The Euro forged ahead yesterday on speculation that Fitch was going to downgrade the credit rating of the US. The US Dollar was not helped by the weaker than expected Consumer Confidence in August which not only fell back to its lowest level since last November but the Jobs Plentiful Index also backtracked, a reflection on the street of a stagnant job market. In Europe this morning Spain is back in the news with its largest region, Catalonia, seeking a 5billion Euro bailout from a National Government Fund. This is the second region to do so amid concerns that the economy has contracted more than initially reported in Q2. Today is a busy day on the economic front as we have German CPI followed in the US by revised GDP for Q2 which is expected to show an increase of 1.7% up from the preliminary release of +1.5%. We also have July Pending Home Sales and, most importantly, the Feds Beige Book which is supposed to set the scene for the September 14, FOMC Meeting.
Sept S&P 500
The low volatility continues ahead of Bernankes speech on Friday. No matter how weak the economic news is the market refuses to go down and is still giving Bernanke the benefit of the doubt. I was very unlucky as the market just missed my buy and sell levels by 1 handle and I am still flat. I am going to leave the guidelines the same as yesterday. I will look to go long from 1398/1402 with a 1396 stop which is last weeks low and I will
look to go short from 1412/1416 with a stop at 1418 which has capped the up move on three occasions so far.
EURO/USD
The Euro worked well yesterday helped by the Fitch speculation of the downgrade for the US. I took profit on my 1.2480 long at 1.2535 and I am now flat. Today I will look to go long from 1.2480/1.2510 with a tight 1.2470 stop and I will also look to go short, in small size, in front of 1.2600 with a 1.2630 stop.
Sept DAX
The Dax worked well yesterday as, after I posted, we traded up to my sell level with a 7030 high before sellers emerged and the market gradually traded back to 6980. I managed to make 30 points which made up for my loss on Monday. I still don’t like the DAX on the back of the large Key Day Reversal that we had last Thursday and as long as we stay below 7113 the market is short term bearish. Today I will leave my sell level the same from 7020/7050 with a 7060 stop. Again if I see 40/50 points on any short I will take it and go flat.
USD/JPY
No change, I am still long from 7850 and I will leave my stop the same at 7820. I will take profit on any move up to the 7900 level.
Oct Crude Oil
A very quite day for Crude after the wild Monday. As long as Crude stays over the low made on Monday at 9445 the market is short term bullish. Today I will look to go long from 9470/9500 and if I am taken long I will leave my stop at 9440.
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