Another wall of worry hits the markets, with Equities very soft although rebounding off their overnight lows. Commodities are starting to show divergences, with Gold being the safe haven. Expect markets to remain nervous as we head into the G8 summit later.The comparative stability of the Euro highlights the broader nature of this move. The market is now concerned not just about the very big issue of a Greece exit but also poor global growth, as witnessed by yesterdays poor numbers from the US and liquidity drying up as JP Morgan are out of the market. As these issues hit all at the same time, it can cause stresses in unexpected places thus leaving markets in risk aversion mode. In other news, Spain calls for calm as Bankia drops 30% and Moodys downgrading 16 Spanish Banks including Santander.
NOTE: All comments below refer to the June Futures Contract in each instrument
S&P 500
I was stopped out of my long position at 1315 and I am now flat.The McClellan Oscillator is extremely oversold at -310, with the Secondary Indicator at -38. We are also outside the Bollinger Bands and the Williams Indicator is also way oversold. The next support for the S&P is at 1290 and, given the above indicators, I am a buyer from 1295/1300 with a 1288 stop. Again I am only trading in small size given the volatility.
IBEX
Given the weakness of the other European and US Equity markets, Spain is holding up very well. I bought the market yesterday at 6400 and I have taken profit this morning at 6550 where we are trading now. I will look to buy again from 6400/6450 in small size with a 6350 stop.
EURO/USD
The Euro dropped down to my buy level at 1.2690 and I will leave my stop at 1.2650. I will take profit on any move back to 1.2750.
GOLD
Gold had a nice move off my buy level yesterday at 1545. I will raise my stop to 1570 in order to take some profit or, if the market trades up to 1590/1595 first, I will look to take profit here. If I am taken out of my position I will look to reset in front of 1550 with a 1530 stop.
FTSE, Bund & USD/JPY
I have been stopped out of the above positions for small losses and I am now flat. I do not want to take a position in these markets at the moment and I will take another look next week
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