Good Morning,
What Italian elections? What Sequester? Well thats what the Algorithm's in the American Equity market seemed to think yesterday. The S&P 500 had its biggest one day gain since early Early January, rumours of a large Buy Program at work caused the S&P and the Dow Jones 30 to take a parabolic upmove right from the Start of the American session. Yen Crosses were strong early in the day but once the Risk came back into the play in the early afternoon they started to weaken heavily and this started to weigh on the dollar strength we have seen for the last few sessions.
EUR/USD was trapped in a tight range between 1.306 and 1.3126(100 DAY MA) for the European session but once EUR/JPY took out the 121 handle on the topside it gave the Euro a boost to go higher and broke through 1.314 tripping stops on the way up. This area around the 100 day moving average has been very well protected by Euro bears for the last couple of sessions the clean break yesterday along with normal month end demand for Euro could open up some additional topside risk if the offers around 1.3150 can be taken out. Expect some more supply coming into the 1.32 handle.
Looking at the S&P 500 from a technical perspective it had bounced back incredibly well from its huge sell off on Monday, last night it tested the 1520 resistance level and was sold heavily straight away. It has now formed a 3 touch downtrend line on the 4 hour chart with 3 lower highs and 2 lower lows. Our charts are telling us that the next leg down could be to the 1480 level but from a Fundamental perspective we would be very cautious as it seems extremely bullish and any dip is being bought. Another bullish sign for the American equity market is the sell off in commodities. Large hedgefunds are liquidating their positions in metals to free up capital to invest in stocks because the return is so much better. The U.S. also seems to be in a much better place then the Eurozone. The data throughout 2013 in the States has been very impressive, showing sure signs of an improving economy with no fear that the excess liquidity in the system will be reigned in anytime soon. It remains a buy any dip strategy until an additional catalyst gives us any reason to change our mind.
Just a quick note about Gold Technicals. They look strongly like a further decline is inevitable, after Tuesdays huge buying frenzy of gold on a dovish tone from Bernanke the Bounce did not hold any momentum and the rally was capped at 1620 the 50% fibonacci retracement from the 1694 to 1555 decline. This is a good retracement from a decline but the inability to bounce through this level shows that Gold is heading lower and is back at 1600 as I type. Another bounce towards 1615-1620 would provide a high probability set up for a short position targeting 1555 and below.
Some good support levels on the EUR/USD today is 1.3100-26 and topside 1.3155 and 1.3180.
S&P 500 1425 topside resistance and 1515 and 1510 support if the market sells off this morning.
Good Luck in the Markets
Thursday, 28 February 2013
Wednesday, 27 February 2013
Breakfast Blog
Good Morning Traders,
After Mondays volatility the Market decided to take yesterday off. The EUR/USD was trapped in a range between 1.312 and 1.304, The S&P 500 ranged between 1485 and 1499, but was unable to crack 1500 and sold off into the close to finish at 1495. Bernanke's speech was worded extremely consistently with the Fed's policies and initially caused a spike lower in risk but then a monster Gold Buyer came in at 1585 and pushed it to session highs of 1620 to give gold its best daily gain since January. All in all his testimony may have been slightly more dovish then the market expected but no extreme dollar weakness was seen.
A point of note for anyone new to trading is when Bernanke is speaking the best option generally is to sell the Dollar against a foreign currency and buy Gold because he is a known dove and the markets perception is he wants to continue the Quantitative Easing Program.
This morning the Euro had a slight pop from better then expected Eurozone data and an Italian BTP auction that went well, the Euro spiked to 1.3120 but was capped by Asian Sovereign's selling into the rally and the euro whipsawed back to 1.308. Trading at 1.309 as I type. Everytime the EUR/USD has spiked over 1.31 it has been hammered back down and we believe a sell any rally strategy is the most appropriate to adopt as we await more fundamental data. Technically all the risk is on the Downside.
This afternoon we see Durable goods sales from the States and Home Sales, These are at 13 30 and 15 00 GMT respectively. Levels to look out for on the S&P 500 are 1499 topside and 1501(200 Day MA on 4 Hour chart) and 1485 on the downside. Keep stops tight as it is month end and markets can be illiquid and volatile. Trade well. Lowkey
After Mondays volatility the Market decided to take yesterday off. The EUR/USD was trapped in a range between 1.312 and 1.304, The S&P 500 ranged between 1485 and 1499, but was unable to crack 1500 and sold off into the close to finish at 1495. Bernanke's speech was worded extremely consistently with the Fed's policies and initially caused a spike lower in risk but then a monster Gold Buyer came in at 1585 and pushed it to session highs of 1620 to give gold its best daily gain since January. All in all his testimony may have been slightly more dovish then the market expected but no extreme dollar weakness was seen.
A point of note for anyone new to trading is when Bernanke is speaking the best option generally is to sell the Dollar against a foreign currency and buy Gold because he is a known dove and the markets perception is he wants to continue the Quantitative Easing Program.
This morning the Euro had a slight pop from better then expected Eurozone data and an Italian BTP auction that went well, the Euro spiked to 1.3120 but was capped by Asian Sovereign's selling into the rally and the euro whipsawed back to 1.308. Trading at 1.309 as I type. Everytime the EUR/USD has spiked over 1.31 it has been hammered back down and we believe a sell any rally strategy is the most appropriate to adopt as we await more fundamental data. Technically all the risk is on the Downside.
