Good Morning Traders
Where to begin? This week has been the polar to last week, trading conditions have really improved and the increased volatility brought about by developments in Cyprus have given large range moves ideal for traders. All eyes will be on the eurogroup head Dijs-Selbloem as he updates Cypriate lawmakers at 8am. Lenders in Cyprus will remain closed until March 26 in an effort to prevent a bank run and to give a few extra days to try and come to some form of agreement. Following on from this we will more than likely see the ECB delay its decision on whether to continue supplying emergency funds to the troubled region. As we touched on during the week, we do not believe that the ECB will consider adopting this aggressive strategy with Cyprus and we think a deal will be reached to satisfy both parties. Although Cyprus is taking up all the headlines, there will be some movement in Italy as leaders of Italy's Five Star Movement will meet Giorgio Napolitano today as the president seeks to find a government.
Across the water yesterday, we saw US stocks take another leg to the upside after the Federal Reserve wrapped up its monthly policy meeting with continued assurance that it would continue to support the US economy through its QE programme until 6.5% unemployment is reached. This will put an end to all of the speculative 'End of QE' sell-offs that we have seen off the back of good data out of the US, and all positive data should be seen as a genuine buying opportunity going forward. Investors have rediscovered their appetite for riskier assets as concerns about the situation in Cyprus are now being overlooked and focus has now been directed back to the improving US economy. If we take the turmoil in the EU out of the situation and treat it as a speed bump in the move higher the global economy is in fact improving and growth has begun to stabilise highlighted by the improvement in Chinese manufacturing which beat analysts expectations overnight.
In terms of today's trading, the morning session is likely to be dominated by the eurozone PMI data, and this should give short term direction. We are likely to see the US session make another leg to the upside, and that  all time high on the SPX is now in sight, and we wouldn't be surprised to see it taken out over the coming week. When we see this level breached I think then we will be in a position to start looking for the correction, to take the overbought signals out of the market. At present the VIX (Volatility Index) is trading around its all time low levels suggesting that fear levels amongst traders are at an all time low.

Happy Trading
@lowkeyCapital