European markets were higher on the back of news that the stress test on the Spanish banking system was, at €59 billion, well within the €100 billion estimate agreed as part of the bailout. This news was more than enough to outweigh the weakening economic data from Asia where Chinese Factory Index came in at 49.8 for September, the first time it fell below 50 for two straight months since 2009. In Europe, according to a median of Bloomberg economic forecasts, the EU Jobless rate rose to 11.4% in August. In the US, consumers remains cautious as personal spending increasing by 0.1% in August and pointing to another quarter of soft spending.The Chicago PMI came in below 50 for the first time since 2009.
Later this morning we have UK PMI followed in the US by the ISM which will be closely watched after the weak Chicago PMI last Friday.
Dec S&P 500
The S&P dropped into my buy zone on Friday with a 1429 low. I am long from 1432 and I will raise my stop to 1430. As it is the beginning of the month we should see some money come into the market and a break over 1442 will be short term bullish as I will then look for a retest of the 1457 recent high. I do not want to be short at this time.
Euro/USD
The Euro worked very well last Friday as I was able to take profit on my 1.2930 short at 1.2880. Unfortunately I then went long at 1.2880 only to be stopped out at 1.2850. I still like the Euro and I believe we will have one more test of the important 1.3250/1.3400 area before it starts to fall again. I have gone long again the Euro this morning at 1.2860 and I will leave a 1.2820 stop on this position. I will look to take profit on any rally back the 1.2950 area.
Dec FTSE
I was stopped out of my 5740 long at 5760 for a stop profit after the weak economic news last Friday and I am now flat. I still like the FTSE and I will look to reset my long position on any dip to 5725/5745 with a stop on any long position at 5710.
Silver
Silver is struggling to sell off and I have cover my short 34.70 position at 34.50 this morning. I have no view here and I will stand aside.
Dec BUND
The Bund reached my sell level last Friday and I went short at 141.65. I will lower my stop to 141.75 and I will look to take profit on any dip to the 141.10/141.20 area.
Dec DAX
The Dax finally reached my 7220/7250 buy zone on Friday and I went long at 7230. I like the Dax and I will raise my stop to a stop profit at 7250 as I look for a retest of the important 7320/7350 area where I will look to take profit on my long position.
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