With US markets shut for the Martin Luther King Holiday we had a predictably quiet day yesterday. The only news of note was that the IMF is set to upgrade its 2014 growth outlook for the UK from 1.9% to 2.4% according to various news reports. This looks to be responsible for UK stocks bucking the trend of weaker stocks elsewhere in Europe. The FTSE gained 0.12% whilst the other European indices ended the day slightly lower. On the currency markets, the Aussi Dollar has been the strongest performer of the G10 basket.
This morning European markets are opening stronger after Asian stocks rose overnight driven by gains in China after their money market rates had their biggest fall in 4 weeks.
This morning on the economic front we have UK CBI Trends and Total Orders. This is followed at 10.00 am by the latest German ZEW Survey which is expected to show a small improvements in both the current situation and the expectations readings. There is no data of note due from the US as we await the IMF in Washington to publish its latest World Economic Outlook Update.
March S&P 500
Yesterday was predictably a very quiet trading day with the cash market closed and the futures markets in the US closing early for the Martin Luther King Day Bank Holiday. The Futures have opened stronger overnight as Chinese money market rates have fallen. I have cut half my long 1832.50 position from yesterday morning at 1840 and I will leave a breakeven stop on the other half. Today if I am stopped out I will look to reset a long position on any dip to 1833/1836 with a 1829 stop. I will still be a small seller on any rally to 1846/1849 with a 1851 stop. Remember a break and close over 1850 will be very bullish as the market will have closed at new contract highs.
Euro/USD
The Euro worked well yesterday as, after I posted, the Euro spent the rest of the day trading higher enabling me to cover my long 1.3530 position at 1.3565 and I am now flat. Today I will be a buyer of the Euro on any dip to 1.3500/1.3530 with a 1.3480 stop. I still do not want to be short the Euro at this time.
US Dollar Index
No change as I am still long from last week at 80.95. I will still leave my stop at 80.85. If the Index can break and close over 81.50 I will look to add to my position.
March DAX
The Dax worked well yesterday as, shortly after I posted, the market traded up to my 9740 sell level before having a nice sell off led by the weakness in Deutsche Bank shares which fell on poor results. I covered this position at 9710 and I am now flat. Today I will raise my sell level to 9770/9795 with a tight 9810 stop which is just above the contract highs made last week. I will also raise my buy level to 9650/9675 with a 9625 stop.
March FTSE
No change as I am still long from 6760 since last Friday. The FTSE is beginning to trade higher and I am still looking for this market to play catch up with the other major indices. Today I will raise my stop to breakeven at 6760.
Dow Rolling Contract
The Dow never traded down to my buy level and is trading higher this morning on the back of the higher Chinese market. The key level for the Dow is 16589 which is the high reached on December 31st. If the Dow can break and close over this level it will lead to a continuation of this incredible 6 year bull market run. Today I will be a small seller into any rally from 16570/16600 with a 16620 stop. I will also raise my buy level today to 16410/16440 with a 16380 stop.
March BUND
The Bund is trading slightly heavy this morning and is back trading below the key 141.50 resistance level. Today I will be a small seller from 141.40/141.60 with a 141.75 stop. I will also lower my buy level to 140.60/140.90 with a 140.40 stop.
Gold Rolling Contract
No change as I am still long in small size at 1255 with the same 1242 stop. I am disappointed that we have had no follow through on the break of the key 1250 resistance level and it will be interesting to see what Gold does when the US Markets reopen later this afternoon after their long weekend.
Silver Rolling Contract
Silver after the initial surge last week has been trading in a very quiet range over the last few days. I am still long at 20.20 and I will leave my stop the same at 19.90. Again if I am stopped out I will be a more aggressive buyer on any dip to 19.40/19.70 with a 1920 stop.
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