We start the week with the markets remarkably relaxed over Cyprus as the Troika and Cypriot Government met with EU Finance Ministers last night in Brussels to cut a deal. Cyprus dodged a disorderly default and exit from the Euro Currency by bowing to demands to shrink its banking system in exchange for a €10 billion bailout. Cypriot President, Nicos Anastasiades agreed to shut the country’s second largest bank under pressure from a German led bloc of creditors in a night time negotiating melodrama that threatened to rekindle the debt crisis and rattle markets. The EU president Ollie Rehn told reporters after that there was no optimal solutions, only hard choices. The Euro initially rallied 0.6% on the deal before settling back to where we closed on Friday night whilst stock are a little higher in Europe.
Not very much news on the Economic front today with Fed Chairman Bernanke and King from the BOE both due to speak in London whilst later in the US we have the Chicago National Activity Index and Dallas Fed Manufacturing activity.
June S&P 500
The S&P again closed up on Friday on weak volume as the markets looked like it might finally break the 1565 cash high from 2007 on the back of the Cypriot bailout. The market so far has still failed to have two reasonable down days in a row this year as every sell off is bought. Until we get two sell extremes in a row the market is going to continue higher. I am still looking for the S&P to top out in the 1570/1585 resistance area. Today I will look to buy the market on any dip to 1545/1550 with a 1539 stop. I do not want to sell the market unless we trade up to 1570/1575 where I will go short in small with a wider 1586 stop.
June DOW
Unfortunately I was stopped out of my 14370 long position at 14360 as I did not want to have a position ahead of the Cypriot bailout and I am now flat. Today I am a small seller on any rally to 14520/14560 with a 14605 stop. I will also look to buy the market on any dip to 14370/14400 with a 14350 stop.
June BUND
I am surprised how well the Bund has held in given how strong European Equities are this morning. The Bund traded down to my buy level and I have gone long at 144.15. I will leave a 143.80 stop on this position and I will look to take profit on any move back to 144.50/144.70.
June DAX
The Dax just missed my 7880 buy level before ralling hard this morning and I am still flat. This 8050/8080 is huge resistance for the Dax and I am a seller in this area with a 8100 stop. My only interest to buy the Dax is if the market sells off to the 7890/7920 support zone with a 7875 stop.
Silver Rolling Contract
No change as I am still long at 29.08 from Friday. I will leave my stop the same at 28.60 and I will give the market just one more day to rally or else I will cut my position.
Euro/USD
The Euro continues to trade well as the market leaves this very important 1.2875/1.2900 support zone behind. Today I will look to buy the Euro in small on any dip to 1.2940/1.2970 with a 1.2920 stop. I do not want to be short at this time.
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