Yesterday was a very light trading session as far as economic data went with some reports on the state of the Euro-Zone economies mostly soft. The French INSEE Business Survey showed own-company production taking a hit in August, dropping to -7 from 0, coming also with declines in Production Expectations and Confidence. Italian Consumer Confidence declined in August by 2.4% and has now been on a downward trajectory since April’s highs and back down to around long term average levels.
In the currency markets, the US Dollar lost a little of its zip over the last 24 hours with the Dollar Index down 0.23%. The Australian Dollar has been the stand out performer of the G10 Currencies.
On the geo-political front, wire services reported continued fighting between the Government and the rebels in the Ukraine. A Russian spokesman said that aid would be delivered by agreement with the Red Cross whilst German Foreign Minister Steinmeier said that the Ukrainian crisis was the worst in Eastern Europe since the Cold War.
This morning on the economic front we have German Unemployment at 8.55 am. This is followed Euro-Zone Consumer Confidence and Business Climate Indicator at 10.00 am. At 11.00 am we have the important release of German CPI which will be closely watch by the ECB ahead of next week’s key meeting. This is followed at 1.30 pm by US GDP and the Weekly Jobless Claims. Finally at 3 pm we have Pending Home Sales.
September S&P 500
For the second consecutive day the S&P traded in a very narrow range. As I mentioned over the last few days many traders are on their last week of their summer holidays and it will take until next Tuesday for some sort of normality to return. I am still short in small size at 1996 with the same 2003 stop. Again if I am stopped out of this position I will be a more aggressive seller in front of 2008 with a 2013 stop. Today I am going to raise my buy level to 1983/1988 with a 1979 stop.
Euro/USD
No change as I am still long at 1.3190 with the same 1.3160 stop as the market tries to rally from oversold as the Euro is still trading at the bottom of its Bollinger Band and Williams Index. The German CPI data at 11.00 am this morning will be key for the next move in the Euro.
US Dollar Index
The Dollar tried to rally early but was met by large selling. Today I will lower my sell level to 82.65/82.95 with a 83.15 stop
September DAX
The Dax also traded in a very narrow range yesterday but did have a late sell-off into the New York close. As I am currently short both the S&P and the Dow I decided to cover my short 9570 position at 9550 and I am now flat. Today I will still be a buyer on any dip to 9430/9470 with the same 9415 stop. I will also be a seller on any rally to 9600/9630 with a 9655 stop.
September FTSE
It looks like every FTSE trader is on holiday this week as the volume and movement have been the lowest all year making it difficult to make points. I will leave my parameters the same as yesterday in that I will be a buyer on any dip to 6740/6770 with a 6715 stop. I still do not want to be short the FTSE at this time especially as we are approaching month end tomorrow.
Dow Rolling Contract
Also no change as I am still short in small size from 17105 with the same 17165 stop. Again if I am stopped out of this position I will be a more aggressive seller in front of 17210 with a 17240 stop. Given how overbought the Dow is currently trading I do not want to be long the market at this time.
September BUND
The Bund started to rally after I posted yesterday morning. It finally traded up to my 151.35 sell level and I am still short with the same 151.70 stop. I must say I cannot believe where Bund Yields are trading as they saying we are heading into another serious recession in Europe. I will also be a small buyer on any dip to 150.30/150.70 with a 150.15 stop.
Gold Rolling Contract
No change as I am still a small buyer on any dip to 1272/1278 with the same 1265 stop.
Silver Rolling Contract.
By the time I posted yesterday morning Silver was trading at my 19.40 buy level. I am still long and I will leave my stop the same at 18.95.
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