Bunds hit the 122.00 level dropping 250 points from its resistance level it was at just 2 days ago. The question is are we going to test the next support level at 120.50 or head back up to the 124.50 area. Well my bet would be a run back up to 124.50. This would coincide with an overdue pullback in stocks, which at the moment looks very strong, rising today despite dismal job numbers. However technically speaking 8000 on the Dow Jones is resistance, and more resistance is at 8500, so it would really require some real good news, and not just ignoring bad news to push this market higher.
Euribors also continued to sell off as did short sterling. Spreads were ranging in a much larger range since yesterday, which is making trading much better. This accompanied by increased volume has created much more opportunities. Jun10-Sep10 spread has ranged between 20 and 22 over the last two days, ranging nicely. Next week I would expect to see continued adjustment in positions as they digest this weeks events.
Summing up I think this week just seemed to perfect for stocks, we had the relaxation of mark to market accounting, G20 stimulus agreements, a spot on job loss, one after another news was positive for the market. Sounds to good to be true, something has got to give. I'm not a bull yet but still will stick to day trading, as these swing trades are a bank breaker if you time it wrong. I think we are going to start seeing the demise of the dollar too long term. I was looking into a automated fx package and this one called FX auto pilot seemed to be interesting. Will be looking into it more will keep you posted.
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