The FOMC minutes removed expectations of more QE and looked to worsening growth as a catalyst for policy easing. It appears there may be no more cheap money in the offing from the Fed and the risk markets are not happy with this. The USD is sharply higher across the board. The focus now turns to the labour market with the Fed’s Williams and Lockhart both noting that the Fed could remove accommodation before 2014. Tomorrow’s Weekly Jobs Nos and Friday’s Non-Farm Payrolls will be of major interest.
S&P 500
The S&P short trade worked out nicely as we tested the 1400/1405 level where I went flat and I am now long. I will leave a stop of 1398 as I look for the market to close the Gap. If I am taken out of my long I will look to reset from 1385/1390 with a stop below 1382, a break of which will be very bearish.
EURO
The Euro was trading nicely until the FOMC minutes and then got crushed. I was taken out of my long and I am now flat. 1.3250/1.3280 will offer strong resistance and I will sell on any move to this area. I do not want to be long here.
DAX
Yesterday proved how important it is to have stops in the market. I was taken out of my long before the FOMC at 6990 and I am now flat. 6850/6890 is next support and 6970/7000 will be strong resistance and I will try to play this range.
Bund
Despite the sell off in the US bond markets the Bund is not following suit and I want to buy from 137.70/138.00 with a 137.40 stop looking for a test of 139.00
Natural Gas
Natural Gas finally had an up day yesterday and I have moved my stop up to 2.05 which is the recent low. If we can break and close over 2.20 I will add to my position.
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