Yesterday, US Equity markets got an early boost from Citigroup earnings beating expectations which led to all stocks trading higher. There was some downward movement through the day but a late rally saw markets climb into the close with the DOW and S&P 500 closing up 0.9% and 0.8% respectively (Citigroup closed up nearly 5%). Tensions in the Ukraine have kept Bond yields contained whilst the US Dollar is stronger and the Euro a little weaker, especially after the FT report yesterday morning on negative rates.
The US markets were also buoyed by the stronger than expected Retail Sales for March, which rose 1.1% versus 0.9% expected, whilst February was revised higher by 0.2%. Core measures similarly beat market expectations resulting in a shift in belief towards a Spring pickup in US data.
In Europe the previous rhetoric in recent days appeared to weigh on the Euro but there was little new chatter. However increasing tensions in Eastern Ukraine are garnering more attention with Russian President, Putin, talking tough which is raising concerns about further action.
This morning on the economic front we have UK CPI and PPI along with the ONS House Price Index. This is followed at 10.00 am by the very important German ZEW Survey. At 1.30 pm we have the US CPI and the NAHB Housing Market Index. Later this afternoon Fed Chair Yellen will open the Atlanta Fed Conference where she is due to speak on the economy.
June S&P 500
The S&P had another wild trading session yesterday as the market rallied from its 1810 support to trade as high as 1828, just missing my 1829 sell level before falling 15 handles to 1813. The market later turned around in the last 40 minutes of trading to rally back to 1825. As I suggested yesterday that when a rally occurred it would be short and violent as the market would head back to last Thursday’s breakdown at the 1830/1835 resistance level.
I am still flat the S&P and today I will leave my sell level the same at 1829/1835 with 1838 stop. If the market trades into my sell level I am then looking for a move back to 1810/1815 and then 1770/1790 where I would look to exit any short positions and set up a long position as this 1775/1790 area has very good support. If I am stopped out of any short position I will be a more aggressive seller on any rally to 1842/1848 with a 1851 stop.
Euro/USD
No change as I am still long in small size from early yesterday morning at 1.3840 with the same 1.3790 stop. If I am stopped out I will be a more aggressive buyer on any further drop to 1.3740/1.3770 with a 1.3725 stop. I still do not want to be short the Euro at this time.
US Dollar Index
The US Dollar had a better trading day yesterday as it moved higher against all major currencies. I am still flat the Dollar Index and today I will raise my buy level slightly to 79.20/79.50 with a 78.75 stop on any long position which is just below last November’s low.
June DAX
The DAX plan worked very well yesterday as shortly after I posted it traded up to my 9340 sell level before having a nice sell-off which enabled me to cover this position at 9295 and I am now flat. Today I will still be a seller on any further rally to 9360/9390 with a 9430 stop. My only interest in buying the DAX is on any dip to 9150/9190 with a 9125 stop.
June FTSE
The FTSE plan also worked well yesterday as shortly after I posted it traded up to my 6520 sell level and after a small sell-off I was able to cover this position at 6495 and I am now flat. Today I will raise my sell level to 6530/6560 with a 6580 stop. I still do not want to be long the FTSE at this time especially after last week’s significant Key Day Reversal.
Dow Rolling Contract
Just like the S&P, the Dow also had a wild trading session yesterday. Shortly after I posted the market traded up to my 16150 sell level and after a nice sell-off I was able to cover this position at 16090 and I am now flat. So far the key 16050 support level is holding whilst strong resistance comes in at 16190/16250. Today I will be a seller on any rally to 16200/16250 with a 16285 stop. I still do not want to be long the market at this time unless we trade down to 15890/15930 where I will be a buyer with a 15860 stop.
June BUND
No change as I am still a buyer on any dip to 143.40/143.70 with a 143.25 stop. I still do not want to be short the Bund at this time.
Gold Rolling Contract
Gold is lower this morning and has just traded down to my 1313 buy level. I will lower my stop slightly to 1299 on this position.
Silver Rolling Contract.
No change as I am still long in small size at 19.90 with the same 19.60 stop. If I am stopped out of this position I will be a more aggressive buyer on any further dip to 19.10/19.40 with a 18.80 stop.
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