The prospects of more policy easing is buoying markets ahead of the FOMC announcement which at 5.30 pm today. This is followed by a press conference from Fed Chairman Bernanke. Equities, Commodities and Bond yields are all higher while periphery yields are all easing off. Markets are optimistic enough that conditions have deteriorated enough in the UK, US and Europe to warrant more policy easing. There is also the hope that with the calendar littered with Summits and EU meetings that something concrete is forthcoming from Europe. German ZEW was weaker than expected but the markets ignored these no’s and UK CPI came in at its lowest level since 2008. Today we have UK unemployment and the BOE minutes ahead of the FOMC later.
Sept S&P 500
After posting yesterday the S&P fell but just missed my buy level at 1335 and then rallied to 1357 before fading in the last hour. The market is becoming short term overbought and I want to sell from 1357/1362 with a 1365 stop. We should be quiet to higher ahead of the FOMC and then we go on hold ahead of the press conference from Bernanke.
EURO
The Euro worked very well and as I was able to take a nice gain at 1.2700 on my 1.2610 long. Today I am flat and I dont have any real feel for the market ahead of the FOMC. If the Euro rallies after the FOMC I will look to go short from 1.2770/1.2810 with a 1.2840 stop. For a change I do not want to be long the Euro at this time.
Sept DAX
The DAX also worked well and I was able to take profit at 6320 on my 6240 long. It is amazing how strong the DAX is considering how weak the ZEW came in yesterday. If the DAX dips back to the 6250/6280 I will go long again with a 6230 stop.
Sept FTSE
Unfortunately I put my stop too tight on my 5525 short at 5550 and, after being stopped out, the market came back down to 5525 this morning. As the FTSE is at the top of the Bollinger Band I will look to go short again from 5540/5570 with a 5590 stop. I will look to trade in smaller size with a larger stop. I do not want to be long FTSE at this time.
Sept Bund
Again the Bund just missed my sell level and we are now 170 points lower this morning. I have gone long the Bund at 141.00 with a 140.65 stop and I will look to take profit on any move back to 141.60/141.90.
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