Yesterday was generally a risk positive day however it was one in which stronger US equities and moderately lower bond yields have proved to be a negative for the US Dollar with the Dollar Index falling 0.5% to 81.80. An easing of geopolitical tension followed a proposal from Russia’s Foreign Minister, Lavrov, which suggested that Syria put its chemical weapons under international supervision pending their eventual destruction as a way of avoiding a US strike against it. The proposal has been publicly welcomed by the Syrian Government whilst US Secretary of State, John Kerry, is reported to have told Lavrov that his suggestion was ‘rhetorical rather than a concrete proposal’. Meanwhile Bloomberg news is reporting that less than 10% of the US House of Representatives publicly support President Obama’s plan for a military strike and we still lack formal confirmation of when a Senate vote will take place. The upshot is that Oil prices have given back Friday’s entire upward move with Brent down nearly 3%.
In other news, San Francisco Fed President Williams said in a Q&A session in New York that QE tapering could take 9-10 months and the Fed will do what is best for the economy.
Today is another very quiet one for economic news. This morning we have the UK House Price Balance followed later in the US by the NFIB Small Business Optimism Index.
September S&P 500
As expected, the S&P has traded up into the Gap left from August 14th but unfortunately the market just missed my 1654 buy level with a 1656 low. It then traded up to my 1671 sell level and to be honest I am not comfortable about being short as I still feel the market will squeeze higher into next week FOMC Meeting and I have covered this position this morning at the same price and I am now flat. Today I will be a small buyer from 1664/1668 with a 1661 stop whilst I plan to short on any rally to 1680/1684 with a 1686 stop. The 1680/1685 is key resistance and I would expect the market to have trouble getting through this level initially.
Euro/USD
Yet again the Bollinger Band and Williams Index did their work in indicating oversold conditions in the Euro as it had a nice 160 point rally off the lows made last Thurs/Friday. It is now back above the 1.3200/1.3230 support and I will be a small buyer on any dip to 1.3210/1.3240 with a 1.3195 stop. I still do not want to be short the Euro at this time.
September DAX
The Dax plan worked well yesterday as the market dropped down to my 8260 buy level before having a nice rally, which has continued this morning. I covered half my position last night at 8305 and the other half this morning at 8340 and I am now flat. I still like the Dax and I am impressed that we have now closed over the important 8260 level for the last three days and as long as we hold over this level going forward the market should trade back to the 8500 highs made in early June. This morning I will be a buyer on any dip to 8290/8310 with a 8255 stop. I do not want to be short at this time.
September FTSE
The FTSE is the one market that I am finding the hardest to trade at this time as the market has been stuck in a very narrow but choppy range over the last six weeks. I was stopped out of my 6552 long position yesterday morning shortly after I posted at 6515 and I am now flat. I am going to stand aside here and let the market find its own level over the next few days before committing to a new trade.
December 10 Year Treasury Bond
The Bond is back trading lower this morning on the back of the stronger equity markets. I will still be a small buyer on any dip to 122.50/122.80 with the same 121.95 stop. The Daily Sentiment Index for the US Bond market is currently at 7% Bond Bulls which should lead to a nice rally out of this key 122.00/123.00 support zone.
December BUND
No change as I am still long at 137.40 with the same 136.95 stop. If I am stopped out I will be a more aggressive buyer on any dip to 136.40/136.60 with a 136.20 stop.
Gold Rolling Contract
No change as I am still a buyer on any dip to 1360/1370 with a 1349 stop.
Silver Rolling Contract
The Silver plan worked well yesterday as, shortly after I posted, the market traded down to my 23.50 buy level and after a nice rally I was able to cover this position at 23.80 and I am now flat. Today I will lower my buy level to 22.70/23.00 with a 22.40 stop. Silver must stay over 22.50 as this is the key level going forward as a break and close below here will be bearish.
Recent Comments