After the increase in volatility through mid-week, markets closed little changed on Friday with major European markets lower by 0.25%-0.5%. In the US, the Dow closed fractionally higher with both the S&P and Nasdaq ending the day marginally lower. There was some intra-day selling on both sides of the Atlantic but better data helped calm investors nerves. Japan, after a wild day on Friday, continued this trend overnight with the Nikkei back down to just above 1400 as I write this commentary. The market was not helped by comments from Bank of Japan Governor Kuroda who said yesterday the Japan could cope with rates between 1% and 3% in a improving economy without causing instability.
In Europe, the German IFO improved more than expected in May suggesting that the economy will grow at a more measurable pace than the limp +0.1% Q1 performance. In the US, Durable Goods Orders also pointed to US Business Investment Spending building more momentum through mid-year. For the US Dollar and US Treasury Yields, Friday saw little net change.
Today is going to be very quiet for trading with London closed for the May Bank Holiday and the US closed for Memorial Day. The only data of note is German Retail Sales which are due at 10.00 am.
June S&P 500
The S&P was still not able to fall hard for two consecutive days and for the second day in a row it managed to close the Gap. My plan on Friday was not to have any position ahead of the Durable Goods data and I reckoned that as long as the S&P could stay over 1630, the market would remain bullish. It made a low of 1634 ahead of the New York opening and then proceeded to trade higher for the rest of the session. I bought the market at 1639 after Durable Goods data was released and I took a small profit at 1644 and I am now flat. As the US Equity markets are closed for the Memorial Day Holiday, we only have a limited futures session today and this will close at 4.30 pm. The S&P really needs to break 1660 for me to get bullish again and I will be a small seller on any rally to 1656/1660 with a 1662 stop otherwise, given the holiday, I am going to stay flat and have another look tomorrow.
Euro/USD
The Euro worked well on Friday as I bought at 1.2910 and I took a small gain at 1.2940 and I am now flat. I still like the Euro and my theme of not been short continues as I look for it to trade back above 1.30. Today I will be a small buyer on any dip to 1.2890/1.2920 with a 1.2875 stop.
June DAX
After I posted on Friday the Dax had traded through my buy and stop level and as a result I did not trade. As I post this morning the Dax is back above the key 8340 level and I am a small buyer from 8340/8360 with a tight 8325 stop which is just below the low made earlier. I do not want to be short the Dax at this time.
June FTSE
I was stopped out of my 6680 long position at 6665 and I am now flat. The market is closed today and I will have to wait until tomorrow to do my next trade.
June Bund
The Bund worked really well on Friday as twice after I posted we traded down to my 144.15 buy level. I took profit at 144.55 and I am now flat. I still like the Bund and today I will look to reset my long position on any dip to 144.00/144.25 with a 143.95 stop.
June Nasdaq 100
The Nasdaq dropped nicely on Friday and I took a gain at 2970 on my 3000 short position and I am now flat. Today I will look to reset my short position on any rally back to 3010/3020 with a 3055 stop.
Silver Rolling Contract
Finally, Silver is beginning to trade higher. I will raise my stop top to 22.30 on my 22.20 long position as I look for it to trade back over 23 where I aim to take profit.
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