US Equities closed higher yesterday, after the Labor Weekend break, with Dow closing up 0.2% but well off it’s intra-day highs. It was up 120 points in early trading after a solid ISM Manufacturing Report, where the Index rose to 55.7 for August from 55.4 in July and beating expectations of a fall to 54.0. It strengthened the case for the Fed to begin tapering QE at the September FOMC meeting but the key focus is still on Friday’s Jobs Report.
However the markets’ mood changed after US House Speaker, John Boehner and Majority Leader, Eric Cantor announced that they supported President Obama’s call for a US led strike on Syria. Equities lost ground with the Dow in negative territory at one stage whilst Oil and Gold surged upwards on this news. Things then settled down and equities drifted upwards into the close.
Today is another busy day for economic data releases. This morning we have UK, German and Euro-Zone PMI Services followed by Euro-Zone GDP and Retail Sales. Later from the US we have Trade Balance, New York ISM and MBA Mortgage Applications. This evening we have the Fed releasing it’s Beige Book whilst the Fed’s Williams is due to speak on Monetary Policy in Portland.
September S&P 500
The big question that I asked yesterday morning was would the US traders leave the large Gap that had developed from Sunday night and this question was answered very quickly after US Speaker, John Boehner announced his support for a strike on Syria. The S&P dropped down to my 1636 buy level with a 1631.5 low before having a nice rally into the close and overnight and I was able to cover this position at 1641 this morning and I am now flat. The fact that Boehner supports military action strengthens President Obama’s case and will make trading tricky until we get the Congressional vote next Monday.
Today I will be a small seller from 1640/1645 with a 1647 stop and my only interest in buying the S&P is on a dip to 1620/1625 which is huge support as a break and close below 1620 is very bearish.
Euro/USD
The Euro continues to trade at the bottom of it’s Bollinger Band and Williams Index in oversold territory. Yesterday, the market traded down to my 1.3140 buy level to open a long position which I am still holding and I will leave a breakeven stop on this position. If I am stopped out I will be a more aggressive buyer on any dip to 1.3090/1.3110 with a 1.3075 stop.
September DAX
Just after I posted yesterday morning the Dax had a spike down to my 8150 buy level with a 8143 low. It then had a nice rally and I was able to cover this position at 8210 and I am now flat. The Dax is trading heavily and the fact it could not trade back above the key 8260 resistance level is bearish. This morning I am a small seller from 8170/8200 with a 8235 stop. My only interest in buying the Dax is on a dip to 8085/8110 with a 8070 stop.
September FTSE
The FTSE also hit my 6470 buy order before having a nice rally and I was able to cover this position at 6500 and I am now flat. This morning I will be a seller on any break of 6440 with a 6475 stop. I do not want to be long the FTSE at this time.
December 10 Year Treasury Bond
No Change as I am still long from 123.40 with the same 122.95 stop.
Gold Rolling Contract
No change as I am still a buyer on any dip to 1370/1380 as I do not want to chase the market higher. I will also be a small seller on any rally to 1420/1430 with a 1435 stop which is just above the high made last week.
Silver Rolling Contract
Silver came very close to stopping me out yesterday with a 24.48 high. It had a nice sell-off overnight and I was able to cover my 24.20 short position at 23.80 and I am now flat. Silver continues to trade heavy relative to Gold and today I will be a small seller on any rally to 24.10/24.40 with a 24.60 stop.
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