MidSession Review: Ink rivers.

Loading...
Loading...

Whatever newswire you read it will tell you that:

Global stock rose today as Spanish bonds gained after stress test results bolstered confidence in the nation's banking system.

Are you so positive about that?

Because we are not, the reason: As we said in the morning meeting we were expecting dip buyers to come in this morning,  and the only reason has to be found in the window dressing trading system. For the same reason, we concluded on Friday to not take into consideration that day's price movement because they were fake.

Although we keep our short bias the Euro was not on our side therefore we did not enter in any new position, the common currency bounced off a three week low trading 0.54% higher versus the greenback to 1.2933$. The euro edged higher as the final reading of the purchasing-managers' index, or PMI, for the euro-zone manufacturing sector rose in September but still signaled a 14th consecutive month of shrinking activity, data compiler Markit reported Monday. The index rose to 46.1 from 45.1 in August and was revised up from a preliminary estimate of 46.0, but remained below the 50 level, indicating a drop in overall activity from the previous month.

The common currency move sent the signal to increase the buying speed to dip buyers sending European benchmarks higher: the broader Stoxx50 gained 1.45% to 2,489.91. In the regional benchmarks' space: Italian Ftsemib led gainers trading 1.98% higher to 15,394.28 followed by, the German Dax up 1.33% to 7,312.35 and  the Spanish Ibex up 1.14% to 7,796.60.

The lack of news from Moody's this morning sent Spanish bond yields lower, Spanish 10-year yields were seven basis points down at 5.91 percent with 5-year yields down by a similar amount at 4.91 percent.

Again, ink rivers will be used to attribute the move to Friday's report on Spanish banks, but the reality is that it's just the Window dressing return trade.

On the commodity side, Gold rose 0.99% to 1,791.50$ an ounce and Oil (Wti) traded 0.80% higher to 92.93$ a barrel regaining it's path to north.

In US: manufacturing ended its worst quarter in three years in September as foreign demand for U.S. goods fell sharply, an industry survey by Markit showed. The figure came ahead of the Institute for Supply Management's manufacturing index for last month, forecast to show a slight decline in the pace of the sector's contraction. Economists surveyed by MarketWatch expect the index to finish at 49.7 in September, little changed from 49.6 in August.

But later in the session Bernanke will be under the spotlight, he is scheduled to deliver a speech on monetary policy, therefore investors expect the Fed chief to go into more details about the Q3 program.

The day is not over yet: the FESX is on our minor resistance point 2480,  we need to study the price action here to plan the next move.

 

 

 

Originally posted at www.77sigmatrading.com

Loading...
Loading...
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...