The US Equity Markets ended the week on a positive note after a tentative agreement between Ukraine and Russia was reached last Thursday. Indeed the S&P 500 posted its best week since last July, rebounding from a Technology driven sell-off as corporate earnings ranging from major Wall Street banks to Yahoo surpassed estimates. The S&P rose four straight days, adding 2.7%, to close at 1864 during the holiday shortened trading week. The Dow climbed 382 points or 2.4% for its best week this year.
Investors are keeping an eye on developments in Eastern Ukraine where the Government unleashed an offensive to dislodge militants. Four-way talks on the crisis between US, European Union, Russian and Ukrainian diplomats ended on April 17 with an accord to end the conflict. This helped European markets on Thursday especially the German DAX which closed almost 2% higher. This morning Gold is lower on this news as investors revert to risk-on again.
With the UK and European markets closed for Easter Monday we have no economic news. The US is open but there are no economic releases scheduled as the market looks forward to former Fed Chairman Ben Bernanke speaking at the Economic Club tomorrow.
With the UK and European markets closed there will be no opinion today for the DAX, FTSE and the Bund. Normal service for these markets will return tomorrow.
June S&P 500
The S&P ended the week with a 0.2% gain as it rose for the fourth straight day. I was very unlucky with my trading plan on Thursday as the market just missed both my 1847 buy level and 1864 sell level with a 1863.75 high before it had a nice sell-off into the close and I am still flat. Today with London and the European markets closed it should be quiet trading session as most US traders will still be on their Easter break especially as we have no economic releases due until tomorrow. The S&P still has this ‘Open Gap’ from last week at 1838.50/1841 whilst the real level to watch going forward is at 1810 where the market has twice rebounded from this level, with the last one on late Tuesday been very impressive. Today I will be a small seller on any rally to 1866/1871 with a 1875 stop. I will also raise my buy level to 1847/1853 with a 1844 stop.
Euro/USD
After I posted on Thursday, the Euro started to sell-off and traded down to my 1.3805 buy level. I am still long and I will raise my stop on this position to 1.3780 which is just below last week’s low. I still do not want to be short the Euro until we see the ECB finally take some action to fight deflation and thus try to weaken the Euro.
US Dollar Index
My only interest in buying the Dollar Index is on a dip to 79.20/79.50 as I do not want to chase this market higher. If I am taken long I will still leave my stop the same at 78.75 which is just below last November’s low of 78.90.
DOW Rolling Contract
Despite the Dow having an impressive week the market still closed down on Thursday, in contrast to the NASDAQ and the S&P which both closed higher. I was very unlucky with my Dow short level at 16460 as the high reached was 16456 before the market had a nice sell-off into the close and I am still flat. Today I will still be a small seller on any rally to 16480/16520 with a 16550 stop. I will leave my buy level the same at 16300/16340 with a tight 16280 stop.
Gold Rolling Contract
Gold traded lower overnight and in the process traded down to my 1285 buy level. I am still long and I will leave my stop the same at 1276 as the market is trying to hold on to it’s 100 Day Moving Average.
Silver Rolling Contract
The sell-off in Silver is beginning to grab my attention and it will very interesting to see if the Daily Sentiment Index has fallen to single digits from last week’s 15% reading. Overnight Silver has so far just missed my 19.25 buy level and today I will leave my buy level from 18.95/19.25 with the same 18.70 stop on any long position.
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