This afternoon we see Durable goods sales from the States and Home Sales, These are at 13 30 and 15 00 GMT respectively. Levels to look out for on the S&P 500 are 1499 topside and 1501(200 Day MA on 4 Hour chart) and 1485 on the downside. Keep stops tight as it is month end and markets can be illiquid and volatile. Trade well. Lowkey
Tuesday, 26 February 2013
Good Morning Traders....
So is this the correction that we have been looking for all year? It is probably a bit early to call in my opinion but the increase in volatility over the last few days would suggest that we are likely to see big swings in the market over the coming weeks. The massive move in the $VIX would suggest that market participants level of fear has increased significantly over the few days all off the back of the Italian election disaster. As a trader one must always be aware of the level of complacency that can enter the global markets especially when all asset classes are making new highs and the backbone fundamentals remain weak, because there is always a chance that the mood can turn 'Sour' in a few minutes.
All eyes will be on Italy again today as EU leaders continue to pile pressure on Italy's parties to form a unity government, Moody's also released a statement saying that Italy's credit rating was at risk and we also saw market chatter yesterday of a 'Short Selling' ban on the Italian stock market as some of the countries big banks have come under extensive pressure since the election saga began to unfold. Traders and investors will be keeping a look our for the Italian bond auction that takes place at 10am in which Italy hopes to sell 4bn worth of 10 year bonds. (Good Luck with that).
Again we have important news from Germany and the EU as consumer confidence data will be released which is expected to show another rise for the second time this year. Across the pond we will be seeing Mr Bernanke testify to the House Financial Services Committee, this will more than likely dominate the US session and he is looking to come under more pressure then he did yesterday as he continues to defend his asset purchase decisions.
In terms of the FX market and other asset classes futures markets would suggest a move higher this morning, but I would take this only as an early indication and not a headlining indicator, mood can change very quick and there is a busy schedule on the cards today. Some of the markets look relatively cheap at the moment but with such uncertainty, I would be keeping my eye on the $VIX and shorting and rallies unless we see a significant move to the upside and previous levels of support can enter the frame again.
Happy Trading
@LowKeyCapital
So is this the correction that we have been looking for all year? It is probably a bit early to call in my opinion but the increase in volatility over the last few days would suggest that we are likely to see big swings in the market over the coming weeks. The massive move in the $VIX would suggest that market participants level of fear has increased significantly over the few days all off the back of the Italian election disaster. As a trader one must always be aware of the level of complacency that can enter the global markets especially when all asset classes are making new highs and the backbone fundamentals remain weak, because there is always a chance that the mood can turn 'Sour' in a few minutes.
All eyes will be on Italy again today as EU leaders continue to pile pressure on Italy's parties to form a unity government, Moody's also released a statement saying that Italy's credit rating was at risk and we also saw market chatter yesterday of a 'Short Selling' ban on the Italian stock market as some of the countries big banks have come under extensive pressure since the election saga began to unfold. Traders and investors will be keeping a look our for the Italian bond auction that takes place at 10am in which Italy hopes to sell 4bn worth of 10 year bonds. (Good Luck with that).
Again we have important news from Germany and the EU as consumer confidence data will be released which is expected to show another rise for the second time this year. Across the pond we will be seeing Mr Bernanke testify to the House Financial Services Committee, this will more than likely dominate the US session and he is looking to come under more pressure then he did yesterday as he continues to defend his asset purchase decisions.
In terms of the FX market and other asset classes futures markets would suggest a move higher this morning, but I would take this only as an early indication and not a headlining indicator, mood can change very quick and there is a busy schedule on the cards today. Some of the markets look relatively cheap at the moment but with such uncertainty, I would be keeping my eye on the $VIX and shorting and rallies unless we see a significant move to the upside and previous levels of support can enter the frame again.
Happy Trading
@LowKeyCapital
Breakfast Blog
Top of the Risk Management Morning Traders,
Yesterday was one of the most incredibly volatile days you can ever experience in the Stock Market. It had just about everything. The morning started with a massive Euro, Equity and risk rally from early indications that Bersani was going to be able to form a government. By the time the American market had opened we had the Dow Jones at 14,079, The S&P at 1426 and the DAX at 7861 and the EUR/USD at 1.332. Six and a half hours later a very different story was becoming evident when the Euro crashed through 1.31, S&P had lost 400 points and EUR/JPY lost 200 pips in 6 minutes when a large hedgefund started unwinding Yen short positions. The trigger for all this uncertainty was Silvio Burlesconi's apparent rise from the Dead as exit polls started to indicate during the afternoon that he was infact in the lead. The equity bourses declined steadily along with the Euro until 8 o'clock when they went into sell off mode. This combined with the Yen strength we saw into the close provided one of the most exciting Monday evenings we have ever seen and showed how in less then a week all complaincy has been drained from the market, With the VIX breaking 17 on the Topside.
This morning has seen a small bounce in risk with the S&P back at 1495, Dax up and EUR/USD retesting 1.31. The Market will be very much clued into Ben Bernanke's speech at 15 00 GMT, Where we will be looking to see whether he gives any indications of exit strategies for the Quantitative easing program or tapering bond buying. New home sales data is also at 15 00 GMT.
Some good bid levels for the EUR/USD are seen just above the 1.30 handle and orders can be seen starting at 1.31 topside.
