Morning Update

Good Morning Traders...
So we look to be stalled at the top for the time being, we have seen a significant change in sentiment across the equity markets and we don't seem to have the same degree of buying in the market as we have had over the last few weeks. We have been trading in a tight sideways range this week and and yesterdays trading session was almost identical to Mondays trading day where we saw a slight pull back only to be bought up, but yet again there seems to be a top in place for the short term. The $SPX looks to have made a top at the 1557 level while the $DOW continues to grind slightly higher into new highs we have seen a top at 14479. In  the European session, it looked as though things were shaping up for a correction, and there was talk across the social media sites that yesterday might have been the day where we saw so money taken off the table as uncertainty crept into the market. This was largely based on a few factors, we saw a significant move in Gold  which now trades above the 1592 handle, copper continued to fall and the divergence between $SPX and Copper is now quite significant on all time frames (Copper is the leading indicator for $SPX and it has corrected 10% in February ) and finally we saw some Yen strength in the market. However after a slight move to the downside in the afternoon session we saw that the dip was yet again bought up. I would like to draw people attention to the strength and the volume behind these short lived rallies, they lack momentum and this would suggest to me that these dips are being bought by retail investors which to most is an obvious sign that the 'Top' is near. As we know it is a dangerous game trying to call or pick a top so we might just have to wait on the sidelines until we get some drastic news that might ignite the correction.

In terms of the FX market we have seen the EURUSD pair move well above the 1.30 handle and as we mentioned in a previous blog, we think the pair is on it way to 1.33100 to complete the H&S formation on the daily chart. We have seen GBPUSD struggle over the last few weeks and it currently trades below the 1.50 handle however it has now moved back up to 1.49400 from its low of 1.48389, this pair will try and grind higher there is talk of it getting back to the 1.51-1.52 handle before making the next leg lower targeting 1.42. There are a lot of macroeconomic factors driving this pair lower and if the BOE continue to put to foot on the gas in terms of printing these levels may not be far away.

In terms of what to look out for today, we have EU Industrial production this morning followed by US retail sales this afternoon, with the lack of news flow this week these headlines could determine market direction for the course of the day.