The key news just after I posted yesterday morning was the release of the much worse than expected GDP data for the Euro, confirming the ongoing recession in the Euro-Zone. Not only did GDP for the area as a whole fall by 0.6% but German GDP fell by 0.6% and France by 0.3% both worse than forecast. This saw the Euro weaken against the US Dollar as European stocks slid. US Equities opened weaker but following better than expected Weekly Jobless Nos (which fell to 341K from 366K last week) helped the US to recover and close flat for the day. On the currency markets the Euro under-performed, tumbling a cent to 1.3315 in the wake of the poor GDP figures. The Yen strengthened against the US Dollar even as weak GDP No’s were revealed there, as a pledge from the G20 to refrain from competitive devaluation was taken as a not so subtle shot across Japans bows, taking USD/JPY from 93.60 to 92.40 this morning.
This morning is another busy one for economic data with UK Retail Sales due at 9.30. In the Euro-Zone we have Trade Balance data at 10.00 am. Later this afternoon we have US Empire Manufacturing, Industrial Production and Michigan Consumer Confidence.
March S&P 500
After another very quiet day and the S&P just missing my 1510 stop with a 1510.25 low. I was able to finally take profit on my 1514 long at 1520 just before the close and I am now flat again. There is an old saying of never shorting a quiet market in the S&P and this is certainly true this year. Yes the market is way over-bought but until we get a sell extreme the trend is still up. With volatility collapsing we have to look for smaller moves. This morning I have bought the S&P again here at 1515 and I will leave a 1509 stop on this position. I still want to go short on any spike to the 1527/1532 resistance area with a 1535 stop. Remember it will take a break and close below 1490 for me to turn bearish.
Euro/USD
I was very quickly stopped out of my 1.3380 long position at 1.3350 after the awful GDP No’s were released. The Euro subsequently traded down to 1.3310 overnight and I have bought the Euro again at 1.3315. I want to be long ahead of today’s G20 meeting, and as I only have a small position I will leave a 1.3270 stop and I will look to take profit on any move back to 1.3380. Despite yesterdays bad GDP Nos I do not want to be short the Euro.
March FTSE
I bought the FTSE yesterday at 6310 but I had my stop to tight at 6285 and I was quickly stopped out before the market moved a lot higher later. This morning I have bought the FTSE again at 6290 and I will leave a 6265 stop which is below yesterdays low.
March DAX
Yesterday showed how important it is to have stops in the market as I was very quickly stopped out of my 7710 long position at 7680 and I am now flat. The Dax then fell another 80 points. This morning I am only interested in buying the Dax on any move down to 7560/7580 in small size with a 7530 stop. This 7530/7550 is key as a break and close below here will be very bearish.
Gold Rolling Spot
Even though I am bearish of Gold on a longer time frame I think Gold is setting itself up for some sort of rally given how oversold the market is and is at the bottom of its Bollinger Band. This morning I am a small buyer of Gold between 1605/1615 with a 1590 stop.
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