A good technical indicator we have noticed in the last few weeks is the 200 Day moving average on the 4 hour chart of the S&P 500. Everytime it has been hit it has bounced a few points. It did break through it last night but we can guarantee if the market come to test it again today the first touch will with out doubt be sold. It comes in at around 1501 on our charts.
Good luck in the Markets
Lowkey
Yesterday was one of the most incredibly volatile days you can ever experience in the Stock Market. It had just about everything. The morning started with a massive Euro, Equity and risk rally from early indications that Bersani was going to be able to form a government. By the time the American market had opened we had the Dow Jones at 14,079, The S&P at 1426 and the DAX at 7861 and the EUR/USD at 1.332. Six and a half hours later a very different story was becoming evident when the Euro crashed through 1.31, S&P had lost 400 points and EUR/JPY lost 200 pips in 6 minutes when a large hedgefund started unwinding Yen short positions. The trigger for all this uncertainty was Silvio Burlesconi's apparent rise from the Dead as exit polls started to indicate during the afternoon that he was infact in the lead. The equity bourses declined steadily along with the Euro until 8 o'clock when they went into sell off mode. This combined with the Yen strength we saw into the close provided one of the most exciting Monday evenings we have ever seen and showed how in less then a week all complaincy has been drained from the market, With the VIX breaking 17 on the Topside.
This morning has seen a small bounce in risk with the S&P back at 1495, Dax up and EUR/USD retesting 1.31. The Market will be very much clued into Ben Bernanke's speech at 15 00 GMT, Where we will be looking to see whether he gives any indications of exit strategies for the Quantitative easing program or tapering bond buying. New home sales data is also at 15 00 GMT.
Some good bid levels for the EUR/USD are seen just above the 1.30 handle and orders can be seen starting at 1.31 topside.
A good technical indicator we have noticed in the last few weeks is the 200 Day moving average on the 4 hour chart of the S&P 500. Everytime it has been hit it has bounced a few points. It did break through it last night but we can guarantee if the market come to test it again today the first touch will with out doubt be sold. It comes in at around 1501 on our charts.
Good luck in the Markets
Lowkey
Monday, 25 February 2013
Good Morning Traders.
Equity markets
recovered their poise on Friday, gains in Europe were inspired by a stronger than forecast German IFO survey this mood continued into the US session, making up for the relatively short lived pull back we saw earlier on in the week. Real money interest in
‘buying the dip’ from earlier in the week was the primary flow in US markets.
Today there is relatively little limited interest on the economic calender so all eyes will be focused on the Italian election results expected after 3pm Italian time. This should play out as Euro positive as long as we don't see a surprise when results are released. Prior to the election results we will be trading off the back of the surprise Moody’s
downgrade to the UK’s credit rating, one notch to AA1 from AA after stocks
closed on Friday. GBP lost a cent in the last half hour of NY trade to trade at its
lowest since mid-July 2010. It is lower again at the re-open.
With a lack of important news-flow this afternoon expect to see the US continue its move to the upside and make up for some lost ground last week. As a trader keep an eye on any news on the Fiscal Cliff and any information from voting members as these can prove to be strong market drivers around this time of the year.
Over all trading with more then likely remain choppy and relatively sidewards until we get confirmation from Italy.
Happy Trading
@lowKeyCapital
Friday, 22 February 2013
Breakfast Blog
Good Morning traders, Wednesday nights stocks, commodities and risk in general's sell off continued most of the day yesterday with the Euro getting smashed down to 1.3160 following the poor PMI data from France, Germany and the Eurozone in general. The Euro currency has been getting killed all week against all its pairs and has lost more then 300 pips in the EUR/USD. This has also seen the dollar have its biggest rally in 7 months. The S&P 500 breached the 1500 level yesterday afternoon but found support at 1496 where it rallied back to 1503, so the bulls are still in control for the moment. One of our favorite indicators for price action on the S&P 500 is Copper and the last 2 weeks have seen copper selling off heavily and yesterday it breached important support at 360. This is a definite sign that there will be a correction in the stock market soon as Copper generally does what S&P 500 will do 2 weeks to 2 months before S&P.
The Volatility index also broke out above 15 for the first time since Christmas, this is a sure sign that the complacency we have had in the last 2 months is coming to an end.
On a currency perspective the EUR/USD is slightly better bid this morning up above the 1.32 handle but struggling to test higher. The market doesn't seem to want to be long Euro going into the weekend and the Italian Elections on Sunday and Monday. If Silvio Burlesconi wins and is re-elected expect to see the EUR/USD re-testing the 1.30 handle sometime next week and a significant sell-off in the European equity bourses.
Some good levels to look out for today are 1.3170 EUR/USD, some solid technical support here along with some large sovereign names on the right hand side of the order book. Topside we have seen selling this morning at 1.3250 after the Good German data, a reported Scandinavian name on offer up here. The ECB announces its LTRO repayments at 11 a.m. this morning and a large number will give a boost to the Euro short term, but any rally may be capped by the uncertainty of the elections over the weekend.
On an Equity perspective 1496 looks rock solid on the S&P 500 and 1515 will be hard to break on the topside. The market is very choppy and still ranging so avoid trading in the middle of the range, wait for a significant level and keep stops tight.
Good luck in the Markets
Lowkey
The Volatility index also broke out above 15 for the first time since Christmas, this is a sure sign that the complacency we have had in the last 2 months is coming to an end.
