Yesterday was another day which had two halves to its trading session. After I posted in the morning European stock markets started to fall hard on news of fighting in Slovyansk in Eastern Ukraine and reports of casualities and the shooting down of another military helicopter. This all comes ahead of the May 25 Presidential Elections.
European stocks stayed down for most of the session until the release of the US ISM Non Manufacturing Index for April which lifted growth sentiment and pared back European equity market losses. The ISM rose to 55.2 versus 53.1 last month. The markets were also helped by German Finance Minister, Stenmeier, calling for renewed talks with Russia and a diplomatic solution backed by German Chancellor Merkel who also called for a negotiated outcome. Currency and Bond markets were unmoved by yesterday’s fluctuations in the equity markets with markets generally quiet due to London been closed for the UK May Bank Holiday.
This morning on the economic front we have UK Services PMI at 9.30 am followed by Euro-Zone Retail Sales and Services PMI at 10.00 am. The OECD this morning will also release its Global Economic Outlook. At 1.30 pm we have the latest Trade Balance from the US whilst later this afternoon the Fed’s, Stein, will speak on the Economy in New York.
June S&P 500
The S&P had another strong reversal yesterday but this time it was to the upside and in the process almost generated a Key Day Reversal. The bulls are certainly not going to give this market up without a fight and the fact that we are well into May we have to beware that a sell-off can occur at any time. Yesterday The S&P plan worked well as shortly after I posted the market was trading at my 1867 buy level. It subsequently made a low just below 1861 before having a sharp rally which enabled me to cover this position at 1876 and I am now flat. Today I will buyer on any dip to 1869/1874 with a 1865 stop. If I am taken long and subsequently stopped out I will be a more aggressive buyer in front of the key support at 1850 with a 1845 stop. My only interest in selling the S&P is on a rally to 1887/1892 with a 1895 stop which is just above the contract highs made on April 4.
Euro/USD
The Euro just missed my 1.3860 buy level after I posted yesterday and I am still flat. Today I will lower my buy level slightly to 1.3820/1.3850 with a 1.3790 stop I still do not want to be short the Euro at this time especially with the key ECB Meeting on Thursday.
US Dollar Index
Still no change as the US Dollar continues to have little or no net movement each day. I am still a buyer from 79.20/79.50 with the same 78.80 stop.
June DAX
The Dax plan worked well yesterday as just as I posted it was being hit hard to the down side as the market dropped to my 9460 buy level. The market stayed weak all day until the ISM was released in the US which led to a spike higher in the market which enabled me to cover this position at 9525 and I am now flat. Today I will still be a small seller on any further rally to 9590/9630 with a 9670 stop. I will also be a small buyer on any dip to 9430/9470 with the same 9395 stop.
June FTSE
Unfortunately the UK market was closed yesterday and if it had been open I expect that it would have been a lot lower. I am still short from last Friday at 6795 and today I will lower my stop to 6820 on this position.
Dow Rolling Contract
Just as I posted yesterday morning the Dow was also being hit hard to the downside. I bought the market at 16450 but unfortunately I was stopped out of this position for a small loss at 16420 before the market traded lower only to reverse higher and I am now flat. I still like the Dow and today I will again be a buyer on any dip to 16440/16480 with a 16390 stop on any long position. I still do not want to be short the market at this time.
June BUND
I am still flat the Bund and with the equity markets higher this morning I am going to lower my buy level slightly to 144.10/144.50 with a 143.95 stop on any long position. I still do not want to be short the Bund at this time especially with the key ECB Meeting scheduled for this Thursday.
Gold Rolling Contract
Gold continues to react to any news out of Ukraine. I am still flat and today I will raise my buy level slightly to 1292/1302 with a 1285 stop on any long position.
Silver Rolling Contract
Overnight, Silver has traded down to my 19.50 buy level. I am still long and I will raise my stop to 19.10 on this position. If I am stopped out I will be a more aggressive buyer in front of 18.50 with a 17.90 stop.
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