Lull Before A Storm Of Data

There’s little today to get in the way of the current equity rally-unless Bank of America (BAC) upsets the party. FTSE (^FTSE) has re-taken the 100-day moving average and could re-test 4168.

In terms of newsflow today looks to be the lull before the proverbial storm; the truckload of announcements over the next few days suggests I’m going to be camped at my desk, so today I’m going to take youngest son to see some tanks (army not fish).

You can check out the full rundown in the Weekly Wrap, but here’s a taster of some of the week’s main events:

Earnings:
Today sees Bank of America and IBM (IBM), then the rest of the week sees masses from the US including Capital One (COF), Caterpillar (CAT), Du Pont (DD), AT&T (T), Apple (AAPL), Wells Fargo (WFC), Amazon (AMZN), Phillip Morris (PM), UPS (UPS) and Boeing (BA).

Economics:
A big week in the UK sees numbers for inflation, retail sales, unemployment and GDP as well as minutes from the latest MPC meeting and Darling Alistair’s budget on Wednesday.

In Europe the Fatherland releases its ZEW and IFO numbers and Thursday sees the release of Eurozone advance PMIs. From the US we get updates on home sales, both new and existing, and durable goods orders.

Then add to the mix a sprinkling of press conferences ahead of this weekend’s World bank and IMF spring meeting.

I’m running three positions at the moment, one based on the technical position but, more worryingly, two are just views.

I shorted gold last week at $875 when the price broke below its 100-day moving average. That bet is quietly working and looks set to test the 200-day moving average at $858.

I re-opened a short in FTSE late on Friday at 4095, though that bet is definitely going against the chart. Having conquered the 4050 level the next fight is for bull supremacy over the 100-day moving average at 4087. The index smashed above here last Friday, but failed to hold as pre-weekend profit-taking crept in. I’m not too concerned about where prices go today as this week should provide plenty of scope for trading opportunities.

I have set some limit orders to take partial profits; I’m looking to close out part of my gold bet at $860 (just above the 200-day MAV) and part of my FTSE short at 4010 (just above possible support at 4000). I think the bulls will try to hold 4050, but that doesn’t stop an intra-day spike down.

My third bet is the poorly-timed short bet on Lloyds Bank. The price has rallied between 20-25p since my multiple sales, which is irritating but bearable. Lloyds has been the epitomy of the ‘green shoots of recovery’ rally, buoyed by better than expected earnings from the US. So, there is a danger of a further push up if Bank of America manage to contrive a positive statement today. And I can’t look to the chart for any help; the 21-day moving average is looking perky and Friday’s rally saw a close above the 100-day MAV.

But I think it’s all getting a bit overcooked, the price has strayed above the upper Bollinger band and the RSI is flashing overbought. Having been smashed, the share price has more than doubled since Mid-March so there should be a few grateful profit-takers waiting for the current momentum to fade away.

And here’s one I’m keeping an eye on, but I don’t fancy opening this position if I’m going to be away from the desk:

The GBP/USD rate has fallen right back to support at the trend line; this could be a terrific long bet, but as I’m a bit confused by the breakdown between currency and equity markets I’d rather leave this one until I’m back at the desk.

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