Equity markets continued to rise on Friday and the S&P closed higher for the seventh week in a row. On the Forex front, Friday’s market witnessed a smart reversal of recent Yen weakness on comments from Japanese Finance Minister, Aso, that the Yen had weakened more than expected. This looks like a sop to Japans G20 partners in front of the G20 meeting in Moscow next Friday but the comments do hint at a let up in the anti-yen rhetoric from here. The UK Pound continues to correct from its recent sharp sell-off in what has become a very crowded trade. Over the weekend Chinese Trade No’s were released showing that her trade surplus rose thanks to a kick up in export growth. This coming week may well prove to be one where recent FX moves are consolidated with EUR/USD and USD/JPY ranging beneath their recent highs and with an eye on Fridays G20 gathering though I doubt that so called currency wars will be given much credence or comment by G20 officials.
Today is very quiet on the economic front with no data due from the US. In Europe this morning, Germany and France are to sell Bills whilst in the UK we have the Lloyds Confidence Conditions.
March S&P 500
The market traded down to my 1506 buy level with a 1504 low. I went long at 1506 and I took a nice gain at 1513 which made up for my loss on Thursday and I am now flat. The S&P has now closed higher for seven weeks in a row. Friday was the slowest trading day of the year so far probably due to the snow storm in New York whilst the rise in Apple shares over the last few days has certainly helped stabilise the market. I still believe we will have one look at the 1525/1530 level before running into trouble. Today I am a seller on any rally to this 1525/1530 with a 1533 stop. I will also look to go long again on any sell-off to 1504/1509 with a 1502 stop. As long as we stay over 1490 the market is still bullish.
Euro/USD
The Euro worked really well as we dropped down to my 1.3360 buy level and I was able to take a nice gain at 1.3400 and I am now flat. This morning I will be a small buyer from 1.3340/1.3360 with a 1.3325 stop. I do not want to be short at this time.
March DAX
The Dax also worked really well on Friday as shortly before lunch we traded down to my 7580 buy level with a 7676 low and I was able to take a really nice gain on this position by taking profit at 7640 and I am now flat. Today the Williams Index is on a buy and I will look to reset my long position on any dip to 7600/7620 with a 7585 stop.
March BUND
The Bund traded up to my 143.10 sell level and I am still short. I do not want to risk too much on this trade and I will leave a 143.25 stop on this position. I will also look to take profit on any move back to 142.60.
March Nasdaq 100 Rolling Contract
I have not spoken about the Nasdaq for a while as I have been looking for the market to trade up to my 2800/2820 sell level first. The Nasdaq helped by Apple had a nice rally over the last week and we are very near my sell level and today I am a seller from 2800/2820 with a 2840 stop.
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