On a currency perspective the EUR/USD is slightly better bid this morning up above the 1.32 handle but struggling to test higher. The market doesn't seem to want to be long Euro going into the weekend and the Italian Elections on Sunday and Monday. If Silvio Burlesconi wins and is re-elected expect to see the EUR/USD re-testing the 1.30 handle sometime next week and a significant sell-off in the European equity bourses.
Some good levels to look out for today are 1.3170 EUR/USD, some solid technical support here along with some large sovereign names on the right hand side of the order book. Topside we have seen selling this morning at 1.3250 after the Good German data, a reported Scandinavian name on offer up here. The ECB announces its LTRO repayments at 11 a.m. this morning and a large number will give a boost to the Euro short term, but any rally may be capped by the uncertainty of the elections over the weekend.
On an Equity perspective 1496 looks rock solid on the S&P 500 and 1515 will be hard to break on the topside. The market is very choppy and still ranging so avoid trading in the middle of the range, wait for a significant level and keep stops tight.
Good luck in the Markets
Lowkey
Thursday, 21 February 2013
Good Morning Traders.....
So have we arrived at the correction point that we have been speculating about for the past few weeks? Is the new year rally coming to an abrupt end? The markets traded relatively quiet during the European session yesterday the markets were range bound making a slight leg lower to the downside as worries about the outcome of the Italian election began to emerge and concern across the Eurozone increased. The bg news that triggered the correction and late sell off we witnessed last night was sparked off the back of the FOCM minutes that showed the FED may consider slowing the pace of asset purchases, this brought USD strength to the market place and see saw a significant sell off in the $EURUSD pair along with commodities and US equities.
We had been warning traders to be weary that a correction was not far away and that it would be sparked very quickly. Yesterdays news and the correction has been aided by poor PMI data out of the Eurozone and all markets are in the red off the back of this. The notable move this morning has been the move in the $VIX its largest move since November 9th 2011 up almost 19%.
Happy Trading
So have we arrived at the correction point that we have been speculating about for the past few weeks? Is the new year rally coming to an abrupt end? The markets traded relatively quiet during the European session yesterday the markets were range bound making a slight leg lower to the downside as worries about the outcome of the Italian election began to emerge and concern across the Eurozone increased. The bg news that triggered the correction and late sell off we witnessed last night was sparked off the back of the FOCM minutes that showed the FED may consider slowing the pace of asset purchases, this brought USD strength to the market place and see saw a significant sell off in the $EURUSD pair along with commodities and US equities.
We had been warning traders to be weary that a correction was not far away and that it would be sparked very quickly. Yesterdays news and the correction has been aided by poor PMI data out of the Eurozone and all markets are in the red off the back of this. The notable move this morning has been the move in the $VIX its largest move since November 9th 2011 up almost 19%.
Happy Trading
Wednesday, 20 February 2013
Breakfast Blog
Top of the risk management morning! The Americans certainly made up for lost time when they re-entered the market yesterday after their market holiday on monday! The S&P 500 rallied through resistance at 1525 to close at 1530 and a new YTD high! This market just wants to go higher and higher and the all time highs of 1576 are firmly in its near term outlook. Goldman Sachs even stated that their was no basis for yesterdays rally citing "no bullish data". So we must adopt the mentality that no news is good news! The only two macro events that may cause a correction are the upcoming fiscal cliff debates and the Italian Elections, but the market seems to be ignoring both them at present.
The Euro is very well bid this morning in all of its major pairs, breaking above 0.87 in EUR/GBP over night and taking out the 1.34 handle in Asian trade and posting a high at 1.344. The EUR/USD made a base for itself to go higher over the last few sessions as it couldn't go below 1.33. Generally if the price action can not go any lower it will change direction and retrace in the direction it came from. This can be seem clearly in this pair. Something to watch out for in this pair is the FOMC minutes at 19 00 tonight. Look for any hawkish comments about curtailing QE before the year end. This is highly unlikely however but these minutes have proved to throw the market an unexpected curve ball on occcasions. There is some other tier 2 data from the States at 13 30 but in general the economic calendar is sparse of any major data releases this week.
Some strong offers are seen at 1.3475-90 in the EUR/USD and bids down at 1.335-70.
The FTSE has approached any area of strong resistance today in the 6375-6400 region, there had been no resistance from 6100 and it was inevitably going to get sucked up here. It also seems to be enjoying the weaker Sterling currency and the prospects of more QE when Mark Carney the new Governor of the Bank of England arrives in June. It is overbought like all the equity markets but will need a catalyst to correct.
Another quick note about Google breaking the $800 mark yesterday for the first time. What a remarkable company and this has helped the S&P 500 drive higher aswell. I hope that Google don't do an Apple on it, but I suspect not given the unique culture and fundamentals of this market leader.
Good Luck in the Markets. Lowkey
The Euro is very well bid this morning in all of its major pairs, breaking above 0.87 in EUR/GBP over night and taking out the 1.34 handle in Asian trade and posting a high at 1.344. The EUR/USD made a base for itself to go higher over the last few sessions as it couldn't go below 1.33. Generally if the price action can not go any lower it will change direction and retrace in the direction it came from. This can be seem clearly in this pair. Something to watch out for in this pair is the FOMC minutes at 19 00 tonight. Look for any hawkish comments about curtailing QE before the year end. This is highly unlikely however but these minutes have proved to throw the market an unexpected curve ball on occcasions. There is some other tier 2 data from the States at 13 30 but in general the economic calendar is sparse of any major data releases this week.
