It sure feels like it. It’s still Greek news setting the pace for the market. After some enthusiasm (well hope anyway) that a deal was well on the way, the IMF has, according to press reports, thrown a spanner in the works demanding abolition of early retirement pensions (rather than increased contributions) and a tougher line on VAT rises. Greek PM Tsipras met with EC President Juncker, IMF’s Lagarde, ECB’s Draghi, and Euro-Group’s Dijsselbloem for an extended session but there’s still no word from Tsipras.
Creditors are still saying there’ll be no talk of debt relief/ restructuring until a reform package is agreed. Separately, the Euro-Group (Euro FinMins) met but without a result and are meeting again early this morning. Tsipras was also meeting again with JLDD as we write this so the market will be alert to wire news through our day today and with more meetings later this morning. Remaining sticking points apparently remain over the early retirement pensions, VAT changes, bailout extension time (3m/6m?). There’s the EU leaders’ Summit today and though Tusk said earlier in the week that this meeting would not be one for technical negotiations, it might well require heads of state intervention to seal a deal that would also have to be passed by the Greek Parliament with the June 30 IMF deadline looming.
There was a bid tone to Treasuries and German Bunds with, yields on both easing somewhat, though Euro Periphery Bonds also mostly rallied. Equities fell in Europe and in the US, European sentiment also not helped by a weaker than expected German IFO Business Survey after nine months of improvement. And it was as much in the “current assessment” as in “expectations”.
US Q1 GDP was revised from -0.7% to -0.2%, as expected. The US Dollar has been only marginally stronger overall, the AUD losing some ground yesterday to test below 0.77 for a time, trading just above the figure this morning. For what it’s worth, yesterday’s second tier China consumer sentiment was mildly positive and spot iron ore is up $1.19 overnight. Finally, and as a postscript to yesterday, the IMF released its Concluding Statement at the conclusion of its Article IV consultation with Australia, with uncontentious content and policy recommendations. The Fund recommended monetary policy should be ready to ease further if needed.
This morning on the economic front we have Consumer Confidence at the earlier time of 7.00 am. This is followed at 11.00 am by UK CBI Reported Sales. At 1.30 pm we have the US Weekly Jobless Claims along with Personal Income/Spending. This is followed at 2.45 pm by the Markit Survey for Composite and Services PMI. Finally at 4.00 pm we have the Kansas Fed Manufacturing Index.
June S&P 500
The S&P plan worked well yesterday as by the time the European Markets had opened the S&P was trading in the middle of my buy range at 2110 before having a nice rally shortly after the US Markets opened which enabled me to cover this position at 2117 and I am now flat. Subsequently the S&P had a nasty sell-off into the Chicago close as more Greek woes surfaced. I still firmly believe that we will get a Greek settlement as the ramifications of not getting one are so significant. For this reason I will again be a small buyer on any dip to 2093/2098 with a tight 2089 stop. I still do not want to be short the market at this time on what are not easy markets to trade. One interesting statistic that I read last night is that the S&P has gone its longest streak since 2007 where we have not had a move greater than 2% in one day.
EUR/USD
My Euro plan also worked well yesterday as shortly after the European Markets opened the Euro traded higher to my 1.1230 sell level before having a nice sell-off shortly after the US Markets opened which enabled me to cover this position at 1.1180 as outlined earlier to my Platinum Members and I am now flat. It is interesting that the Euro closed back above the key 1.1170/1.1200 support level and even when I was short yesterday I was not comfortable as I still believe the Euro trades higher before falling later in the year. Today I will be a small buyer on any dip to 1.1130/1.1160 with a 1.1090 stop.
September Dollar Index
On what was another quiet trading session for the Dollar yesterday I will leave my sell level the same at 95.90/96.30 with a 96.60 stop. I still do not want to be long the Dollar at this time.
September DAX
My concerns that the DAX would struggle to trade higher and that it was susceptible to a fall certainly paid off yesterday and thankfully I had no buy levels in the market. I still like the DAX as I certainly believe that Greece will get some sort of settlement with its creditors. Today I will be a small buyer on any dip lower to 11280/11330 with a wider 11210 stop. Given the volatility in this market I am trading in much smaller size with a wider stop. I do not want to be short the market today.
September FTSE
No change as I am still a small buyer on any further dip to 6705/6745 with the same 6675 stop. The volatility on the FTSE has just ceased over the last few weeks as the market does not know which way the next major move will be.
Dow Rolling Contract
The Dow plan did not work out yesterday as right from the start of trading in the US markets the Dow was trading heavy. Eventually the Dow traded lower to my 18060 buy level before stopping me out of this position near the close at 17990 and I am now flat. Today I will again try the buy side on any further drop to 17900/17960 with a 17850 stop. Despite the confirmed Hindenburg Omen from two weeks ago I do not want to be short the Dow at this time.
September BUND
The BUND opened firmer yesterday with the market eventually hitting my 151.40 sell level. I am not comfortable in been short this market and today I will lower my stop on this position to 151.70.
Gold Rolling Contract
Gold again sold off in a small way yesterday with the market testing support at 1160/1165 before having a small rally into the close and I am still flat. Today I will be a small buyer on any further sell-off to 1160/1166 with a tight 1154 stop.
Silver Rolling Contract
No change as I am still long at 15.90 with the same 15.50 stop. Again if I am stopped out of this position I will be a more aggressive buyer on any further dip to 14.80/15.25 with the same 14.40 stop which is just below the 14.49 spike low made earlier in the year.
Recent Comments