A rally on risk sentiment in the European session, driven in part by progress by the Eurogroup starting to flesh out some of the plans for Spanish Bank Recapitalisation combined with a thinly veiled threat from German Finance Minister Schaueble that secondary market bond buying via the ECB could happen at anytime, was offset by another weak US Stock Market session. The Euro continues to trade heavy and was not helped by the news that Italian PM Monti would not seek a second term next year. A hearing by the German Constitutional Court on whether the ESM and planned changes to the regions budget rules are compatible with German law raised fears of a protracted struggle to resolve the debt crisis. Today all eyes will be on the FOMC Minutes to see if there was any mention of QE. We also have Trade Nos from the US at 1.30pm.
Sept S&P 500
The S&P traded up to my sell level and I was able to take profit at 1355 on my 1346 long. I did not do another trade last night but I was surprised to see how weak the market closed. We still have this open GAP from 1321 which is now open for 11 days. Today I will look to go long from 1325/1330 with a wider 1319 stop as I am still convinced we will get a large rally off the 1321 level. I will also look to go short from 1344/1349 with a 1351 stop.
Sept DAX
The Dax had a nice rally off the 6360 area and I was able to take profit on my 6375 long at 6440 and I am now flat. The Dax, having looked heavy yesterday, now looks bid this morning and I will look to go long on any dip to 6390/6410 with a 6350 stop. If I am taken long I will look to take profit from 6450/6480.
Silver
Silver also had a nice rally and I was able to take profit on my 26.95 long at 27.50 and I am now flat. Silver is lower this morning and I will look to reset my long position from 26.40/26.70 with a 25.95 stop. Again I am only trading in small size given how volatile Silver is.
EURO
The Euro rallied yesterday morning but just missed my target profit level. I was subsequently stopped out at 1.2250 and I am now flat. I find the Euro the most difficult market to trade and I am going to stay flat and watch the market for the next 24 hours.
Sept Bund
I am still short from 144.00 for the last 2 days and the market has not moved. I will leave my stop the same at 144.30 and I will raise my profit target to 143.80.
Sept FTSE
The FTSE still looks bid to me and I will look to go long from 5560/5580 with a 5540 stop.
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