German investor confidence jumped more than economists forecast in February to the highest in almost three years, helping to propel U.S. equity indexes to new 2013 highs this morning. Another element we notice may be helping the stock bulls take action in the markets is the increased buzz of mergers and acquisitions this year. Almost $40 billion in deals were announced in the U.S. on Feb. 14, bringing the total this month to more than $140 billion (Bloomberg). Our first target for the MAR13 E-mini S&P 500 of 1530 is very close to being hit, with this market trading up 6.5 points today. More on that later…
An interesting story we see developing is the British pound. Since incoming BOE President Mark Carney’s statement that he wants to achieve escape velocity for the U.K. economy with potentially more stimulus, the pound has had one short covering rally to 1.59, but since hitting that key level, the pound has sold off sharply. Today, the pound futures are trading down 52 ticks to 1.5460. We believe 1.54 is very important resistance. If the pound continues to sell off beyond 1.54, we could see some major long liquidation down to potentially 1.50.
We also focus on the silver market today. Silver has also been in a steady recent sell off, and today sellers are in control again, forcing the market down 1.37% to $29.44. We continue to hold our first downside target at $27.50. Silver could even stay below that level and trade down to an important level of $22-$23.
We focus our technical analysis on the MAR E-mini S&P 500 futures. We have our first upside target at 1530, and the market traded all the way up to 1525 this morning, before a slight retracement. We continue to believe that the market is in extreme bull mode as long as it stays above 1460. We believe the market is indeed headed to all-time highs, and we think these levels can be reached this year.
Click to enlarge.