Markets finally catch up to the news and begin to believe that Spain really is in trouble. Spain’s Yields rose sharply, Equity markets are lower, Oil is off dramatically and the USD is higher across the board. EM currencies are weakening and any reprieve is likely to be short lived until or unless Spain receives some real support. The news regarding the capitalisation needs of Spain’s banks and their unwillingness to go to the EFSF for help is finally been absorbed as real by the broader markets. The markets are hoping for the ECB to re-start buying Spain and Italian debt but the ECB has so far suggested this will not happen thus adding to the volatility. There is some talk of a rate cut next week and Ireland is expected to provide some positive news with a Yes vote today or the fiscal treaty referendum. Today we have PMI from the UK, Weekly Jobless No’s and Chicago PMI from the US ahead of tomorrow’s Non Farm Payrolls.
NOTE: All comments below refer to the June Futures Contract in each instrument except where specified.
S&P 500
The S&P was unable to stay above 1320 and, having closed on its highs on Tuesday, it managed to close on its lows yesterday. I have to respect the close below 1320 and today I will sell from 1317/1321 with a 1325 stop. I will also look to buy in front of 1300 with a 1295 stop. If we break and close below 1290 it will be very bearish as we still have an open gap from the beginning of the year from 1253/1260. A break of this 1290 level will probably lead to a sell off to this area and I will be an aggressive buyer if we trade this low.
Gold
Gold worked well as it traded to my buy area and bounced 30 dollars. I bought at 1535 and took profit last night at 1563 and I am now flat. I will leave my buy area the same at 1530/1540 with a 1525 stop. I do not want to be short Gold.
July Crude
Crude has fallen over 20 dollars in the last three weeks and we are very oversold as we are outside the Bollinger Band. I have bought Crude this morning at 8790 in small size with a 8690 stop as I look for a rebound back to 8950/9000 where I will look to take profit.
EURO
I am glad I stayed away from the Euro yesterday as we traded down to the 1.2350 support level. This morning the Williams ‘Percent R’ index has given me a small buy signal in the Euro and I have gone long at 1.2390 with a stop below yesterdays low at 1.2340. Again given the volatility I am only trading in small size. First resistence is at 1.2450 where I will look to take profit.
USD/JPY and FTSE
I was stopped out of both of these trades yesterday for a small loss in both and I am now flat. I have no view today and, like the Euro yesterday, I will watch to see how these markets trade for the next 24 hours.
Recent Comments