Equity and Commodity markets continue to drift higher as Central Banks and the latest economic data threw up no surprises. At the press conference, after the ECB meeting. Dragi said “we are ready and have a fully effective backdrop in place”, referring to the new Outright Monetary Transactions Program and he all but told Spain they should apply! Minutes from the Feds 13th September FOMC Meeting contained the key takeaway that the FOMC tended towards stimulation policy settings, even as the economy recovers, in order to support stronger economic recovery. The BOE left rates unchanged but their latest QE program runs out before their next meeting and there is some disagreement whether more is needed, with some members concerned about inflation. Oil also jumped in reaction to Syria-Turkey border tensions.
Today we have Factory Orders from Germany ahead of the key Non Farm Payrolls in the US, which are to be released at 1.30pm, where markets are looking for a modest increase of 115K and a small rise in the unemployment rate to 8.2% from 8.1% last month. Later the Fed’s Bullard is speaking on the US Economy in Memphis.
Dec S&P 500
After I posted yesterday morning, the S&P just missed my 1446 buy level before trading up to my sell level at 1457. I went short and took a small profit at 1452 ahead of the FOMC minutes and I am still flat. Today is a very dangerous day to have a position before the release of Non Farm Payrolls and I am going to wait to see the number before getting into the market again. If the No’s are good I will be a seller from 1465/1470 with a stop above 1472 and if the No’s are weaker than expected I will be a buyer at 1443/1446 with a 1440 stop.
Dec BUND
The Bund has worked really well for me over the last few weeks and yesterday was really kind as, after I posted, the Bund traded down to my buy level at 141.20. It then rallied to 141.78 and I was able to take profit at 141.65. This morning I still like the Bund and I have gone long in small ahead of Non Farm Payrolls at 141.38 and I will leave my stop at just below yesterdays low at 141.10. I do not want to be short the Bund at this time as I look for the Bund to eventually break the important 142.00/142.20 resistance level.
Dec DAX
The Dax continues to trade heavy and I was able to take profit on my 7350 short from yesterday morning at 7305 as we traded down to a low of 7285. I am still flat and I want to stay flat ahead of Non Farm Payrolls. If we get a weak No from the US today I will look to sell any rally in the Dax as this market continues to trade heavy. Otherwise I will continue to stay flat and reassess on Monday.
Euro/USD
My good run in the Euro came to an end yesterday as I was stopped out of my 1.2980 short at 1.3020 and I am now flat. I want to stay flat ahead of Non Farm Payrolls as I have no view here. I am only interested in buying the Euro if we drop back to the 1.2900/1.2920 area with a 1.2880 stop on any long position.
Dec FTSE
The FTSE continues to trade quietly higher and I still like the FTSE overall. If we get a weak Non-Farm Payroll I will look to go long on any dip to the 5770/5785 area with a 5750 stop otherwise I will leave the market alone.
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