Europe up green lights for the US today too.
The world’s markets are carrying a tune and it is decidedly upbeat. Europe’s big 4 indices, the CAC, DAX, MIB and the FTSE are well into positive territory today and likely to continues to be so for the end of the day. This has an expected carry over effect to the US market today as this cycle, which is fairly common, except for the falls of February when it was nowhere to be seen. Prices rise in the stock markets because buy orders outnumber sell orders. When we look at the associated volume with the rises than have been in train for this past week we understand that buyers are returning to the market and raising volume way above the levels associated with the downturn. The ECB’s decision to leave interest rates unchanged was welcomed by the markets and didn’t throw any water on the party. Watch the continued flow of earnings as we enter the high season which started this week and extends into next week. Hundreds of firms will report their Q1 2018 earnings and traders will buy and sell in greater numbers than usual because the trades are well understood and work reliably more often than not. Trade macro market moves these days with tighter stops, meaning shorter distances from your entry points than you would in less turbulent times. This is because the signal to noise ratio, is higher AND there is no real trend underway yet so price can reverse suddenly for lack of conviction rather than an event. Who can foretell that? The Doors Ladies and Gentlemen. Roadhouse Blues. “Keep your eyes on the road and your hands upon the wheel”.
Germany’s giant TUI the travel and tour operator is seeing strong price increases and so we recommend the trade because of the solidity in the trend as well as the solid performance of the firm this past year. We enter the trade at or above 18.705 seeking to take profits between 18.990 – 19.330. We place our stop loss exit order between 18.310 – 17.675. This signal has longer term potential than usual for our recommendations. Place your stops further away from entry point to ensure remaining in the trade for longer time periods.
Silver continues its long slide and it has been a successful position to hold and trade regularly as the slide seems unabatable. Silver is 65% below its high price of 59 reached in 2011. Despite the correction in this decline during the first half of 2016, the slope returns negative and remains so into the foreseeable future. Enter at or below 16.469 and place take profit exits orders between 16.430 – 16.390. Place stop loss exit orders between 16.525 – 16.560.
Despite the continued rise in the price of crude which often has a strengthening effect on the Canadian Loony due to the reliance of the economy on the energy sector for a large percentage of it output, the CAD is weakening against the US Dollar. We think Canadian Dollars are moving into the US as a result of enhanced earnings potential across the border. Regardless of the fundamental reason, they USDCAD is strongly up. Therefore we enter the position today at or above 1.289 placing take profit exit orders at 1.292 – 1.295 and our stop loss exit order at 1.284 – 1.280.