Markets are generally in a holding pattern ahead of the Jackson Hole Summit on Friday. The German IFO Survey for August continued to soften as the headline Business Climate Index fell another point, confirming the further weakness of the economy into the September Quarter. The survey for the Current Assessment Component Index has now fallen from 117.0 in March to a current reading of 112.5, pointing to the economy loosing what growth momentum it had gained in Quarter 2. Charles Evans from the Fed, speaking in Hong Kong yesterday, called for more purchases of mortgage-backed securities,
saying the time for action is now. Today is busy on the data front as this morning we have Spanish Revised Q2 GDP and Euro-Zone Money Supply numbers. This is followed in the US by June Case-Shiller House Prices, August US Consumer Confidence and the Richmond Fed Manufacturing Index.
Sept S&P 500
Just after I posted yesterday, the S&P traded up to the top of my sell level at 1416. After the open the market dropped to close the gap at 1409. Again as I keep saying when I see my 5/6 handle profit especially in a quiet market you take your profit and start again. I am now flat and I want to try and get long ahead of Friday. Today I will look to go long from
1398/1402 with a 1396 stop. If I am taken long I will look to take profit in front of 1410. If the market rallies back to the 1412/1416 area I will look to go short here with the same 1418 stop.
EURO/USD
The Euro has dropped down to my buy level and I have gone long in small at 1.2480. I am surprised that the Euro has fallen. I will leave my stop the same at 1.2445 and if I see 40/50 points profit I will take it. If I manage to make a profit on this trade and the market subsequently drops back to the 1.2450 area I will not trade and just observe how the
market trades.
Oct Crude
Very unlucky as the market just missed my 9790 sell area before falling over 3 Dollars to a low of 9445. Today I will use any weakness to 9480/9520 to go long in very small with a stop below yesterdays low. On the other hand if the market rallies back to 9750 area I will look to go short here with a 9810 stop.
Sept DAX
As expected in a thin market, I was stopped out of my 6980 short at 6995 and I am now flat. I still don’t like the Dax and I still want to respect the Key Day Reversal from last Thursday. Today I will look to go short again only in small given the volatility from 7020/7050 with a stop above yesterdays high at 7050.
USD/JPY
The USD/JPY has just entered my buy zone and I have gone long here at 7850. I will lower my stop to 7820 and I will look to take any profit on a move back to the 7900 area.
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