Opinion – Monday 13 August 2012

The lower than expected trade surplus for China together with a much faster slowdown in  exports than anticipated, led to lower Equity markets in Europe and initially in the US, on Friday. US equities managed a late recovery, buoyed somewhat by rumours of a hoped for Chinese economic stimulus. Today is a very quiet day on the economic front. Tomorrow we have a very important auction from Greece together with the release of the Euro-Zone GDP number. We also have retail sales from the US.

In other news, ECB member Coene said that restarting the SMP programme might be counterproductive and should only happen if strict conditions are applied. The German Bundesbank will start managing some of is foreign currency reserves in Asian Pacific financial markets as early as September.

Sept S&P 500

The S&P continues to  trade in the 1390/1403 for the last four trading days. The market dropped down to my 1392/1396 level with a 1392 low before a late rally took the market back to the 1401 level. I bought at 1394 and sold at 1399 and I am now flat again. Today I will look to go long from 1393/1397 with a 1391 stop. As I said on Friday I only want to go short from 1416/1420.

EURO/USD

The Euro is very quiet and I have no change from Friday’s update, that is I will look to go short from 1.2350/1.2380 with a 1.2410 stop. I do not want to be long here.

Silver

I am still long from Thursday at 27.90. I will leave my stop the same at 27.60 and if we break 28.40 I will raise my stop to 28.10. The narrow ranges that we have seen in all markets last week was one that I have not seen for a long time.

Sept FTSE

The FTSE worked well as I was able to take profit on my 5855 short at 5820 and I am now flat. I still believe the FTSE is trading heavy and I will look to go short again on any rally back to the 5850/5880 with a 5895 stop. If I go short I  will still look to target 5820 to take profit.

Sept BUND

No change from Friday as I look to go long from 142.20/142.50 with a 142.10 stop. If I am taken long I will look to take profit from 142.90/143.10