Equity investors took some profit yesterday ahead of the big news events later in the week. After hitting four year highs last Friday, the S&P and the Dow dipped after weak Consumer Credit which was down $3.3bn, the first fall in 11 months.The Equities were led lower by Intel which fell 4% after a series of broker earnings downgrades, whilst the Vix rose from 14% to 16% which was testament to the renewed mood of caution. In Europe, Greek PM Samaras was sent back to the drawing board to find better quality budget cuts.
Markets are nervous ahead of Wednesday’s German Constitutional Court ruling on the legality of the European Bailout Fund and the Fed’s FOMC meeting on Thursday. We also have the Dutch elections on Wednesday. Later this morning we have the Trade Balances from both the UK and the US and we also have NFB Small Business Optimism from the US.
Sept S&P 500
As I said yesterday, as long as the market stays over the 1420/1425 level the S&P is short term bullish and the market, having hit a 1422 low overnight, is now back at the 1431 level. Today I still want to buy dips against this 1420 support and I will trade in smaller size with a larger stop. I will look to go long from 1423/1428 with a 1418 stop and I will still look to go short on any spike to the 1448/1453 with a 1456 stop.
EURO/USD
The Euro dropped into my buy zone and I went long at 1.2755. I will look to take profit in front of 1.2840 which is the next resistance level and I will raise my stop to 1.2770 on my long position.
Sept DAX
No change, as I am still short from 7230 and the market just fell short of my 7160 profit target level. I still think the Dax is trading heavy ahead of the German Court ruling tomorrow and I will lower my stop to breakeven. If I am stopped out I will look to resell on any spike to the 7270/7300 with a 7320 stop. Also if the market drops I am still a buyer from 7110/7130 with a 7095 stop.
Dec BUND
The Bund dropped down to my buy area and I went long at 140.38 and I took profit this morning at 140.90. As long as the Bund stays over 140.10 the market is bullish and I will look to reset my long from 140.20/140.40 with a 140.05 stop.
USD/JPY
No change as I am still long from 7840 with a 7810 stop.
Sept FTSE
I will look to go long the FTSE from 5740/5755 with a 5725 stop. If I am taken long I will look to take profit from 5790/5810.
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