The reality facing Europe hit fast once we got past the Greek elections, with markets fading the initial optimism relatively quickly. Equity markets were mixed, Commodities were generally lower and Gold higher. Bond yields were also mixed but yields in Spain and Italy rose to worrying levels. Whilst Greece may stay in the Euro for now, and the immediate tail risk is removed, the markets quickly moved on to the remaining issues. Spain is the current problem with yields rising and the upcoming auditors report on banks and housing likely to suggest that more funds are needed. Market stories are now starting to air concerns about Italy. The G20 Meeting continued and an announcement of the contribution to the IMF’s Firewall Fund is expected soon. Today we have CPI from the UK and Housing Stats from the US. The FED also begin their two day meeting.
Sept S&P 500
The S&P dropped down to my buy zone with a 1328 low and then rallied in the last hour to 1340. I took a 7 point gain and I am now flat. I do not want to be short ahead of the Fed meeting and I will look to buy any pullback to 1332/1336 with a stop below yesterdays low of 1328. I will look to take profit on any rally to 1349.
Sept DAX
I bought the Dax yesterday at 6240 and I will leave a 6220 stop on this position. The market should hold this support but if we break 6200 it will be bearish. I will look to take profit on any move to 6320.
EURO
I bought the Euro at 1.2610 yesterday but I left my stop too tight at 1.2570 and we are now back to my buy level. I went long again this morning at 1.2610 in small and I will leave a wider stop at 1.2540 as I think we will get speculation of QE ahead of the Fed announcement tomorrow and I want give this position some room. I will look to take profit from 1.2670/1.2700.
Sept FTSE
No change from yesterday as I look to go short from 5510/5530 with 5550 stop which is the top of the Bollinger Band.
Sept Bund
The Bund has had a wild few days and I will look to go short from 142.75/143.00 with a tight 143.10 stop as the 143.00 is now a very important level. If we break and close above 143.00 it will be short term bullish.
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