Financial markets continue to exhibit a negative tone but equities appear to be stabilising after nearly two weeks of losses. Yesterday the German market was soft, the Dax was down 0.4% with Germany seen as more vulnerable to global growth problems because of its export orientation. Weaker data out of America added fuel to the fire for this point of view however London and Paris were flat. US Stocks were weighed down by the softer data and ongoing concerns about Apple, which is due to report on Tuesday. Analysts are expecting an 18% decline in Apple’s net income which would be the first fall since 2003. US data, whilst not too different from market forecasts, was negative enough to add to concerns of yet another Spring/Summer dip in the worlds largest economy. Jobless Claims rose 350k from 344k last week. The Philly Fed Index for April came in at 1.3, well below the 3.0 expected. On commodity markets, Gold rose 0.5% yesterday and is up another 2% this morning in a further sign that the market is stabilising after the 20% fall. Currency markets were pretty quiet yesterday with the US Dollar generally a bit stronger against the G-10 currencies.
Today is very quiet on the economic front with no data of note from the US. This morning the Euro-Zone Current Account will be published and the ECB is set to announce its LTRO repayments data.
June S&P 500
The S&P worked well yesterday as both my sides of my levels were filled. After I posted yesterday the S&P traded at the 1151/1553 for most of the morning before having a nasty sell off after the US Economic data was released. I went short the market at 1551 and I was happy to take profit at 1544 before the market fell further. Not long before the close the market dropped down to my 1533 buy level with a 1531 low and I took a gain on this position overnight at 1541 and I am now flat. Today is Monthly Expiration for the Options contracts in the S&P and as a result the market can be volatile.
Therefore if it rallies to 1548/1553 I will be a small seller with a 1555 stop. I will also look to buy the market once more on any dip to the 1530/1534 level with a the same 1526 stop. Remember a break and close below 1530 will be very bearish and I will then expect the market to test the 1480/1490 February lows.
Euro/USD
The Euro also worked well as after the Equity markets started to fall the Euro traded down to my 1.3030 buy level before it had a nice rally. I took profit at 1.3070 and I am now flat. As I have been saying for the last two weeks as long as the Euro stays over the 1.2990 area the market is okay but a break and close below here will be bearish. Today I will still look to buy on any dip to 1.3010/1.3030 with the same 1.2985 stop. I still do not want to be short the Euro at this time.
June DAX
After I posted yesterday morning the Dax rallied to my 7550 target profit level on my 7510 long position from Wednesday but it fell just shy of my 7580 sell level with a 7566 high. It then followed the US market lower but just missed my 7440 buy level by 4 points and I am still flat.Today I will raise my buy level to 7430/7460 with a 7410 stop. I do not want to be short the Dax today given the Options Expiration in the US.
June FTSE
Very unlucky as the FTSE just missed my 6230 sell level before having a nice sell off and I am still flat. The FTSE continues to trade heavy and needs to get back above 6240 for me to get bullish. Today I will leave my sell level the same at 6230/6240 but with a tighter 6255 stop on any short position. If I am taken short and subsequently stopped out I will be a seller on any rally to 6280/6300 with a 6310 stop.
June BUND
No change as I am still short at 146.22. I will lower my stop to 146.40 and I will give this market one more day to sell off or else I will cover and stand aside.
Gold Rolling Contract
As expected, Gold has had a nice rally and is now back above the key 1400 level. I still like Gold and I am a buyer on any dip to 1400/1415 with a 1390 stop as I look for it to retest the important 1450/1470 resistance area.
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