There was very little by way of significant market price action to note yesterday. Global Equities were lower, more-so in Europe than the US, with last Friday’s strong rebound in risk assets perhaps seen to reflect an unwarranted degree of complacency regarding the ramifications of the downing of Flight MH-17 over Ukraine. Last night the UN passed a resolution (with Russian support) endorsing an independent investigation into the cause of the crash. Meanwhile Russian separatists have reportedly begun the process of allowing transportation of the remains of the victims to the Netherlands for identification.
US stock index losses averaged 0.25% whilst the German DAX was been the biggest loser in Europe (-1.11%). This is likely on the basis of Germany having the biggest trade ties with Russia including receiving 30% of its gas and selling €26.5 billion of its exports last year. A downbeat Bundesbank Report on the current health of the German Economy also looks to have played a part.
The US Dollar is a little higher despite the fact that 10-Year Treasury Bond Yields are lower by 1.5 basis points, at 2.48%, consistent with some renewed safe haven support for both Treasuries and the US currency.
This morning on the economic front we have UK CBI Industrial Trends, Orders/Prices at 11.00 am. This is followed at 1.30 pm by US CPI. At 2 pm we have the US FHFA House Price Index, whilst at 3 pm we have the Richmond Fed Manufacturing Index and Existing Home Sales. The Euro-Zone will release its latest Consumer Confidence also at 3 pm.
September S&P 500
The S&P plan worked well yesterday as shortly after I posted it started to sell off, taking its lead from the German Dax which was very heavy all day and this enabled me to cover my open1972 position, from late Friday, at 1966. It continued to drop and eventually hit my 1962 buy level with a 1958.50 low before the market stabilised and yet again rallied into the close. I covered this long position at 1968 and I am now flat.
I still like the S&P despite the market been overbought and this view will continue until we get three decent consecutive down-days as it is too near the key 2000 level for the market not to at least test this area. Today I will be a buyer from 1961/1965 with a 1957 stop which is just below yesterday’s low. My only interest in selling the S&P is on a rally to 1978/1983 with a 1986 stop. If I am taken short and subsequently stopped out I will be a more aggressive seller in front of 1996 with a 2003 stop.
Euro/USD
The Euro had a nice rally after I posted yesterday which enabled me to cover my long 1.3515 position at 1.3540 and I am now flat. It still has good support at 1.3480/1.3500 and today I will again be a small buyer from 1.3490/1.3510 with the same 1.3475 stop. I still do not want to be short the Euro at this time.
US Dollar Index
With the Dollar trading at the top of its Bollinger Band I do not want to chase this market higher so therefore I will keep my buy level the same at 80.00/80.25 with a 79.70 stop.
September DAX
By the time I posted yesterday morning the Dax was in freefall and had passed through my buy levels. It bottomed just below my stop level and was trading at the bottom of its Bollinger Band and Williams Index. This morning it is trading nearly 90 points higher as yet again the Bollinger Band, coupled with the Williams Index, has given another strong buy signal. I am still flat the Dax and today I will look to buy the market on any dip to 9630/9660 with a 9590 stop which is just below yesterday’s low. Given how oversold it is trading I do not want to be short the market at this time.
September FTSE
The FTSE is trying to break higher this morning and is at the key 6710 resistance level. I still believe it will trade higher as it had a very small sell-off yesterday despite the fact the Dax and the US markets were getting hit hard. Today I will be a small buyer form 6695/6710 with a 6675 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The Dow plan also worked well yesterday as shortly after the US markets opened it started to sell-off which enable me to cover my short 17090 position from last Friday at 17040 and I am now flat. Presently the Dow is trading the heavier of the three major US Indices and today I will again be a small seller on any rally to 17130/17160 with a 17210 stop. I still do not want to be long at this time.
September BUND
No change as I am still short the Bund from last week at 148.40. Today I will lower my stop to 148.60.
Gold Rolling Contract
Thankfully I covered my long Gold position yesterday morning as it is lower today on the back of the higher Equity markets. Today I am going to lower my buy level to 1292/1298 with a 1287 stop which is just below the low made earlier this month.
Silver Rolling Contract
Silver is continuing to trade stronger than Gold at this time. I am still long from last week at 20.85 and today I will raise my stop to 20.45 on this position.
Recent Comments