US Equities had a bad day yesterday, extending last Friday’s losses, although the markets did rally into the close with the S&P closing down 0.5% having been down 1% earlier. The biggest loser again was the NASDAQ which closed down 1.2% following its 1% loss last Friday. On the currency markets we saw some volatility in the Euro versus the US Dollar, initially up after PMI data from France significantly exceeded expectations, only to retrace when Germany’s readings came in below expectations. The Euro then rose after Europe closed from a low of 1.3750 to 1.3840 currently.
The overall Euro-Zone composite PMI at 53.2 was in line with consensus and down only very slightly at 53.3 last month. For Q1 as a whole most economists see the data as consistent with reasonably good GDP growth of around 0.5%.The US Market Flash PMI meanwhile, at 55.5, was down on February and a point below expectations.
On the political front, Russia has been suspended from the G8 as leaders warn of more sanctions whilst in commodities, Gold and Silver were the big losers falling nearly 2% and 1.4% respectively.
Today, in contrast to yesterday’s slow data releases, is very busy. This morning we have UK CBI Reported Sales, PPI and the House Price Index. This is followed at 10.00 am by the very important German IFO Survey. Later at 12.30 pm we have US House Price Index followed by Consumer Confidence Index, Richmond Fed Manufacturing Index and New Home Sales.
June S&P 500
The S&P had another wild trading session yesterday as the market again tried to close the open Gap from last Monday from 1832/1842.5 with a new low of 1841 before it regained some composure into the close to finish at 1850. As I have mentioned over the last month the key level for the downside comes in at 1829 which is just below the Gap low at 1832 and as long as the S&P can stay over 1825 level then this market is still bullish but a break and close below 1825 will be very bearish.
It is interesting that the Dow is now the better performing Index in the US in comparison to what happened in the previous 10 weeks. Yesterday, after I was finally able to post due the serious internet problems that we had with our server, my S&P long position from 1859 was finally stopped out for a small loss at 1855 and I am still flat. Today I will be small buyer on any dip to 1840/1844 with a 1837 stop. If I am taken long and subsequently stopped out I will be a more aggressive buyer on any further dip to 1830/18340 with a 1824 stop. As we have such a large open Gap below the market (which I expect to be filled at some stage) I would also look for a large move back higher initially after this Gap is filled. My only interest in shorting the S&P is from 1860/1865 with a 1868 stop.
Euro/USD
The Euro plan worked well yesterday as the market traded down to my 1.3780 buy level and after again holding the key 1.3760 support area had a nice rally after the European Markets closed and I was able to cover this position at 1.3820 and I am now flat. One of the reasons that I cannot get too bearish on US stock markets is the fact that the Euro is holding in so well with every dip getting bought. As I mentioned yesterday as long as the Euro can stay over 1.3760 this market is still bullish. Today I will be a buyer on any dip to 1.3790/1.3820 with a 1.3770 stop. I still do not want to be short the Euro at this time.
US Dollar Index
With the Euro looking so strong, and the fact that the Aussi Dollar is also surprisingly very strong given the weakness of yesterday’s Chinese PMI data, I have decided to cover my long 79.45 US Dollar Index position at 80.05 this morning and I am now flat. I will still look to reset my long position on any dip to 79.60 with a 79.30 stop.
June DAX
When I was creating my trading plan early yesterday morning, the June Dax was trading near 9400 and I never expected it to fall over 200 points from this early high and in the process to register another significant Key Day Reversal. After I finally posted, the DAX was trading at my 9280 buy level and after a quick sell-off I was stopped out of this position at 9240 and I am now flat. The next key support for this market comes in at 9165 and a break and close below here opens up the possibility to retest the 8908 low from two weeks ago. This morning I will be a small buyer on any dip to 9150/9175 with a tight 9130 stop. If the Dax breaks and closes below this key 9165 level I will then look to set up a short position.
June FTSE
The FTSE, just like the Dow, are the two indices which are trading the strongest of the major equity markets at this time. I bought the June FTSE yesterday morning at 6470 and I am still long. I want to give this trade some room and I will leave my stop the same at 6440.
Dow Rolling Contract
The Dow also traded down to my 16250 buy level after I posted yesterday morning. I am still long and I will leave my stop at 16190 which is just below the key support at 16210/16240 where the 14 year trendline comes in.
June BUND
The Bund had a very large up move yesterday especially after the equity markets were hit. I went short the market at 143.15 and I will leave a 143.35 stop on this position. If the Bund does not break back below 143.00 today I will also look to cover my short position.
Gold Rolling Contract
After I posted yesterday morning Gold traded down to my 1315 buy level. I am still long and I will leave my stop the same at 1305.
Silver Rolling Contract
Silver also traded down to my 19.90 buy level. It is trading better than Gold at this time and I will leave my stop the same at 19.45. If I am stopped out of this position I will be a very aggressive buyer on any dip to 18.70/19.00 with a 18.30 stop.
Recent Comments