US Stocks have posted a sixth successive daily rise in what was a thin day on the market news front. I forgot to mention yesterday that the US changed their clocks at the weekend and for the next couple of weeks the US market will open and close one hour earlier. The S&P still remains short of its 1565 all time high recorded in October 2007. Equity markets recovered their earlier sell off on the back of the disappointing China data released yesterday morning and which is serving to cast some doubts on whether growth there is quite strong enough to provide a decent tailwind for growth elsewhere in the world. US Bond Yields have edged up another 3 bps to close at 2.07% while Euro-Peripheral yields have edged higher, despite this the Euro is still holding above the very important 1.2950 level.
This morning on the economic front we get UK Industrial Production, trade figures and the NIESR’s running estimate of how GDP is tracking through February at 9.30 am. All are some reference to the triple dip recession debate and the related prospects for the BOE agreeing to undertake more QE and with the ongoing fate of Sterling, which still remains the poorest performing G10 Currency. We also have German CPI at 10.00 am and then later, in the US, at the earlier time of 12:30 pm we have the NFIB Small Business Optimism Index and the Monthly Budget Statement.
June S&P 500
Yesterdays close makes it nine out of the last ten days that the market has closed higher however this rise continues on waning volume with daily volume indicating the third slowest session of the year. The Vix Index of S&P implied volatility has made a new cycle low off almost a full point to 11.7 which is the lowest since February 2007. The Daily Sentiment Index that I mentioned yesterday has now risen to 86% S&P Bulls which is another worrying sign of a pending top in the market. However as we are less that 0.5% from making a new record high the chances are that the market is going to make this record before reversing. The March S&P traded up to my sell zone yesterday and I went short at 1556 and I have covered this position at 1554 this morning as we have now rolled to the June contract at a discount of five handles. Today I am a seller of the June contract on any rally to 1558/1562 with a 1566 stop. As the market is so overbought and even though I think we will make a new record high I do not want to be long the market at these levels.
Euro/USD
No change from yesterday as I am still a buyer on any dip to 1.2950/1.2975 with a 1.2935 stop.
June BUND
The Bund traded down to my buy level and I have gone long the market at 142.60. I will leave my stop the same at 142.20 and I will look to take profit on any move back to the 142.95/143.20 area. If the market rallies and I manage to take profit I will look to reset my long position on any subsequent sell off to the 142.40/142.60 area with the same 142.20 stop.
March DAX
No change as I am still a seller on any rally to 8020/8040 with a 8060 stop.
June Dow
The June Dow is now the front month and we have rolled at a discount of 64 points to the March Contract. I went short the March at 14420 and as we have now rolled to the June contract I have covered this position for a small loss at 14430 and I am now flat. Today I will look to sell the June contract on any rally to 14400/14430 with the same 14460 stop.
Silver Rolling Contract
Silver continues to trade in a narrow range and this morning I have raised my buy level to 28.50/28.80 with a tight 28.25 stop which is just below Fridays low.
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