Market Review

Equities pulled lower initially yesterday and it appeared as though the poor Non Farms Data seen on Friday was beginning to play out in market sentiment. However, despite our bearish fundamental outlook we maintained a long entry in the S&P 500, having learned that as long as central bankers are in charge, and monetary policy remainsaggressivelysupportive, we were more likely to see equities supported. This type of execution can feel counter-intuitive but it isincrediblyimportant when trading at an institutional level; trade what you see on the charts in front of you, rather than trying to force a fundamental view. Many bears in the past havealreadylearnedthislesson the hard way. Our entry at the pivot level in the S&P at 1544.75 was perfect as the market tested our entry repeatedly before moving through target one, 1550.75 just before the market close.

Today’s Fundamental View

For today we are subject to the same conflict, where in many respects we would like to see equities lower based on our fundamental view but, like yesterday, we will still look to implement a long strategy in risk assets. On the data front we see another quiet day with only US Redbook at 13:55 GMT providing any kind of potential action before Wholesale sales and inventories at 15:00 GMT. Of more importance will be the speaker activity this afternoon, with Fed's Lacker, Lochartand Kocherlakotaall speaking this later today and the markets will still be expecting soothing monetary comments after thedisappointingdata on Friday. On the S&P our entry long is at 1557.50, which was the high seen last Thursday. The prudence of this entry reflects the afore mentioned conflict, although traders looking to take opportunity from a further push higher in risk should take comfort from the weight seen in safe haven Government bonds seen this morning.

Alternative Scenario

After a strong EU open all major equities have been trending lower. Should the S&P break 1550.00 today you may see a quick test of yesterday's entry, 1544.75.

E-Mini S&P 500 (Jun13) Futures

SP 500

StrategyNeutral – Entry Long
1st Target1563.75
2nd Target1568.00

Key LevelsComments
1568.00April High
1563.75Yesterday’s High
1559.00Low of the Day
1557.50Thursday’s High
1555.0061.8% April Fib & Pivot
1543.00Yesterday’s Low
1533.25April Low

AlternativeNeutral – Entry Short
1st Target1550.50
2nd Target1543.00

EURUSD (Jun13) Futures:


StrategyNeutral – Entry Long
1st Target1.3044
2nd Target1.3075

Key LevelsComments
1.309424th Mar High
1.3075Overnight High
1.3044Yesterday’s High
1.3013Low of the Day & Piv
1.2981S1 and 19/20th Mar Res
1.2956Thursday’s Resistance
1.2907Wednesday’s Low

AlternativeNeutral – Entry Short
1st Target1.2944
2nd Target1.2907

US 10yr T-Notes (Jun13) Futures

T - Note

StrategyNeutral – Entry Short
1st Target132.205
2nd Target132.170

Key LevelsComments
133.115Friday’s High
133.035Yesterday Afternoon High
132.290High of the Day & Piv
132.235Yesterday’s Low
132.205Friday’s Low
132.170Wednesday’s High
132.105Thursday’s Low

AlternativeNeutral – Entry Long
1st Target133.035
2nd Target133.115

Nymex WTI Crude Oil (May13) Futures: 8th April 2013

Crude Oil

StrategyNeutral – Entry Long
1st Target93.24
2nd Target93.79

Key LevelsComments
94.183rd April Low
93.7950% Year Fib and Yday and Today’s High
92.7438.2% Year Fib & S1
92.46Yesterday’s Low
92.12Thursday’s Low
91.91Friday’s Low

AlternativeNeutral – Entry Short
1st Target92.12
2nd Target91.91