US Equity markets gained 0.3% on Friday with the cash S&P closing on another new high at 1680. The Euro traded briefly below 1.3000 on rumours of a ratings downgrade for France which proved to be correct. However the move was by Fitch following on from what Moody’s and S&P had done sometime back, in stripping France of the AAA rating. For the third day in a row the Euro was bid going into the New York close. Portuguese political angst is rising, with Lisbon postponing talks with her international lenders on the release of the next tranche of its €7.8 billion bailout package.
US data (PPI and Consumer Sentiment) were not material market factors nor were any of the Fed speakers where Plosser, a hawk, argued the case for rapid ending of QE by year-end whilst FOMC dissenter Bullard re-iterated that the Fed needed to be focused on downside Inflation risks.
Overnight Chinese GDP for the second quarter came in as expected at 7.5% although there whispers on Friday that this would be weaker than expected and is helping European markets on the open this morning. We have no economic data from Europe this morning but at 1.30 pm we have US Retail Sales (expected to rise 0.7%), Empire Manufacturing and Business Inventories.
September S&P 500
The S&P had one of its quietest sessions of the year so far with the market trading in a 7 handle range as it tries to absorb the extreme volatility over the last six weeks, yet it still managed to close on a another new high. It is very overbought but as we have seen in the first five months of the year this condition can continue with an upward bias.
The market just missed my 1665 buy level on Friday and today I will raise my buy level to 1664/1668 with a 1659 stop. If I am taken long and subsequently stopped out I will be a more aggressive buyer in front of 1650 with a 1646 stop. My only interest in selling the S&P is on a rally to 1690/1695 with a 1702 stop.
Euro/USD
The Euro worked well on Friday as it traded down to my 1.3040 buy level with a 1.2998 low before having a nice rally and I was able to cover this position at 1.3070 and I am now flat. For the third day in a row the Euro traded higher into the close of the New York session and I would respect this price action. The 200 Day Moving Average comes in at 1.3070/1.3080 and a break and close over 1.3100 will be short term bullish. Today I will be a buyer again on any dip to 1.3020/1.3050 with the same 1.2995 stop. I will also be a small buyer on a break of 1.3110 with a 1.3070 stop. I do not want to be short at this time.
September DAX
No change from Friday as I am still a small seller on any rally to 8270/8290 with a 8310 stop. I will raise my buy level to 8100/8130 with a 8075 stop.
September FTSE
As Friday was one of the quietest trading days of the year my FTSE levels did not get hit either and today I will be a small seller on any rally to 6560/6580 with a 6610 stop. I still do not want to long the FTSE given how extended the market is.
Gold Rolling Contract
Gold has traded up to my 1293 sell level overnight and I will leave my stop the same at 1305. Gold should have difficulty breaking this 1300 level as there are a lot of stale longs here.
Silver Rolling Contract
No change as I am still long from 19.15 and 19.80 and I will leave my stop the same at 19.50. I will cut half my position on any rally to 20.30 and a break and close over 20.70 will be short term bullish.
September BUND
I have not traded the Bund over the last week but today I will be a small buyer on any dip to 143.30/143.50 with a tight 143.15 stop.
Recent Comments