Yesterday saw US stocks ending narrowly up after erasing the earlier losses in Europe which had been triggered by the poor results from Apple. The Euro ended well off its lows thus representing the triumph of Central Bank policy over incoming macro-economic reality. Thus after the Wall Street Journal article on Tuesday, suggesting the Fed was closer to agreeing an additional stimulus policy, a Bloomberg interview with ECB council member Nowotny suggesting there was a ‘pro’ argument for the ESM being granted a banking license has had quite a profound impact on Euro Peripheral bond market sentiment with Spanish yields dropping 23 basis points and Italy also 15 points lower.
Elsewhere, the news out of the UK was not good with GDP falling, a larger than expected, 0.7% whilst German IFO was also weaker than anticipated. US Home Sales fell 8.4% versus expectations of a 0.7% gain. Later today we have the Weekly Jobless and Durable Goods No’s from the US.
Sept S&P 500
The S&P again just missed my entry level, this time on the buy side and I am still flat. As I said yesterday I do not want to be short ahead of next weeks vital Fed meeting. It was impressive that the market ended slightly up, given how weak Apple was on top of the weak Home Sales No’s. The 1320 level is now the next key support as we held there again yesterday. Today I will look to go long from 1325/1329 with a stop at 1319 just below the key 1320! If I am taken long I will look to take profit at 1340 which so far has capped any upside move.
EURO
The Euro worked well and I was able to take profit on my 1.2060 long at 1.2125 and I am now flat. Today I will look to buy any dip from 1.2070/1.2100 with a stop below 1.2050 which has so far held the market. If I am taken long I will look to take profit from 1.2150/1.2180. A break and close over 1.2200 will be short term bullish and will put a short term floor in the Euro at 1.2050.
EURO/GBP
The EURO/GBP also worked great and I was able to take profit on my .7775 long at .7820 and I am now flat. I will still look to buy any dip from .7780/.7800 with a .7760 stop. I still believe that EURO/GBP is putting in a medium term bottom down here.
EURO/YEN
This is the first time I have mentioned this currency pair. I want to go long from .9460/.9490 in small with a stop at .9430 which is just below yesterdays low. If I am taken long I will look to take profit from .9550/.9580.
Silver
Silver is trying to put in a bottom and I want to go long from 26.80/27.20 with a stop at 26.60 as I am looking for a move back to the $30 USD level. Silver has been in a very narrow range for the last 2 months but I feel a break is imminent.
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