Friday was a case of another day, another set of disappointing US economic release. The latest was a trifecta encompassing industrial production (-0.3% vs. 0.0% expected, Michigan consumer sentiment (81.5 down from 88.8) and the Empire Manufacturing survey (+3.09 up from 1.19 but below the 5.0 consensus). The positive, if there was one, was the recorded rise in inflation expectations.The data kept the US dollar soft, DXY was -0.34% to 93.14 thanks largely to the 0.36% rise in EUR/USD to 1.1451, its best level early February and despite a renewed public commitment by ECB president Draghi – speaking at the IMF – on Friday – to complete the EUR1.1tn QE programme, but while also warnings central banks against ‘blind risk taking’.
AUD and NZD were exceptions to the softer dollar rule, AUD -0.58% to 0.8034 and NZD -0.31% to 0.7474. USD/JPY actually rose fractionally (+0.06%) on a Bloomberg story saying that the Bank of Japan is said to view a cut in the Reserve Rate (i.e. the interest on excess reserves or IOER) as a potential future option, something BoJ governor Kuroda appeared to rule it out in comments earlier in the week.
In Bonds, we witnessed a bull flattening of the curve, with 2s off just 0.8bps to 0.5365% and 10s -8.8bps to 2.1424%. US equities weren’t as enamoured of the data as they were the previous Friday’s payrolls report, the S&P500 nevertheless closed +0.08% at 2122.73 (so +0.3% on the week)
This morning we again have no economic data of note due from the Euro-Zone or the UK while later the only data of note due from the US is the NAHB Housing Market Index. Earlier this morning the Fed’s Evans is speaking in Stockholm on the US Economy and Monetary Policy. His speech will be very interesting as earlier last month when he spoke on London he was extremely dovish.
Please note that due to numerous requests from some of my Members I have started a new service for Platinum Members. The main difference in this service and my Premium Service is that I am telling everybody in Platinum where I am exiting all positions. A lot of my Members are more comfortable under this new scenario and the cost for anybody interested in this new service is an extra $140 per month. Please email me if you are interested in this new service and I will then email you a copy of the latest update.
June S&P 500
The S&P plan worked well on Friday as shortly after I posted the S&P traded lower to my 2113 buy level before having a nice rally again into the close which enabled me to cover this position at 2119 and I am now flat. The S&P managed to close yet again at another Contract high. Today I will again be a small buyer on any dip lower to 2107/2112 with a 2103 stop. Given how overbought the S&P is currently I will also be a small seller on any further rally to 2129/2134 with a 2138 stop.
EUR/USD
My long 1.1375 Euro position from last Thursday also worked well on Friday as the market had a nice rally into the close which enabled me to cover this long position at 1.1430 and I am now flat. The Euro closed very positively on Friday especially with the Weekly close over 1.1400 as it violates the six month downtrend and opens up the possibility of a move higher to at least 1.18. Today I will again be a small buyer on any dip lower to 1.1380/1.1410 with a 1.1355 stop. My Only interest in selling the Euro is still on a rally to 1.1520/1.1550 with a 1.1580 stop.
June Dollar Index
The Dollar plan also worked well on Friday as shortly before lunch the Dollar spiked higher to my 94.00 sell level before having a nice sell-off which enabled me to cover this position at 93.40 and I am now flat. Today I will again be a small seller on any rally higher to 93.80/94.20 with a 94.50 stop. I will leave my buy level unchanged at 92.30/92.60 with the same 91.95 stop.
June DAX
The DAX plan did not work out so well on Friday as the rally higher in the Euro led to a very quick spike lower in the DAX. Initially I went long the DAX at 11500 only to be very quickly stopped out of this trade at 11445 and I am now flat. The movements now in the DAX are nearly all governed by what happens in the Euro Currency as it is no coincidence that since the Euro has rallied by over 9% since last month that the DAX has lost the same amount. Today my only interest in buying the DAX is on a dip to 11230/11300 with a wider 11150 stop which is just below the key 11170/11220 support level. My only interest in selling the market is still on a rally to 11690/11750 with an 11810 stop.
June FTSE
Shortly after I posted the FTSE traded lower to my 6930 buy level. I am still long and today I will raise my stop to 6895 on this position. If I am stopped out of this trade I will be a more aggressive buyer in front of 6860 with a 6825 stop.
Dow Rolling Contract
No change as I am still flat the Dow. Today my only interest in selling the Dow is on a rally to 18370/18420 with the same 18460 stop.
June BUND
Finally very late in the afternoon the BUND eventually traded higher to my 153.80 sell level. I am still short and today I will lower my stop to 154.15 on this position. If I am stopped out of this trade I will be a more aggressive seller in front of 154.40 with a 154.80 stop. My only interest in buying the BUND is still on a dip to 151.95/152.40 with the same 151.70 stop.
Gold Rolling Contract
My Gold plan worked well on Friday as shortly after I posted Gold traded lower to my 1212 buy level before having a nice rally which enabled me to cover this position at 1223 and I am no flat. Gold has key resistance from 1220/1230 and to me it is only a matter of time before this key level is taken out. Today I will again be a small buyer on any dip lower to 1210/1218 with a tight 1203 stop.
Silver Rolling Contract
No change as I am still long at 17.10 with the same 16.80 stop. Remember a break and close over the next key resistance from 18.00/18.50 will be very constructive and will be the first time that the whole downtrend from May 2011 at 50.00 will have been broken.
Recent Comments