Some strong offers are seen at 1.3475-90 in the EUR/USD and bids down at 1.335-70.
The FTSE has approached any area of strong resistance today in the 6375-6400 region, there had been no resistance from 6100 and it was inevitably going to get sucked up here. It also seems to be enjoying the weaker Sterling currency and the prospects of more QE when Mark Carney the new Governor of the Bank of England arrives in June. It is overbought like all the equity markets but will need a catalyst to correct.
Another quick note about Google breaking the $800 mark yesterday for the first time. What a remarkable company and this has helped the S&P 500 drive higher aswell. I hope that Google don't do an Apple on it, but I suspect not given the unique culture and fundamentals of this market leader.
Good Luck in the Markets. Lowkey
Tuesday, 19 February 2013
Breakfast Blog
Good morning traders! Yesterday was an extremely quiet day on the markets with very thin liquidity and low volume trading for the duration of the day because of the market holiday in the States. The EUR/USD was stuck in a range all day and it looks to be the same story again unless we get a major catalyst. The market seems to be in wait and see mode ahead of Thursdays PMI's from the eurozone and the upcoming Italian political elections. The only bit of news this morning is the German ZEW economic sentiment from Germany, which we feel may be good as the DAX is already up 40 points this morning! This number is out at 10 and will give the EURO a boost aswell.
Looking at the American indices, the S&P 500 looks like it is going to open fairly unchanged from Fridays 1519 close. The market still looks very over extended but can keep going higher until some significant news causes it to correct. This still remains a buy-the-dips strategy. The 1515 level which was previous resistance and new support since the breakout two weeks ago looks a solid buy, any dip to here has been snapped up.
Another thing that we have become interested in given their recent decline our gold and silver. Gold is iddling around the 1600 mark and looks a solid buy with a stop loss somewhere near 1565, looking for an exit position of 1790+, This could be a nearly 200 point trade. The decline has resulted from a number of hedgefunds unwinding long positions and from some soft technicals. January and February are also notoriously bad seasons for Gold. Silver does not seem to want to go below 30 dollars and a target point of 35 dollars would be a good target. In this QE-Infinity world you have to believe that the fundamentals back up these metals making new highs as liquidity is being pumped into the global economic system so hard that they are the best hedge against inflation around.
Good luck in the markets!! Lowkey
Looking at the American indices, the S&P 500 looks like it is going to open fairly unchanged from Fridays 1519 close. The market still looks very over extended but can keep going higher until some significant news causes it to correct. This still remains a buy-the-dips strategy. The 1515 level which was previous resistance and new support since the breakout two weeks ago looks a solid buy, any dip to here has been snapped up.
Another thing that we have become interested in given their recent decline our gold and silver. Gold is iddling around the 1600 mark and looks a solid buy with a stop loss somewhere near 1565, looking for an exit position of 1790+, This could be a nearly 200 point trade. The decline has resulted from a number of hedgefunds unwinding long positions and from some soft technicals. January and February are also notoriously bad seasons for Gold. Silver does not seem to want to go below 30 dollars and a target point of 35 dollars would be a good target. In this QE-Infinity world you have to believe that the fundamentals back up these metals making new highs as liquidity is being pumped into the global economic system so hard that they are the best hedge against inflation around.
Good luck in the markets!! Lowkey
Thursday, 14 February 2013
BreakFast Blog
Overnight we have seen Asian equities take a move higher after the BOJ maintained its asset purchasing program amid speculations that Minister Shinzo Abe might ease on efforts to end deflation. However on the back of last nights meeting we are likely to see the BOJ committing to continue open- ended asset purchases until the end of next year to stimulate the economy.
All eyes this morning focus on GDP data from France, Germany and the Eurozone. French and German data were released at 7am this morning and neither managed to excite the markets with both figures coming in below expectations and dragging the major European indicies lower after the open.
In the equity market yesterday we saw an unusual change of trend, as the US sold the major indicies from the opening bell, with the $DOW closing below that psychological 14000 level. The $SPX also traded in the same fashion but failed to test the 1515 level which has been touted by traders as the new upward support for $SPX. Traders seem to be looking at the 1525-1530 level as the level we might see a possible correction stem from, and we would favour a correction back to the 1450 level before making a move higher. It is also important to note as traders that we have the G7 meeting taking place and the market has been polluted by random headlines which have caused dramatic swings and created a choppy trading environment, stick to the fundamentals and your trading plan do not get caught up in these big swings as they have proved to be short lived and without any substance on a many occasions.
We will be waiting on the sidelines now to see the Italian and Eurozone GDP numbers due out at 9am and 10am respectively.
Happy Trading
@lowkeycapital
All eyes this morning focus on GDP data from France, Germany and the Eurozone. French and German data were released at 7am this morning and neither managed to excite the markets with both figures coming in below expectations and dragging the major European indicies lower after the open.
In the equity market yesterday we saw an unusual change of trend, as the US sold the major indicies from the opening bell, with the $DOW closing below that psychological 14000 level. The $SPX also traded in the same fashion but failed to test the 1515 level which has been touted by traders as the new upward support for $SPX. Traders seem to be looking at the 1525-1530 level as the level we might see a possible correction stem from, and we would favour a correction back to the 1450 level before making a move higher. It is also important to note as traders that we have the G7 meeting taking place and the market has been polluted by random headlines which have caused dramatic swings and created a choppy trading environment, stick to the fundamentals and your trading plan do not get caught up in these big swings as they have proved to be short lived and without any substance on a many occasions.
