The markets were very nervous ahead of the Summit especially when they saw that the splits are becoming more apparent as Hollande aligned himself with Spain. However they turned upwards in late trading when Merkel suggested that a Euro-wide Guarantee is to be announced.The S&P rallied 20 full points into the close. However Equity markets are slightly lower this morning on the back of weaker PMI from China, which came in at 48.7 versus 49.1 in April. Today we have GDP from the UK and Germany and at 1.30pm we have the Weekly Jobless No’s from the US. Yesterday’s release of the BOE Minutes showed an 8-1 vote for ‘No QE’ despite biggest drop in Retail Sales in two years – this BOE position may change at the next meeting. In other news, the Bundesbank said that a Greek exit would be significant but manageable with the help of cautious crisis management.
NOTE: All comments below refer to the June Futures Contract in each instrument
S&P 500
The S&P followed my road map perfectly yesterday as we dropped into my buy zone and I bought at 1302 and then rallied in the last hour of trading to 1317. I took profit and I am now flat. I always respect a late rally in the market and today I want to buy from 1303/1308 with a 1299 stop.
Gold
Gold also dropped into my buy zone and I went long at 1540. I like Gold and I am going to raise my stop to yesterdays low at 1533 as I look for a retest of 1585/1595 where I will look to take profit.
IBEX
I bought the IBEX yesterday at 6430 and I have just been stopped out at 6400. I will look to reset my long position from 6300/6330 with a 6280 stop.
FTSE
I bought the FTSE yesterday at 5290 only to be stopped out at 5270 and then the market traded up to 5320. Today I will look to buy from 5220/5250 with a 5210 stop which is below last Fridays low a break of which will be very bearish.
EURO/USD
The Euro continues to fall despite the rallies in Equities and Gold. I was stopped out of my small long position at 1.2595 and I am now flat. Everybody that I read and speak to is short the Euro which makes me very nervous. Today I will look to buy from 1.2500/1.2540 with a tight 1.2490 stop. I am only trading a small position because the coming squeeze will be vicious.
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