Monday was a day of consolidation and profit taking after the big moves over the last week. The S&P fell 0.3% after a 5.1% rise over the previous 10 days. US Empire Manufacturing data was very disappointing and fell to its lowest level since 2009 at -10.41 from -5.41, the previous month, and this weighed on market sentiment. This fall in the Empire Index is a reminder as to why the Fed has decided to throw the kitchen sink at the ongoing anaemic US growth rate. Nothing came out of the EU Finance Ministers meeting in Cyprus, causing some disappointment in Europe. Spanish yields are higher this morning as people in Spain continue to protest over the austerity measures being applied.
The big news this morning will be the ZEW from Germany and the US Home Builders Sentiment Index at 1.30pm. This will be followed by a speech from Dudley who is head of the New York Fed and an FOMC voter who will no doubt cast further light on last weeks monetary policy easing announcement.
Sept S&P 500
I am still short at 1469 and I am going to stay short as I dont like the market at these levels. As I said since last Friday the 1465/1470 is massive resistance and as long as we dont close over 1470 I still believe we will go back to the 1440/1445 area where I will look to cover my short and go long. The 1438/1441 will be short term support as 1438 was the low which was put in after the FOMC meeting before the market had a 35 handle rally.
Dec BUND
The Bund continues to work well and I have just taken profit on my 138.72 long from yesterday at 139.40 this morning. If the Bund continues to rally I will look to go short from 139.90/140.20 with a 140.40 stop. I will look to reset my long position on any dip to the 138.80/139.10 area with a 138.65 stop.
EURO/USD
Finally a profit in the Euro after been stopped out of my previous two trades. I went short yesterday at 1.3140 and I have taken profit this morning at 1.3075 and I am now flat. I will still look to go long on any dip to the 1.3000/1.3030 area with a 1.2995 stop. On the other hand if the Euro rallies I will be a seller at the same level as yesterday of 1.3130/1.3160 with a stop if over 1.3175.
Sept DAX
The Dax continues to trade heavy and it entered my sell zone after I posted yesterday morning. I went short at 7415 and I have taken profit this morning at 7340 and I am now flat. The next major support for the Dax comes in from 7210/7250 and I will be an aggressive buyer here with a 7195 stop. I will look to reset my short position from 7385/7410 with a 7425 stop.
Sept FTSE
I was stopped out of my 5860 long position for a profit overnight at 5880 and I am now flat. I still like the FTSE versus the other Equity Indices and I will look to go long on any dip to the 5810/5835 area with a 5795 stop. I do not want to be short the FTSE at this time.
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