In the end the correction was triggered by a BIT of indecision by Ben Bernanke on QE going forward. Not a big event but it seems the market was ready to profit take and re-evaluate the bull run. Amazingly the S&P went from R3 to S3 exactly in a day ( 400 points ). Overnight the Asian market got killed.

Our job as traders now, is to decide whether this is just a correction, which may last a week, or a deeper re-think on this buy anything feeding frenzy. One thing for sure do not dive straight in here and buy. There could be a further sell off to come.

The answer is I don’t know. I suspect the market players have been given a shock. The one way bet has suffered a dent. We still have the zero interest rate effect so the market will stabilise and be attractive. The market may get a little more selective as to where they buy so periphery markets like Spain , Italy may take a bigger hit. The fact is we need to wait and see. Certainly I do not expect the market to re-bound and forget the shock they have just received. So today will be volatile but I favour a sell on any bounce. This un-certainty should last a week or so and the level it will retrace to should be come clearer overtime.

Levels today are  S&P 1659 1632   Euro 1.2900  1.2750  USD/JPY 103.25 100.50  (Getting killed as I write)

As I write the market is still getting hammered. Dangerous to be a buyer here.

3.00pm is the big event today. The US have been pouring 85 bln Us dollars into their system every month. We know what it has done and a lot of commentators credit it with the recovery in the US economy. Is it about to be tapered off? I don’t think the timing is right or the economy is strong enough yet. Remember he said he would continue with QE until the unemployment rate reaches 6.5%, we are not there yet. However the market will be focused on what he says and any hint of policy going forward.

Expect a pretty quiet session ahead of 3pm.

Yesterday we reached another high on the S&P, same old same old. Dependending on Ben we may get a small pull back or a surge. Any tapering of QE will cause some small selling but remember if the Fed Chairman is willing to unwind support for the market it is because he feels the market is strong. This is good for stocks so any sell off well be short lived.

Levels today are: S&P 1675  1660  Euro 1.2940  1.2840

A good bounce in Silver and Gold. S&P puts in another new high and retreats. Dollar weakens a bit. Fed Evans comments ended the lastest rally last night but the big event will be Bernanke later this week. It is highly likely QE will continue for a long time and this market rally will  also. 1670 was reached briefly and it is probable we will trade to that level again today. This market could be described as boring, same pattern everyday but for those buying this stock market on dips it is a printing machine.

Levels today are S&P 1670 1660  Euro 1.2900  1.2840

Market dominated by a strong dollar. USD/JPY reached 103.25 and the Euro bottomed at 1.2800. Stock markets continued to rise S&P closing at 1665 on Friday. More of the same is in order for the start of this week.

1.2750 is the big support level on the Euro a break through there would signal a move toward 1.2350

No sign of a correction in stocks so buy on dips again.

Levels are Euro 1.2900  1.2800  1.2750

S&P 1665  1652

No news and the markets fairly calm. Looks like a Friday off! Market this week has been nicely volatile but we faded out of making a new high yesterday on the S&P, so today we may go sideways.

Technical trading ahead for today.  Levels are S&P 1660 1646  Euro 1.2900  1.2840  USD/JPY 102.7  101.80  Gold 1400  1325

Slow trading day ahead I feel.

Euro zone inflation up at 10.00 am. 1.2% expected. If this figure comes in below expectations we could see a sell off in the Euro. 1.2840 is the key level and a close below there will bring 1.2750 (the Cyprus low) into play.

Elsewhere we saw the usual rally on the S&P. Reaching 1660 before a slight profit take.

Yesterday morning we saw bad growth figures in the Euro zone but the market mostly ignored them. We are in a strange market. Rallies with no correction and bad figures being ignored! We have to live with what the markets are doing and although it does not make a lot of sense to many, fighting the trend is useless.

Elsewhere Gold looks very soft and has broken 1400, there is little reason to buy gold when Equities are charging.

USD/JPY 102.50 may be a short term top and we may get a correction to 100.50 area.

S&P levels   1660  1644   Euro 1.2900  1.2890  1.2840 support.

Releases this morning for German and French GDP are very poor. The Euro area is close to returning to recession. The Euro is lower but stock markets are not. This is a result of the cash dynamic we have discussed all year. People are reluctant to sell equity markets because of the excees of cash available in the global market. Yesterday we saw another high in the S&P 1650.

The market is very relaxed about this data. And is hoping for a return to growth in the second half of the year.

We may see a small sell off this morning but not a major reaction to these figures as we would normally expect. The pattern has been for Europe to be negative and the US to bounce.

So we are still on the buy on dips strategy. Worked great yesterday.

Levels today are S&P 1633  1650  Euro 1.2940/50 is now a top 1.2900 support 1.2750 is the target.

