US Equity markets lost ground late in the session, after the release of the Fed’s Beige Book, erasing earlier gains after the better US GDP and Home Sales data. The Beige Book confirmed that activity continued to expand gradually in the past six weeks so the overall assessment was little changed from the modest to moderate growth seen in the July Beige Book. The positives were that housing and retail activity improved but manufacturing remains mixed and employment was holding steady or growing only slightly in most areas. All focus will now be on Bernankes speech tomorrow at Jackson Hole for further insight into the Feds assessment and any hints of further Q3. In Europe, ECB President Dragi hit back at criticism of his Bond buying plans saying the ECB will always act within limits of its mandate but that fulfilling our mandate sometimes requires us to go beyond standard monetary policy tools. This morning in an interview with a German newspaper, Dragi said it was in Germany’s interest to consent to extraordinary steps to preserve the currency shared by 17 nations. He used this interview to plead for more expansive role for the ECB and to say that the crisis struck Euro can be stabilized without sacrificing each country’s independence to a unified European political system. This morning we have Confidence No’s from the Euro-Zone and later in the US we have Personal Income and the Weekly Jobless Nos. 

Sept S&P 500

The S&P reached my sell level on the better US Economic Nos before selling off on the back of the Beige Book. I went short at 1412 and took a small gain at 1407 and I am now flat. Today I still want to go long ahead of tomorrow’s speech and I will continue to try and buy on any dip back to the 1399/1403 level with a 1396 stop. I do not want to be short.

Sept DAX

The DAX also worked well as we traded up to my 7030 sell level with a 7033 high and I went short and covered my position when we dipped back to the 6995 level. As the markets have been so quiet you have to take your small profits when available. Today in the Dax I will leave my sell area from 7020/7050 with a 7060 stop and I will also look to buy on any dip back to the 6910 area with a stop below last Fridays low at 6885.

EURO/USD

No change from yesterday as I still want to buy from 1.2480/1.2510 with a 1.2470 stop and I will also look to go short on any rally back to 1.2590/1.2620 with a 1.2640 stop.

USD/JPY

Again no change as I am long from 7850 and I will raise my stop to 7840. I still want to take profit at 7900. If I manage to take profit I will also look to reset my long position if we dip back to the 7850 area.

Oct Crude Oil

Crude finally traded down to my buy area with a 9475 low. I went long at 9490 and I will raise my stop to 9470 just below yesterdays low. I will look to take profit on any rally back to the 9580/9610 area.

Sept FTSE

The FTSE is oversold and at the bottom of its Bollinger Band and Williams Index. Today I will look to go long from 5705/5720 with a 5690 stop.