Markets predictably went out quietly on Friday given the US Independence Day Holiday and in the wake of Thursday’s US Payrolls-inspired fireworks. European Markets closed mostly lower whilst Euro-Zone Bond Yields also closed lower with France and Germany both 2.4 basis points down for the 10 Year Yields. In Currencies the biggest mover was the US Dollar which has continued to strengthen on speculation that the Fed will tighten sooner than expected especially after the much stronger than expected Payroll numbers with the Euro now comfortably trading below 1.36.
The IMM data for the week ended July 1, was released despite the US Holiday with the biggest movements were the trimming of net speculative JPY shorts at -58.7K from -71.2K the previous week and an extension of GBP and AUD longs.
The economic front today is a very light one for market data which is normal after the heavy load of data released last week. Earlier this morning the German Industrial Production was released and for the third consecutive month came in weaker than expected, with a fall of -1.8%, showing further evidence that the German Economy is taking a breather. The only other data of note today on either side of the Atlantic is Canadian Building Permits at 1.30 pm.
September S&P 500
No change as I am still short from late Thursday at 1978 with the same 1985 stop. As I mentioned on Friday the S&P is overbought on a Daily, Weekly and now Monthly basis and is trading at the top of the Bollinger Band and Williams Index and is due at least to have a breather if not a decent correction. Today I will also be a small buyer on any dip to 1960/1964 with a 1957 stop.
Euro/USD
As I mentioned above, the Euro is now trading well below the now key 1.3600/1.3620 resistance level. I am still flat and the plan today is to lower my sell level to 1.3610/1.3630 with a 1.3655 stop. I still do not want to be long the Euro at this time.
US Dollar Index
I am still flat the Dollar Index and today I will raise my buy level to 80.10/80.30 with the same 79.70 stop. The Dollar really needs to break and close over 81.30/81.50 to confirm that we have a break-out to the upside.
September DAX
Today I will lower my buy level slightly to 9950/9980 with a 9930 stop as I still look for the Dax to finally trade up to my 10200/10300 target level where I will still look to be a small seller with a 10450 stop.
September FTSE
No change as I am still long from last week at 6750 with the same 6780 stop. I am still looking for the FTSE catch-up with the other major Indices as I look for the market to finally test 7000 over the coming weeks.
Dow Rolling Contract
No change as I am still a small seller from 17060/17090 with a 17125 stop. Given how over extended the Dow is trading I do not want to be long the market at this time.
September BUND
No change as I am still a small seller from 146.90/147.10 with the same 147.30 stop which is just above recent highs.
Gold Rolling Contract
Having covered half of my long 1312 position at 1322 on Friday I was stopped out of the other half overnight at 1315 and I am now flat. Today I will look to re-buy my Gold position on any dip to 1300/1306 with a 1295 stop.
Silver Rolling Contract
Just like Gold, I was stopped out of my long 20.80 position at 21.00 overnight and I am now flat. I still like Silver and as I mentioned last Friday I am still looking for it to trade back to 25.00 over the coming months. Today I will again be a buyer on any further dip to 20.50/20.80 with a 20.35 stop.
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