The ECB finally cut both its Refi and Deposit Rates by 25 basis points and China’s PBOC cut its lending rate by 31 basis points and its deposit rate by 25 basis points. This all followed the BOE’s decision to agree an additional £50billion GBP QE over the next four months. The Euro was the biggest loser from this action as it lost 1.75% against the US Dollar. The US Dollar was helped further by the better than expected Jobless No’s and stronger ADP Employment No’s which may point to a stronger Payroll No. from the US today, due for release at 1.30 pm. The Equity markets had priced in the rate cuts and subsequently sold off before rebounding ahead of today’s data.
Sept S&P 500
The McClellan Oscillator is a fantastic signal for picking tops and bottoms in the market, as everytime we get a reading of +300 we are overbought and a reading of -300 we are oversold. Last Tuesday we closed over 300 and the S&P traded up to my sell level after the rate cuts in China and ECB. I went short at 1374.5 and covered my position at 1364 and I am now flat. I do not want to have a position until after the No’s today. If we spike higher I will look to go short from 1375/1380 with a 1385 stop. As long as we stay over the 1345/1350 the market is bullish. I will also look to go long from 1348/1352 with a 1345 stop.
We still have a huge gap under the market at 1321 from last Thursday and a break of 1345 will probably lead to a test of this gap.
Sept BUND
The Bund worked really well as after I posted yesterday we traded down to a 142.13 low. I took profit on my 142.30 long at 143.10 and I am now flat. I am only interested in going short in front of 144.00 if we trade that high.
Sept FTSE
The spike higher in FTSE took me out of my short position at 5670 and I am now flat. I like the FTSE long term and I will use any retracement back to to the 5580/5610 area to go long. If I am taken long I will use a 5560 stop.
Sept EURO
As expected I was taken out of my small long position at 1.2490 and I am now flat. The Euro is now outside its Bollinger Band and at the bottom of the Williams Index. Last month’s low at 1.2290 will be strong support and I will look to go long again from 1.2320/1.2340 with a 1.2280 stop.
Silver
It is good we took profit yesterday in Silver at 28.20 as we are now trading at 27.60. Today I will look to go long from 26.90/27.20 with a 26.50 stop. Again I am only trading in small size given how volatile this contract is.
Recent Comments