We will be waiting on the sidelines now to see the Italian and Eurozone GDP numbers due out at 9am and 10am respectively.
Happy Trading
@lowkeycapital
Wednesday, 13 February 2013
Breakfast Blog
Good Morning Traders, Top of the Risk Management Morning!
Its G7 summit time and the market was typically whippy with rumours and misquotations from politicians. During the European financial crisis in 2011 there was a summit nearly every month and this saw the same volatile price action, this combined with thin markets and its a recipe to get stopped out very quickly. The secret in these markets is too keep a cool head and not to let your emotions take over! A misquotation in regards to the strength of the Yen yesterday caused USD/JPY to lose a full point in about 45 seconds.
Yesterday saw all the European bourses make good gains, driving higher from lower peripheral yields and a general risk on vibe across all asset classes, the financials being the noteable out performer for a second day in a row.
Across the pond, the S&P 500 put in another huge close at 1519, Every dip on the contract is a great buy as it just keeps going higher. 1530 looks a good short term target and at this rate we could even make new all time highs before we get some bad news to lead to some kind of correction. Core retail sales are out today at 1 30 and a good figure here could spur the index higher again.
On the currency side the EUR/USD is up this morning and as i type is testing touted offers in the 1.3480 region. If it clears these look for a lot of sellers at the 1.35 handle. The month on Month Eurozone Industrial output is out at 10 a.m. and a good figure here may give the Euro the boost it needs to take out the 1.35 figure.
A good level to buy at for the S&P 500 is around the 1515 mark, this was important previous resistance and looks to be solid support now and a test on it yesterday just as the market opened yesterday was bought straight away.
Good luck in the Markets
Its G7 summit time and the market was typically whippy with rumours and misquotations from politicians. During the European financial crisis in 2011 there was a summit nearly every month and this saw the same volatile price action, this combined with thin markets and its a recipe to get stopped out very quickly. The secret in these markets is too keep a cool head and not to let your emotions take over! A misquotation in regards to the strength of the Yen yesterday caused USD/JPY to lose a full point in about 45 seconds.
Yesterday saw all the European bourses make good gains, driving higher from lower peripheral yields and a general risk on vibe across all asset classes, the financials being the noteable out performer for a second day in a row.
Across the pond, the S&P 500 put in another huge close at 1519, Every dip on the contract is a great buy as it just keeps going higher. 1530 looks a good short term target and at this rate we could even make new all time highs before we get some bad news to lead to some kind of correction. Core retail sales are out today at 1 30 and a good figure here could spur the index higher again.
On the currency side the EUR/USD is up this morning and as i type is testing touted offers in the 1.3480 region. If it clears these look for a lot of sellers at the 1.35 handle. The month on Month Eurozone Industrial output is out at 10 a.m. and a good figure here may give the Euro the boost it needs to take out the 1.35 figure.
A good level to buy at for the S&P 500 is around the 1515 mark, this was important previous resistance and looks to be solid support now and a test on it yesterday just as the market opened yesterday was bought straight away.
Good luck in the Markets
Monday, 11 February 2013
BreakFast Blog
Good Morning Traders......
An unusual light overnight session with most of the Asian markets closed for the Lunar New Year, this has left US equity futures relatively unchanged over the weekend. From a trading perspective things have been repetitive over the last few weeks and the ongoing trend seems to be a European sell off during the morning session followed up by the US market participants 'Buying The Dips' in the afternoon session. This has left the markets stuck in a narrow range with the $SPX stuck between 1500-1515. However last week we did see a break of the 1500 resistance level but what we are looking for as traders is a close below this level that might signal a correction could be taking place, until then however we shall keep or trading strategy of buying the dips in tact. In terms of news we are expecting no headline data across the newswires, and the milestone this week will come on Friday as ministers from the 17 member Euro area meet to discuss aid packages for Cyprus and Greece, they may also cast some views and opinion on the tightening election contest in Italy and the political scandal in Spain that has recently come to light.
Happy Trading
@lowkeycapital
An unusual light overnight session with most of the Asian markets closed for the Lunar New Year, this has left US equity futures relatively unchanged over the weekend. From a trading perspective things have been repetitive over the last few weeks and the ongoing trend seems to be a European sell off during the morning session followed up by the US market participants 'Buying The Dips' in the afternoon session. This has left the markets stuck in a narrow range with the $SPX stuck between 1500-1515. However last week we did see a break of the 1500 resistance level but what we are looking for as traders is a close below this level that might signal a correction could be taking place, until then however we shall keep or trading strategy of buying the dips in tact. In terms of news we are expecting no headline data across the newswires, and the milestone this week will come on Friday as ministers from the 17 member Euro area meet to discuss aid packages for Cyprus and Greece, they may also cast some views and opinion on the tightening election contest in Italy and the political scandal in Spain that has recently come to light.
