I posted yesterday Silver traded down to my buy level at 22.40 but literally five minutes later it hit my stop level at 22.10 and I am now flat. Today I will be a small buyer on any dip to 21.50/2170 with a tight 21.30 stop. Given how oversold Silver is trading I do not want to be short at this time.
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