The initial part of the European session yesterday was rather dour with markets drifting in and out of positive territory, not making any notable headway. That mood changed with the release of a way better than expected report on US Housing Starts for December and a large unexpected fall in US first time Jobless Claims in the second week of January both lifting investor spirits. As for the specifics of the data, US Housing Starts were expected to rise materially but not by 12.1% to 954K way above 890K expected, to put starts at the end of last year back to August 2008 levels. The Weekly Jobless Claims fell 37K to 335K, levels not seen since January 2008 when the US Unemployment rate was on its way up but still in the 5/6% region. This latest reading may overstate the strength but it is a sign the US Economy is on its way back. Risk assets rose, Europe closed higher, whilst US markets were lifted by the likes of Homebuilder stocks which rose by 2.25% in a broader market which was up 0.75%.
This morning we have Retail Sales from the UK and later in the US we have the University of Michigan Survey.
March S&P 500
Almost as expected I was stopped out of my small 1464 short position at 1473 and I am now flat. The next resistance area is 1490/1495 and I will be a more aggressive seller in this area with a 1502 stop. If the market dips today I will be a small buyer from 1470/1474 with a 1467 stop.
March BUND
Unfortunately I was stopped out of my 142.80 long position at 142.60 and I am now flat. I still believe as long as the Bund stays over 142.00/142.40 area the market is trying to put in a base. Today I will look to buy the market on any dip to 142.25/142.50 with a 141.95 stop. I do not want to be short at this time.
March DAX
I sold the Dax yesterday at 7745 and even though it continues to trade heavy I have covered this position this morning at 7740 and I am now flat. The reason I have covered is the next major resistance is not until 7820/7850 area and I am only interested in shorting the market in this area. If the market rallies and enters my sell zone I will leave a 7870 stop on any short position.
March FTSE
Just like the Dax I have decided to scratch my FTSE trade and I am going to stand aside and observe for today. At this level I have no feel unless we break 6130 in which case I would buy the market with a 25 point stop.
GBP/USD
This currency pair traded down to my 1.5940 buy level. I have bought in small size and I will leave my stop at 1.5895. The Cable as this currency pair is known as is at the bottom of the Bollinger Band and Williams Index. If the Cable rallies from here I will look to take profit in front of 1.6030. If I manage to take profit I will look to reset my long position on any subsequent move back to 1.5930 with a 1.5880 stop.
Euro/USD
The Euro worked well yesterday but you had to be quick to take advantage. I sold the Euro at 1.3375 and I took a nice gain at 1.3335 and I am now flat. This morning I am only interested in selling the Euro if we traded up to 1.3420/1.3450 with a 1.3465 stop. I do not want to be long at this time.
Feb Crude
The oil market has been on a tear over the last few weeks. Crude is very overbought due to the political uncertainties in the Middle East. Today if Crude rallies further I will be a small seller from 96.00/96.30 with a 97.05 stop.
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