A very positive tone to the markets yesterday on the back of the continued easing policy by Bernanke. The US is at an interesting juncture as we have the economic data improving but unemployment still remains high. Bernanke’s view that the current high rate of unemployment is both cyclical and structural suggest that he will do his best to keep policy accommodative thus meaning a weak dollar. The market was also encouraged by Merkels support for combined ESM and ESRF thus helping the Euro.
S&P 500
The S&P had a nice break of 1400 enabling me to go long. I covered my position at 1415 last night and we now have strong resistance at 1420. I will go short between 1418/1423 with a 1427 stop looking for a retest of 1402/1405 which will offer strong support.
Euro
After my commentary yesterday, the Euro traded at 1.32 and then went bid on the back of Bernanke and Merkel. I want to buy on any dip to 1.3320 with a 1.3280 stop looking for a test of 1.3450/1.3500 where long term sellers should emerge.
DAX
I was quickly stopped out of my short position and I still believe we are putting in a medium term top near 7200. I want to reset shorts from 7170/7200 with a 7220 stop which is the high of 2 weeks ago.
Bund
The Bund just missed my sell level yesterday and then went down to my buy area at 136.60. I am long in a small position here with a stop of 136.40. I will also look to sell on any move to 137.20/137.40.
Natural Gas
Natural Gas has fallen dramatically over the last 3 years and is now approaching long term support. We are trading at 2.20 in the April contract and I want to buy from 2.08/2.13 with a 1.90 stop. This contract has fallen from a high of 16.00 over the last few years.
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