Market sentiment ended the day better after the stronger than expected trade data out of China, with good signs for the future in the detail, which helped boost Commodity prices. In particular, stronger exports to Europe and America were taken to be a tailwind for the Chinese economy. Moreover there were some encouraging signs that the slowing in Industrial Production might be stabilising as iron-ore imports rose by 26.45% year on year.
Meanwhile, in the US, positive labour market data released yesterday suggested that the recovery there is ongoing. The Weekly Jobless Claims rose to 333K from an upwardly revised 328K, close to the median forecast of 335K. This saw the four week moving average slip to 335K, the lowest since December 2007 which was at the beginning of the Global Financial Crisis.
This morning on the economic front we have French Industrial Production, along with UK Construction Spending and Trade Balance. This is followed later in the US, at 1.30 pm, by Wholesale Inventories.
September S&P 500
The S&P plan worked well today as the market was bid all morning until New York opened and then we had a nasty sell off before buyers returned to bring the marker back to where we started, with the market ending the day unchanged. After I posted yesterday morning the S&P traded up to my 1694 sell level with a 1696.5 high before selling off to a low of 1684.5. I covered my short position at 1686 and I am now flat. I am worried about this market going forward as I feel that one of these days it is going to break hard to the downside as the key earnings indicators do not justify trading near 1700.
For today I will be a seller from 1698/1702 with a 1705 stop. I will also be a buyer on any dip to 1683/1686 with a 1679 stop.
Euro/USD
I am still short the Euro in small size at 1.3340 and I will leave my stop the same at 1.3420. The Euro is trading at the top of the Bollinger Band but not quite at the top of the Williams Index. If I am stopped out I will be a more aggressive seller in front of 1.3450 with a 1.3475 stop.
September FTSE
The FTSE plan also worked well today as shortly after I posted the market traded up to my 6510 sell level and, following the sell off in the S&P, I was able to cover this position at 6480 and I am now flat. Today I will be a seller from 6525/6550 with a 6565 stop. I still do not to be long the FTSE at this time.
September DAX
Yesterday, the DAX plan also benefited from the S&P sell-off by initially moving up to my 8330 sell level before dropping and I was able to cover my position at 8290 and I am now flat. Today I will be a seller from 8355/8380 with a 8395 stop. Given the Key Day Reversal last Monday I still do not want to be long the market at this time.
September BUND
The Bund also worked today as the market traded up to my 142.55 sell level before also having a sell off and I was able to cover this position at 142.20 and I am now flat. I am beginning to think more and more that the Bund is going to break hard to the downside but the big question is when will this happen. Today I will be a small seller from 142.30/142.60 with a 142.70 stop. I will also be a seller on any break of 141.70 with a 142.05 stop.
Gold Rolling Contract
Unfortunately the Gold plan didn’t quite work out because it just missed my buy level before having a nice rally and is now back above the key 1300 support point. Today I will raise my buy level to 1298/1305 with a 1293 stop. I still do not want to be short Gold at this time.
Silver Rolling Contract
Finally we got the big rally in Silver that I have been looking for. I have taken profit at 20.30 on my 19.72 long position and I am now flat. The reason I have taken profit is because I want to see how the market trades at the 20.50/20.70 resistance zone. Today I will be a small buyer on any break of 20.80 with a 20.45 stop. I will also be a buyer on any dip to 19.70/20.00 with a 19.45 stop.
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