The USD fell relative to most major currencies overnight, in thin trading, as the market goes on hold ahead of the Greek elections on Sunday. Retail Sales were weaker than expected and this did not help the USD. The Equity markets initially shrugged off the weak Retail Sales No’s but then sold off late in the day on the back of more downgrades for Spain with Moodys lowering their rating by three notches to BAA3. Spain now has the lowest investment grade on Moodys scale. Currency markets have been virtually unmoved in response. The Euro was also helped by better than expected Eurozone Industrial Production. Today we have Eurozone CPI. An auction from Italy and then at 1.30pm we have the Weekly Jobless No’s from the US.

Sept S&P 500

The S&P had a choppy session within a narrow range as we traded between 1308/1320, hitting both sizes  a couple of times. The market got hit in the last two hours as a result of the Moodys downgrade of Spain. I traded this range myself yesterday and I went long again last night at 1310. I will leave a 1304 stop and I will look to take profit on any move back to 1319. With expiration of all the June contracts tomorrow I do  not want to be short the market.

EURO

The Euro is trading very well despite all the downgrades of Spain. It is actually higher than yesterday morning even with Spanish Bond Yields at 6.8%. As I have said for the last week, given the huge short positions in the market, I will not be short. I have bought the Euro this morning at 1.2560 and I will leave a 1.2520 stop as I still believe we will trade back to 1.2650/1.2700.

July Crude

Crude worked really well as we traded down to my buy area and then rallied 180 points off the low. I took nice profit and I am now flat. Today I will look to go long from  8210/8260 with a 8180 stop.

Sept Bund

The Bund just missed my buy level and then rallied 90 points. Today I will raise my buy level to 141.30/141.70 with a 141.20 stop. If I am taken long I will look to take profit from 142.30/142.50. I will also sell on any rally back to the 143.00 area.

Cable (USD/GBP)

The Cable just missed my buy level yesterday and then rallied 100 pips. It looks very heavy this morning and I have no position.  I will stand aside and see how we trade over the next 24 hours.

DAX

A number of you have asked why I have not commented on the Dax for the last two weeks. Basically I haven’t had a great feel for this market as it has been very congested. My view at the moment is that it needs to clear the 6200/6230 area before I would consider going long. Then if we make this break and we trade back to the 6060/6090 I will go long, in small, with a tight 6040 stop.