Happy Trading
@lowkeycapital
Friday, 8 February 2013
Breakfast Blog
Morning Traders! What a volatile day we had yesterday across all equity indices and currency pairs! Once the ECB decided to leave rates unchanged we saw a small pop to 1.3575 in the EUR/USD then almost immediately it started to weaken, once Mario Draghi started to talk a complete EURO sell off began, with the euro loosing 200 pips to 1.3375. Draghi didn't even give any hints of a rate cut but it appeared the market had been overly long the Euro and it may have been an excuse to take some profit and take the overbought out of the market. The Euro has been very quiet since this sell off and trades at the 1.34 handle.
This sell off was not a shock, there had been warning signs for the last couple of days with political turmoil in Spain and Italy combined with rising bond yields.
The American equity market looked strong in the morning but topped out at that 1515 for the third time, this is becoming a huge resistance barrier which the market cannot overcome. The market is tired, is running off low volume, and has been making volatile up and down moves for the past week. This is generally the sign of a top however when the S&P 500 started selling off from the market open yesterday it was not able to lose the important 1498 level, it stalled here twice then bounced back to 1509, where it trades now in premarket activity. It is essentially stuck in a range and needs a catalyst to move higher or lower. We would not advise buying this market.
An indicator we look at to determine equity positioning is Yen strength, the weaking Yen has been fueling the American equity market. The USD/JPY pair have stalled at the 94 handle and has made a Doji shaped candle on the daily charts for the last 2 sessions, it is also extremely oversold and has weakened a lot over night to break through the 93 handle on the downside. We would not recommend shorting this pair because when a currency pair is in such a parabolic uptrend you either go long the dips or sit on the sidelines. A strengthening yen will help to cause a correction in stocks. February and March is a typical time of the year to correct after the great run we have had in January.
Levels to look out for on the S&P 500 are 1498 downside and 1515 topside. 1505 could also be seen as some support on the downside.
Best of luck in the Markets! Lowkey
This sell off was not a shock, there had been warning signs for the last couple of days with political turmoil in Spain and Italy combined with rising bond yields.
The American equity market looked strong in the morning but topped out at that 1515 for the third time, this is becoming a huge resistance barrier which the market cannot overcome. The market is tired, is running off low volume, and has been making volatile up and down moves for the past week. This is generally the sign of a top however when the S&P 500 started selling off from the market open yesterday it was not able to lose the important 1498 level, it stalled here twice then bounced back to 1509, where it trades now in premarket activity. It is essentially stuck in a range and needs a catalyst to move higher or lower. We would not advise buying this market.
An indicator we look at to determine equity positioning is Yen strength, the weaking Yen has been fueling the American equity market. The USD/JPY pair have stalled at the 94 handle and has made a Doji shaped candle on the daily charts for the last 2 sessions, it is also extremely oversold and has weakened a lot over night to break through the 93 handle on the downside. We would not recommend shorting this pair because when a currency pair is in such a parabolic uptrend you either go long the dips or sit on the sidelines. A strengthening yen will help to cause a correction in stocks. February and March is a typical time of the year to correct after the great run we have had in January.
Levels to look out for on the S&P 500 are 1498 downside and 1515 topside. 1505 could also be seen as some support on the downside.
Best of luck in the Markets! Lowkey
Thursday, 7 February 2013
Decision Day
Good morning Traders......
So today is the day we have been gearing up to all week, the ECB meet to discuss a possible interest rate cut and Draghi will host a press briefing to discuss the well-being of the Eurozone, these days can bring an element of uncertainty and volatility into the market place so it is advised to trade with caution during the morning session.
Yesterday we saw another sell off in the European session, followed by a bounce in the US session however we still remain confined within our interm trading range ($SPX 1498-1515). These levels have been very well protected and as long as the $SPX can remain above the 1500 level we are very much continuing the short term bull trend. As a trader it has to be noted that a correction is not far away and it would prove healthy for equities to retrace from the highs and allow technical indicators to neutralise before moving higher on the back of a resolved Fiscal Cliff deal.
So what should we be looking our for in the markets this morning?
The ECB is widely expected to leave its key lending rate unchanged at its historic low rate of 0.75%, on the back of this expectation we have seen Gold move higher during the Asian trading session. IT is interesting to note that if Mario expresses no resistance to further $EUR gains after the policy meeting, markets may bring the $EURUSD pair higher. In early market trading we have seen a significant move to the upside in the pair and I think we will remain range bound until the announcement later this afternoon.
Traders will also be keeping a close eye on Draghi's view on the euros strength against its pairs, and its potential affect on the recovery process and this could prove to be more important then the decision itself in trading this afternoon, with clarity brings direction.
Happy Trading
@lowkeycapital
So today is the day we have been gearing up to all week, the ECB meet to discuss a possible interest rate cut and Draghi will host a press briefing to discuss the well-being of the Eurozone, these days can bring an element of uncertainty and volatility into the market place so it is advised to trade with caution during the morning session.
Yesterday we saw another sell off in the European session, followed by a bounce in the US session however we still remain confined within our interm trading range ($SPX 1498-1515). These levels have been very well protected and as long as the $SPX can remain above the 1500 level we are very much continuing the short term bull trend. As a trader it has to be noted that a correction is not far away and it would prove healthy for equities to retrace from the highs and allow technical indicators to neutralise before moving higher on the back of a resolved Fiscal Cliff deal.
So what should we be looking our for in the markets this morning?
