Markets have been quite orderly over the past 24 hours. In currency markets, the US Dollar has eased back somewhat, with the US Dollar Index closing down 0.25% after last Friday’s Payroll-inspired rebound. Greek headlines continue to garner some media coverage – though not dislodging market stability – with Greek PM Tsipras still playing hard ball in its international financial dealings leading to a 1.7% fall in the German DAX which closed at just above key support at 10660. The weak DAX led to the Dow and S&P 500 both closing down 0.5% for the second consecutive trading session.
G20 Finance Ministers and Central Bank Governors are meeting for two days in Istanbul. According to Bloomberg their draft communique points to the need to continue with accommodative Monetary Policy to support growth, which is no surprise.
The price of Oil closed higher, aided by OPEC raising its estimate of World demand for 2015, with OPEC also forecasting an increase in the demand for Oil from its members. The result of this saw Oil close higher for the fourth consecutive day.
Yesterday was very light on the data front. The EC Sentiment Investor Confidence Index rose to a stronger than expected 12.4 providing some support for the Euro, as did a better than expected German Trade and Current Account Report for December. The Fed’s Composite Labour Market Conditions Index for January also continued to rise. Overnight China released its latest CPI which rose at its slowest pace in five years, thus showing more evidence that deflation is now evident in almost every World Economy.
This morning on the economic front we have UK Industrial Production at 9.30 am. We have no data of note due from the Euro-Zone while at 2.00 pm the US will release its latest NFIB Small Business Optimism. Finally at 3.00 pm we have US Wholesale Inventories and the very important JOLTs Job Openings which is a key indicator that Fed Chair Yellen plays very close attention to.
March S&P 500
After the fireworks of the previous two weeks, yesterday was a very quiet trading session for the S&P as the market awaits further developments in Ukraine and Greece. However the S&P plan did work out well as just before the close the S&P traded lower to my 2036 buy level before having a late rally which enabled me to cover this position at 2043 and I am now flat. Today I will leave my sell level the same at 2057/2064 with a 2069 stop which is just above last Friday’s high. I will still be a buyer into the rest of the ‘Open Gap’ from last Wednesday from 2029/2035 with a 2025 stop. Again if I am stopped out of any long position I will use my 5 Handle Rule to go long again with a stop below whatever new low is put in.
EUR/USD
I was extremely unlucky with my long 1.1330 position which I put on at the open on Sunday Evening as I was stopped out of this trade at the low of the day at 1.1280 which occurred shortly after I posted and I am now flat. Sentiment continues to post extreme negative reading against the Euro and for this reason I will continue to use dips to buy the Euro with a tight stop. Today I will again be a small buyer on any dip to 1.1270/1.1310 with a 1.1245 stop.
US Dollar Index
No change as I am still short from last week at 94.70 with the same 95.10 stop. The Dollar really needs to break and close below the now key support at 93.70/94.00 for the market to turn more bearish. Today I will be a small buyer in this area with a 93.45 stop.
March DAX
After I posted yesterday morning the DAX started to rally but unfortunately just missed my 10730 sell level before falling over 100 points and I am still flat. The DAX closed just above its key 10660 support level and I will really need to see the DAX close below this level for at least two days before I will move my sell level lower. As mentioned yesterday, my only interest in buying the DAX is still on a dip to 10280/10330 with a 10230 stop. Today I will also be a small seller on any further rally back to 10730/10780 with the same 10810 stop.
March FTSE
The Ftse plan worked out well yesterday as shortly after I posted the Ftse traded higher to my 6790 sell level. After a nice move lower this morning, I have covered this position at 6750 and I am now flat. Today I will again look to go short on any rally higher to 6780/6810 with a 6830 stop. I still do not want to be long the Ftse at this time.
Dow Rolling Contract
I am still flat the Dow with little or no interest in buying this market especially with the fact that we have seven Hindenburg Omen signals already confirmed in 2015. Today I will lower my sell level slightly to 17790/17840 with a wider 17910 stop.
March BUND
The Bund plan worked out very well yesterday as shortly after I posted the Bund traded higher to my 159.00 sell level. The Bund is opening lower this morning and given the fact that the Equity markets are opening lower I have covered this position at 158.60 and I am now flat. Today I will again be a small seller on any rally higher to 158.95/159.25 with the same 159.55 stop which has capped all rallies so far in 2015.
Gold Rolling Contract
No change as I am still a small buyer on any dip to 1228/1234 with the same wider 1217 stop.
Silver Rolling Contract
The Silver plan worked out well yesterday as Silver had a nice rally after I posted which enabled me to cover my long 16.60 position at 17.05 and I am now flat. Today I will again look to buy Silver on any further dip to 16.40/16.70 with a 15.90 stop.
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