Markets ended the week on a very strong footing after the better than expected US Payrolls rose 163k versus the 100k anticipated. June Payrolls were revised lower to 64k versus 80k whilst May was revised higher from 77k to 87k. The July result ended three months of ‘sub 100k’ outcomes and was therefore warmly greeted by the markets. However the Unemployment Rate rose to 8.3% versus 8.2% and with the US Presidential election just three months away, the rise in unemployment will increase pressure on the Fed to maintain and increase monetary stimulus in support of it’s twin mandate. Also boosting markets were comments by Spanish PM Rajoy who suggested he is considering requesting support from the Eurozone’s bailout fund. This resulted in Spanish 10 Year Yields falling 31bps to 6.85%. Chinese services PMI came in weaker than expected, over the weekend, at 43 in July down from 45 in June. There is no economic news of importance today but Fed Chairman, Bernanke speaks in Washington tomorrow.

Sept S&P 500

What a wild week for the markets as the market reacted violently to every piece of news in the illiquid summer markets. It is far too dangerous to have a large position into the US Payroll Nos and we were correct in not choosing to short under any circumstances, given the stance of the world central banks. The S&P has now made and closed above recent highs of 1385 and I believe we will test the next important 1400/1410 level. Today I want to go long from 1384/1389 with a 1380 stop. If I am taken long I will look to take profit in front of 1400 the first time up. I will also look to go short from 1398/1402 with a 1405 stop as 1400 will be the top of the Bollinger Band and Williams Index.

EURO/USD

The Euro/Usd worked great on Friday as I was never stopped out of my 1.2195 long and I took profit at 1.2350 and I am now flat. As I have been saying for the last month I think the Euro has put in a medium term bottom at 1.2050. It is very hard to short the Euro as the ECB will do everything it can to protect the Euro. Having said the the Euro needs to break and close above 1.2450 for me to get more bullish. Today I will look to go long on any dip to 1.2310/1.2340 with a 1.2280 stop and I will also look to go short from 1.2420/1.2440 with a 1.2460 stop.

Sept FTSE

The FTSE has finally caught up with the rest of the European markets but is now overbought and outside its Bollinger Band and at the top of the Williams Index. Today I will look to go short from 5760/5790 with a 5810 stop.

Sept BUND

The Bund had another wild day on Friday and I was quickly stopped out of my 144.00 long at 143.80 and I am now flat. The Bund is now oversold and at the bottom of its Bollinger Band. I want to go long from 142.50/142.90 with a 142.30 stop. If I am taken long I will look to take profit in front of 143.50.

EURO/YEN

The Euro/Yen just missed my buy level on Friday. This currency pair has now broken some key levels. I want to go long from .9690/.9720 with a .9670 stop as I look for a retest of the 100 level over the next few weeks.