The US Equity markets took their lead from Japan and Europe with the Dow and S&P both managing to hit and close on new highs – the S&P is now up 20% year to date! The mantra ‘don’t fight the Fed’ could not be more apt in these markets. The US data released yesterday was growth supportive, suggesting that the economy is working nicely through its fiscal restraint mid-year. The ISM Manufacturing reading for July printed a higher than expected 55.4, including a nice uptick in the employment component from 48.7 to 54.4 which is the highest for some months. The Weekly Jobless Claims fell sharply by 16k to 326k showing the trend is downwards and pointing to continued labour market improvement.
There was no change in Monetary Policy at the Bank of England who left their asset purchase programme unchanged and in Europe, the ECB followed a similar line.
This morning on the economic front we have EuroZone PPI and then later at 1.30 pm all eyes will be on the Non Farm Payrolls where the market is expecting a rise of 185k together with an Unemployment rate falling to 7.5%. We also have Factory Orders and then later this afternoon the Fed’s Bullard is due to speak in Boston.
September S&P 500
The S&P traded up to my 1690 sell level after I posted and I was quickly stopped out of this position at 1695. It then eventually traded up to my second sell level at 1702 however the fact we have the key Non Farm Payroll data due today at 1.30pm I have covered my 1702 short position at the same price and I am now flat. I am going to stay flat until we get the announcement. Also yesterday we have left a large Gap from Wednesday’s close and if this is not filled by Monday we could have a similar breakaway Gap that occurred last month at the 1648.50 level which still exists. Today if we get a strong number I will be a seller on any rally to 1716/1721 with a 1726 stop. If we get a weaker number I will be a buyer on any dip to 1684/1689 with a 1681 stop.
Euro/USD
The Euro fell hard today as the US Dollar was boosted by stronger economic data thus putting Fed tapering back on the agenda again. The Euro dropped down to my 1.3240 buy level and I am still long. I only bought in small and I will leave my stop the same at 1.3185. If the Euro rallies ahead of 1.30pm I will cut my position. As I mentioned yesterday a break and close below 1.3200 will be bearish.
September FTSE
The FTSE just missed my 6550 buy level before having a 100 point rally and thankfully I did not plan to go short the market as I am always suspicious in going short Equity markets at the end/start of a month and the FTSE is no exception to this rule. Today the FTSE is overbought and I will be a small seller on any rally to 6710/6740 with a 6755 stop. I will also be a buyer on any dip to 6610/6640 with a 6595 stop.
September DAX
The DAX plan worked yesterday as having previously mentioned that a break of the key 8330 resistance level would be bullish, I bought the market at 8345 and took profit at 8420 and I am now flat. The next key resistance level surround the 8510/8540 area and I will,be a small seller here with a 8555 stop. I will also be a small buyer on any dip to 8360/8390 with a 8325 stop.
September BUND
The Bund just missed my sell level before falling hard after the good US data. The Bund traded down to my 142.40 buy level and I am still long. I will leave my stop the same at 142.15. A break and close below 142.00 will be bearish.
Gold Rolling Contract
Gold traded heavily all day and ultimately traded down to my 1314 buy level. Gold keeps bouncing off the now very important 1305 support zone. I am still long and I will lower my stop to 1303. A break and close below 1300 will be bearish.
Silver Rolling Contract
No change as I am still long at 19.50 with the same 19.40 stop.
Recent Comments