US Equities continue to trade higher with the S&P closing up 0.4%, with risk appetite stronger and the US Dollar generally lower across the board. The Yen has been less of an influence on global currency markets over the last 24 hours, although the Yen is slightly stronger versus the US Dollar on a combination of profit taking and perhaps also as a Safe Haven on reports that North Korea was ready to fire another missile. However levels over YEN 100 versus the US Dollar seems only a matter of time as Japan continues its own aggressive QE. Equity strength and Dollar weakness means that commodity prices are firmer pretty much across the board especially Gold and Silver where George Soros is rumoured to have been a large buyer of Gold yesterday. Market moving news has been light, in fact probably the biggest influence on markets over the last 24 hours was yesteday’s softer than expected China Inflation news where CPI came in at 2.1%, down from 3.2% the previous month. Fed’s Bullard (FOMC voter) said yesterday that last week’s Employment Report does not change his outlook for unemployment to drop to 7% this year and expects policy makers to ratchet down the pace of Bond purchases as the economy continues to improve.
On the economic front today we have French Industrial Production this morning whilst Germany and Italy are selling Bonds. Later in the US we have the Monthly Budget Statement followed by the Fed releasing its minutes from the 20th March FOMC meeting. Fisher from the Fed will speak later , in Texas, on Monetary Policy.
June S&P 500
The mantra of ‘I do not want to be short this market’ continues as the S&P continues to attract buyers on any dip. Yesterday, shortly after the open in Chicago the S&P dropped down to my 1558 buy level with a 1555.50 low before having a nice rally to new highs at 1569 before having a small sell off into the close. I took profit on my 1558 long position at 1565 and I am now flat. I still do not want to be short this market as I still feel the Cash S&P will make new high at 1575 which last occurred in October 2007, this equates to 1570 in the June Futures Contract. Today I will be a buyer on any dip in small to 1559/1563 with a stop at 1554 which is just below yesterday’s low as I look for the S&P to trade up the 1580/1590 resistance area.
Euro/USD
I was frustrated by the Euro as the market just missed my 1.3010 buy level by a few points before it rallied 100 points. At least I said yesterday not to be short as the market continues to trade higher off last Thursday’s ‘Key Day Reversal’. The Euro is overbought here and at the top of the Bollinger Band but I still do not want to be short as I look for the market to trade up to the 1.3200 resistance zone. Today I will be a small buyer on any dip to 1.3030/1.3060 with a 1.3020 stop.
June BUND
Again very unlucky as the Bund also missed my sell level before having a nice sell off. Even though I do not like the Bund at these levels I will not chase the market lower and today I will lower my sell level to 145.70/146.00 with a 146.20 stop on any short position. I still do not want to be short the market.
June DAX
The Dax worked very well yesterday as I was able to take profit at 7730 on my 7702 long position from yesterday morning before the Dax had a nasty sell off to my 7630 buy level with a 7618 low. The Dax then had a nice rally off this important support and I was able to take profit before the close last night at 7670 and I am now flat. I still like the Dax even though the market continues to trade heavy and today I will be a buyer on any dip to 7620/7640 with a 7595 stop. A break and close below 7600 will be bearish.
June FTSE
The FTSE also worked very well and I was able to take profit at 6272 on my 6242 long position and I am now flat. I am impressed how well the FTSE has held the 6240 support zone and today I will be a buyer on any dip to 6235/6250 with the same 6210 stop. I do not want to be short at this time.
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