A dearth of news and thinning liquidity due to the start of the European holiday season made for a very quiet day yesterday. Consolidation has been the order of the day. Still, the the positive afterglow from last week’s positive US Jobs Report and the ECB’s new bond buying stance remains in place. Spanish and Italian yields fell by 10 basis points leading to a small rally in Equity and Commodity markets. In the US, the latest quarterly Fed Senior Loan Officers Survey reported stronger demand for many types of loans whilst modest fractions of domestic banks on balance have continued to report having eased their lending standards across most loan types over the past three months. So encouraging signs for US growth. Later this morning we have Industrial Production and Manufacturing data from the UK. This afternoon we have Consumer Credit from the US followed by Bernanke speaking in Washington.
Sept S&P 500
The S&P worked well, as shortly after I posted yesterday the market dropped into my buy zone at 1388 and then rallied to 1396 before having a late sell off. As I have said before, when you see 5-7 handles (points) on the table always take your profit and start again. I took small profit yesterday and I am now flat.
Today I will look to go long from 1382/1387 with a 1380 stop and I still want to short the first time from 1398/1402 with a 1405 stop. The market is too near 1400 for it not to test this level.
EURO/USD
The Euro touched my buy zone of 1.2310/1.2340 with a 1.2340 low. I did not get filled myself and I am still flat. I will use the same parameters as yesterday where I will look to go long in this area with a 1.2300 stop and I still want to go short from 1.2420/1.2450 with 1.2460 stop, as a break and close over 1.2450 will be short term bullish.
EURO/JPY
This currency pair dropped down to my buy area and I am long at .9695. I will leave a .9665 stop and if we rally back to the .9740/.9770 I will look to take profit. If I manage to take profit in this area I will still look to go long again on any dip back to the .9700 area.
Sept FTSE
The FTSE entered my sell area of 5770/5800 and I am short from 5788. I will leave a tight stop at 5810 and I will look to take profit on any dip back to the 5720/5740. If I manage to take profit I will be a seller again in front of 5800 with a 5825 stop.
Sept BUND
No change from yesterday as the market just missed my 142.80 buy level. I will leave my buy level the same and if I am taken long I will look to take profit at 143.40. I will leave a 142.60 stop on any long position.
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