The Equity markets all registered small gains yesterday with the mild risk-positive tone continuing whilst benchmark bond yields are moderately lower thus helping Equities. The Euro ended the day weaker on the back of more poor German data, this time Industrial Production which recovered a mere 0.2% after the 2% drop in October. This November data has heightened speculation that the ECB may cut rates when it meets later this morning. I don’t think they will but the press conference with President Dragi at 1.30pm should be interesting and hopefully increase volatility in what has been a very lacklustre week. Indeed the VIX closed on a 6 year low yesterday. The evident weakness in the Euro-Zone core is something that may keep any near term recovery in all things Euro contained.
The Bank Of England also meet today and whilst a no change is the widely expected outcome, GBP weakness yesterday owes something to chatter that the BOE
might spring a surprise and announce a £25 billion extension to its QE Programme. After the Central Bank decisions this morning we have the Weekly Jobless Nos from the US at 1.30 pm followed by Wholesale Inventories and hopefully a pick up in volatility.
March S&P 500
The consolidation of last weeks gains continues as the market just limps along with the VIX now a 6 year low. My own view is we are going to take out the September high before we go lower. The market just missed my 1450 buy level yesterday and today I am a buyer from 1450/1454 with a stop at 1445 which is just below the low made earlier in the week. The only difference is that I do now want to go short today as I look for the market to trade higher first.
Silver Rolling Contract
Silver traded down to my 30.10 buy level with a 30.05 low and I took a nice gain at 30.40 and I am now flat. When the markets are as quiet as they are you have to be able to react and take smaller profits. Today I will leave my buy level the same from 29.90/30.10 with a 29.75 stop.
Eur/USD
No change as the Euro is trading in such a quiet range and hopefully with today’s ECB meeting we will get an increase in volatility. Today I am a buyer on any dip to 1.2990/1.3020 with a 1.2980 stop. I do not want to be short today as await the press conference from Dragi at 1.30 pm.
March BUND
The Bund just missed my buy level yesterday and I am still flat. As I said yesterday I still like the Bund and I will raise my buy level to 143.10/143.30 with a 142.90 stop.
March FTSE
The FTSE continues to play catch up with Europe as the FTSE/Dax spread continues to narrow. The FTSE closed at its highest level since 2008 and has now broken out technically. Today I will raise my buy level to 6030/6050 with a 6010 stop. I do not want to be short at this time.
USD/JPY
Unfortunately the USD/JPY never sold off before reaching my 88.00 level yesterday as Japan continues to print money. Today I am a buyer in small on any dip to 87.30/87.60 with a tight 87.10 stop.
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