Gold may find support at 1400/1410  USD/JPY looks a bit toppish at 102.50

Same again in the markets yesterday. Most products trading sideways and the US making a new high. Market is trading slower but the fundamentals remain the same. Today we have had German CPI, as expected and no surprise there. We are facing a day of range trading and probably a buy on any dip in the S&P.

It is important to understand when the markets are not offering major profit opportunities and now is such a time. Outside taking 20/30 points jobbing the only other opportunity is buying the dips on the S&P. Same again today.

Levels are Euro 1.3040 1.2940 major support. S&P 1620 support 1635 on the topside but not major.

Dollar is still strong this morning, Euro at 1.2975 USD/JPY at 107.75. Equity markets however seem to have stalled a little. We are now well into May and the confidence to drive this market higher is fading slightly. We may be in for some side ways trading on the equity markets for a while. We lack any decent economic stats toady with only Retail sales at 1.30pm set to add any direction.

Concerns that the single banking supervisory will require a treaty change may soften Euroepen equity markets this morning.

All in all not a lot to go for early in the week. Range trading and few serious profit opportunities.

Levels are   S&P 1630  1622 Euro 1.3060  1.2940  Gold 1485  1425  USD/JPY 102.15  101.20

Good jobs figures and a surge in the dollar have dominated overnight trading. USD/JPY finally put to bed the 100 resistance level. The economic releases in the US of late will bring back discussions on ending QE. This should cause the stock market to pause and put some serious strength back into the USD.

Trading should be interesting today, expect some profit taking in Euro and USD/JPY but the medium trend is clear. 105  then 110 for the pair. Moves as always will be fitfull and pullbacks will be large.  100 should be solid support so buy on dips

Euro 1.3000  1.2980 are major support 1.3100 is a sell level.  S&P 1630  1620 S&P may find it difficult to find new highs against this backdrop. Be careful on that one today. If it starts to sell off in US time the correction may be substantial. I don’t think the trend it over but being a Friday we may see a profit take.

But it is. Up and onwards we go. No end in sight to this historical rally. Buy anything, it would seem is the strategy. I am not going to become a bear and start to predict the top of this. The rally is based on the desperate need for yield. This market would buy a burnt out caravan if they thought they could yield 3% on it!

From a technical point of view it is hard to call levels as we are at new highs everyday.

The market is simply a buy on dips.

S&P support at 1622  1617   Euro at new highs after a break out yesterday  1.3125 support 1.3250 resistance

Elsewhere we are range bound on USD/JPY and Gold. DAX and IBEX will likely just follow S&P.

Don’t be a seller.

We could be in for some range bound days after the hetic first 4 months of the year. Everything outside the S&P is starting to find a range. Euro, USD/JPY, Gold, DAX and IBEX are all moving sideways. The S&P keeps punching new highs but is starting to look tired. The sell in May and go away might just take the sting out of the market. I am not expecting a big correction but the upside could becoming limited.

Today we have German  industrial production at 11.00am. Outside of that it could be very quiet. Market could stay in these ranges for some time if there is no big news. Value trades are at the edges of the range.

Levels are  Euro  1.3240  1.3060   USD/JPY 99.30  98.70  Gold 1485  1425  S&P 1622  1608

Low interest rates and Central banks printing is keeping the buying spree in stocks intact. No sign of a correction in sight. We have never seen this dynamic in the markets before and it is hard to see where this will all end. One thing is sure, the market will not go negative without some very bad news to drive it. It will be hard to convince stock holders to sell their positions without a very good reason. As yet there is nothing in sight to cause a turn around, so buy on dips.

Elsewhere the Euro is range bound as is USD/JPY. Euro stocks are taking their direction from the US so DAX and IBEX are heading higher also.

Mood this morning should be set by the French figures due out in 15mins.

Levels are   Euro 1.3240  1.3140    S&P 1615  1607

Looking for a top in this market will cost money. Just buy the dips.

After yesterday’s damp squid where the market showed some volatility after the ECB, only to end back where we started. The US market is pulling everything with it. Despite the Euro market attempting to sell off after Draghi disappointed it was the surge in the S&P that caused the rally late on.

Today is NFP and we expect 140k (a low number) Normally we have to have a number 20k + or – to cause a stir. Today however I think any number at 150 or better will result in a new high for the S&P. We need lower than 130 to result in a sell off. This US equity market is teflon, and right across the globe the hunt for yield is driving a ‘buy anything policy’. This will end in tears but not yet. There will have to be a major shock to the market to force hedge funds to exit the market. As yet there is no shock in sight, so we keep buying the dips.

Trading levels are : S&P 1596  1576  NFP will dictate.  Euro 1.3240  1.3180  1.3100  1.3045 is the major support.

All eyes on the ECB today. First up the rate decision at 12.45. Market is expecting a .25% cut. No cut or .5% cut will be the surprise. Later Mr Draghi holds his press conference at 1.30pm. This will be the main event. What he says and his tone will make clear whether the ECB is moving towards a more pro-active stimulus model. This has the possibility to cause serious volatility in these already volatile markets.

