Seemingly positive news headlines out of Ukraine and Russia dominated Friday’s market moves. These included confirmation of Russian troop withdrawals from the Eastern Ukraine Border, a Russian offer to broker a ceasefire between Kiev and Pro-Russian separatists and calls by separatists for a humanitarian aid mission that the Kiev Government is reported to be considering. In the meantime Ukrainian forces are reportedly continuing to attack Pro-Russia separatist areas in Eastern Ukraine.
European stocks ended down on Friday but well off their intra-day lows whilst US Indices all ended with strong gains, with the S&P and the Dow closing over 1% higher. The US Dollar was slightly weaker across the board with Treasury Yields higher. In commodities, Gold fell whilst Oil rose.
Today we have no news of note on the economic front, from either side of the Atlantic, as the markets go on hold ahead of Germany’s ZEW Survey and the NFIB Business Optimism Report from the US tomorrow.
September S&P 500
What a trading session Friday turned out to be! The S&P made a low of 1891 before rallying over 40 handles to a 1933 high and thus register a ‘Key Day Reversal’ which is positive in the short term. This Key Day Reversal will still be valid until we break 1890.
The S&P plan worked well as I bought the market at 1894 and after a nice rally I covered this position at 1908 before the market took off to the upside. Thankfully we were not short as the Bollinger Band and Williams Index (which was telling me not to be short) finally kicked in. This morning the S&P has strong resistance at 1935/1945 and it will take a break and close over 1950 for me to turn bullish again. Today I will be a small seller from 1932/1939 with a 1947 stop. I will also be a buyer on any dip to 1917/1924 with a 1913 stop. I am only trading in small size given the volatility.
Euro/USD
The Euro plan worked well on Friday as shortly after I posted it traded up to my 1.3425 sell level. As the price action for the Euro has been positive over the last week and it is finding it very difficult to sell off from here, I have covered my short position at 1.3395 this morning and I am now flat. Today I will be a small buyer on any further dip to 1.3345/1.3375 with a 1.3325 stop. My only interest in selling the Euro today is on a rally to 1.3440/1.3470 with a 1.3495 stop.
US Dollar Index
No change as the Dollar continues to trade in a very narrow range. I am still a small buyer between 81.10/81.30 with the same 80.75 stop.
September DAX
As I mentioned on Friday the Dax had decent support from 8840/8910 which turned out to be correct but unfortunately it had made its low before I posted and I am still flat. The Bollinger Band and Williams Index were telling me not to be short the Dax and yet again this trading signal proved to be on the mark. Today the Dax still has decent resistance at 9175/9225 and I will be a small seller in this region with a 9245 stop. I will also look to buy the market on any dip to 9030/9070 with a 8995 stop.
September FTSE
The FTSE plan worked well as I bought the market at 6500 and after a nice rally I was able to cover this position at 6540 and I am now flat. It still has decent support from 6470/6500 and strong resistance from 6580/6610 and I am going to stand aside here to see which way the FTSE will break before making my next trade.
Dow Rolling Contract
The Dow also posted a strong ‘Key Day Reversal’ to the upside on Friday. It just missed my 16250 buy level before rallying nearly 300 points. Thankfully the Bollinger Band and Williams Index were telling me not to be short the market. The Dow has strong resistance from 16580/16620 and I will be a small seller in this region with a 16660 stop. My only interest in buying the Dow is on a dip to 16400/16450 with a tight 16370 stop.
September BUND
The Bund plan worked out well on Friday as it traded up to my 149.70 sell level and after a nice sell-off I was able to cover this position at 149.30 and I am now flat. Today I will again be a seller on any rally to 149.60/149.90 with a 150.10 stop I still do not want to be long the Bund at this time given how over extended the market is trading.
Gold Rolling Contract
After I posted on Friday Gold started to sell off as the Equity markets rallied and eventually traded down to my 1307 buy level. I am still long and I will leave my stop the same at 1299.
Silver Rolling Contract
No change as I am still long at 19.90 with the same 19.45 stop.
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