A more positive tone to markets yesterday with little news and very little liquidity as the US is closed today for the July 4th holiday. All eyes will be on the ECB and BOE tomorrow to see whether we get any easing in policy and this is followed by the US Payroll No’s on Friday. The negotiations between Greece and the Troika begin today. Greece has lowered its growth forecasts, which is not surprising, with the new Government wanting to position itself for some leniency from the Troika. There will also be a lot of focus on the UK’s LIBOR Investigations. In other news, US Factory Orders came in better than expected and the IMF have lowered their growth forcasts for the US to 2% for this year and 2.25% for 2013. Monti said there may be need for another EU Summit, on July 20th, to address Finland’s and Netherlands’ objections to ESM Bond buying.
Sept S&P 500
The S&P traded quietly higher all day yesterday, on thin volume. The McClellan Oscillator is near ‘overbought’ levels but seasonaly this is a generally bullish week for the stock market making it very costly to be short. I went short yesterday at 1365 and I will leave a 1371 stop on this position. The cash market is closed but the Futures are open until 4.30pm. I will look to take profit at 1360 as I want to be flat ahead of tomorrows’ ECB and BOE announcements.
Sept FTSE
The FTSE traded up to my sell level yesterday and I went short at 5645. Again this market is very overbought and I will leave my stop at 5660 which is just above the overnight high. I have no interest in been long the FTSE at these high levels as so much is priced into tomorrow and the market is ripe for disappointment and a sell off.
Silver
I bought Silver at 27.80 yesterday and, like Crude, I am convinced we are putting in a good bottom in Silver. I will leave a 27.70 stop and I will look to take profit at 28.50/28.70 which is good resistance. A closing break over 29.00 will be very bullish.
Sept EURO
The Euro just fell short of my buy area and then rallied 70 points before falling back again overnight. I will leave my buy area the same at 1.2530/1.2550 with a 1.2495 stop. Given how strong Equities and Commodities are, I am very surprised the US Dollar is not weaker but you have got to respect what the market is telling us.
Sept DAX
I was stopped out of my small short 6525 position at 6570 and I am now flat. I will stay this way today and see how we are trading tomorrow ahead of the ECB Meeting.
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