Yesterday the S&P took a hammering on poor employment figures. Friday is NFP so after today’s excitment we will do it all again tomorrow.

Trading today: .25% will be a damp squid. The action is on no cut or .5% . Euro will rise on no cut and fall on .5% A straddle play is ideal here but the chances are that little will happen.

More important is the speech. Expect serious volatility and a jobbing opportunity as he speaks. The market sentiment is what to trade after, as the move could be 150 points +

It is likely the Euro will move in the opposite direction to DAX and IBEX. Rate cuts are good for stocks.

The big move will come from an entrenched ECB. DAX and IBEX are up 500+ points on the basis the ECB will act. These are the markets vunerable to no change.

Elsewhere on the S&P, we had a serious sell off yesterday on the back of bad employment figures. Today is Europe’s day tomorrow the focus will return to the US.

Levels today are  S&P 1588  1585  1576  Euro 1.3240  1.3100 but don’t expect those levels to hold it we get a surprise decision.

The European markets are closed. Taking the day off. See you tomorrow for what is likely to be an exciting market.

Stocks and bonds right across the globe continue to rally. A direct result of the printing press in the US, Japan and the UK. Investors are desperate for yield and look ready to buy anywhere. Stock markets in the US and Europe continue to rally and bonds are being bought off the board. Where this ends nobody knows, in tears probably. You cannot buck a rally like this and as yet there is no bad news to halt it.

Today we have growth figures from Spain. Expected to be -.5 . The IBEX is at 8500! will the market care?  Infaltion figures are out today in Europe also. The market is looking at the data for hints on how much the ECB will cut on Thursday.

Thursday is going to be the big day. It is likely the market will sell off regardless of what the ECB does. ‘buy the rumour sell the fact’.

New highs for the S&P overnight and 1600 in sight. Don’t fight the rally, when it ends we will know.

Levels today are  S&P 1600  1592  1582  Euro 1.3120  1.3080  1.300  USD/JPY support at 97.50  97.00  Resistance at 98.50  Gold 1485  1425

Big week for the European market. ECB rate decision on Thursday and Draghi’s press conference. We have had a lot of talk about a change from the austerity policies and this week we will find out what the ECB think. Afterall it is their policy strategy that matters. A rate cut and a more dovish stance will be regarded as positive for the equity markets and will weaken the euro. If they re-state the need for fiscal adjustment as the only way forward the opposite will be the case.

Expect a sideways market until Thursday. We may see the sort of volatility of last week but I suspect we may be around the same levels come Thursday.

Today Levels are:  Euro 1.3100  1.3085  1.3000 1.2985  S&P  1582  1572 USD/JPY still stuck below 100  97.50 and 96.00 support. Gold 1485  1425

Well, we have US GDP today so the fun is not over. A disappointing figure here could cause a set back. This is where the action will be today. In Europe Merkel does not want a rate cut! This market will be very disappointed next Thursday if we do not get one. It will not help the market anyway but the recent rally is based on expectations that the ECB’s long standing austerity policy can be changed. I think it is unlikely in an election year for Merkel that a change of policy can be accommodated. It is likely we will stay bid until next week but Thursday/Friday next week cannot be missed.

Today it might be a little quiet. That happens when you get a week like this. Traders are tired and can some times lose interest on a Friday. Probably famous last words and the market will go crazy!

Anyhow levels are Euro 1.3100  1.2990  S&P  1588  1574  USD/JPY  99.50  97.50

Gold has pushed higher this morning  1400 now good support , upside is limited 1485 area.

A day for jobbing I think.

The reason the market is expecting a change of course from the ECB is because economies are getting worse. The situation 6 years after the collapse is actually deteriorating. Now we expect the ECB to cut rates, too little too late. The fact is a .25% cut will achieve nothing. Credit is not available in the Eurozone because the banks are bust, cheaper money does not help banks in fact it reduces margins. Look at AIB, they are increasing their variable mortgage rates, what effect will a rate cut from the ECB have on their clients? The money transmission system is broken, credit is not flowing and so growth is falling. It will take a massive stimulus injection into the Euro system to make any difference and even with that we can see from the US it will take years to produce any effect at all.

So what we are seeing is a relief rally based on hope rather than fact. It may continue for a while but it will reverse. Probably after the ECB conference next Thursday. So as with all trading we should not buck the trend and try to find a top. The move down will be substantial so wait for it to begin. In the meantime be careful on the buyside, this is a market that is volatile and irrational. The money will be on the correction and the reality. When the market realises the ECB are not going to release the bazooka that is needed we will sell off hard.

Today levels are:  Euro 1.3060   1.3000  1.2960  S&P  1578  1570  USD/JPY still stuck under 100    97.50 big support

Gold is finding it’s feet again  1400 support 1450  1480  resistance