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
Wednesday, 13 February 2013
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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