The ECB is widely expected to leave its key lending rate unchanged at its historic low rate of 0.75%, on the back of this expectation we have seen Gold move higher during the Asian trading session. IT is interesting to note that if Mario expresses no resistance to further $EUR gains after the policy meeting, markets may bring the $EURUSD pair higher. In early market trading we have seen a significant move to the upside in the pair and I think we will remain range bound until the announcement later this afternoon.
Traders will also be keeping a close eye on Draghi's view on the euros strength against its pairs, and its potential affect on the recovery process and this could prove to be more important then the decision itself in trading this afternoon, with clarity brings direction.
Happy Trading
@lowkeycapital
Wednesday, 6 February 2013
Breakfast Blog
Good Morning Traders, Yesterday saw a Short Squeeze in The U.S Equity Markets. A short squeeze occurs when traders start to buy back their short positions, this is also called short covering. This combined with market participants buying stocks from the good ISM Non-Manufacturing news caused the price to shoot up dramatically and we got back to the 1515 level on the S&P 500 where we had topped out on Friday evening. This 1515 level seems to be a string resistance point for the market and we may need an additional catalyst to drive through here and target 1530 which would be the next target point. After 1530, the market will be only 2% from the 2007 all time highs of 1556.5. As I type the cash market is at 1512 in Pre-market trading.
From a currency perspective the EUR/USD pair had an up and down day yesterday, selling off in the overnight Asian to a low of 1.346 before finding a bid. When the European Markets opened the Euro went for a 90 pip run to 1.3550 boosted by some positive European data. When the Americans entered the market the EUR/USD dropped to nearly 1.35 flat and then launched to session highs of 1.3598 spurred by rumours that The ECB had decided that the Euro was still not strong enough to warrant a rate cut or any fiscal action to limit the rapid appreciation of the single currency.
Today is very quiet on the Data calendar with all eyes watching and waiting for the ECB's interest rate decision and press conference. Level's to look out for on the EUR/USD are 1.350-15 will have a lot of buying interest, which has limited the downside this morning, on the topside 1.358-1.36 will have strong offers. Good luck in the Markets!
Lowkey
From a currency perspective the EUR/USD pair had an up and down day yesterday, selling off in the overnight Asian to a low of 1.346 before finding a bid. When the European Markets opened the Euro went for a 90 pip run to 1.3550 boosted by some positive European data. When the Americans entered the market the EUR/USD dropped to nearly 1.35 flat and then launched to session highs of 1.3598 spurred by rumours that The ECB had decided that the Euro was still not strong enough to warrant a rate cut or any fiscal action to limit the rapid appreciation of the single currency.
Today is very quiet on the Data calendar with all eyes watching and waiting for the ECB's interest rate decision and press conference. Level's to look out for on the EUR/USD are 1.350-15 will have a lot of buying interest, which has limited the downside this morning, on the topside 1.358-1.36 will have strong offers. Good luck in the Markets!
Lowkey
Tuesday, 5 February 2013
Breakfast Reading
Good Morning Traders....
So could this be the correction that the market was looking for? Yesterday saw a sharp sell off in most of the global indicies, this morning we have seen a slight bounce from the opening bell but yesterdays move to the downside has to be accounted for and brings with it an element of 'Risk Off' to the marketplace. The move is my opinion was necessary and has been coming due on the back of the significant move to the upside seen since the start of January. It is interesting to note that we are beginning to hear bad news and a negative outlook for European growth re-enter the frame. all of which had been parked away while the January rally was taking place, and traders were making up for lost ground last year.
As previously mentioned in our blogs there are some technical levels that must hold on $SPX for confirmation that up are still in an up trend in the short term, these levels are 1498 and 1496 both should prove as a significant support and resistance. What we have to watch out for as traders is how deep this correction may be, if it is well behaved we should see 1450-1465 and then a move higher but if these levels are breached things may not look so pretty so we will wait and see.
So could this be the correction that the market was looking for? Yesterday saw a sharp sell off in most of the global indicies, this morning we have seen a slight bounce from the opening bell but yesterdays move to the downside has to be accounted for and brings with it an element of 'Risk Off' to the marketplace. The move is my opinion was necessary and has been coming due on the back of the significant move to the upside seen since the start of January. It is interesting to note that we are beginning to hear bad news and a negative outlook for European growth re-enter the frame. all of which had been parked away while the January rally was taking place, and traders were making up for lost ground last year.
As previously mentioned in our blogs there are some technical levels that must hold on $SPX for confirmation that up are still in an up trend in the short term, these levels are 1498 and 1496 both should prove as a significant support and resistance. What we have to watch out for as traders is how deep this correction may be, if it is well behaved we should see 1450-1465 and then a move higher but if these levels are breached things may not look so pretty so we will wait and see.
Friday, 1 February 2013
NFP
Good Afternoon Traders we are bringing our blog to you later today as we wanted to wait and see the morning market reaction on could promise to be the most decisive trading day of 2013 so far. The headline on the cards to day is the Non Foreign Payrolls (NFP) due out at 1.30 pm this afternoon and the market will waiting to see how the numbers play out. Market participants are expecting to see a figure of 166k, but in reality we will need to see a figure above 175k or below 150k to see significant market reaction.
Traders should also note that today is Friday and we see the market stall at important resistance levels we could see some big market players taking some money off the table, and witness a slight sell off into the European and US close.
Traders should also note that today is Friday and we see the market stall at important resistance levels we could see some big market players taking some money off the table, and witness a slight sell off into the European and US close.
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