29th January 2010
US economy grows 5.7%!
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The US GDP figures are in and I just wanted to pass on a short update on this week's trade.
Just to remind you, I suggested you buy the FTSE 100 at 5200-5210 over the Friday US GDP data, placing a stop loss at 5150-5120 and our target 5300-5350.
Well not long ago the US GDP data came through, blowing expectations with an increase of 5.7% in the GDP versus the median forecast of 4.7%.
Given that the market has been relatively choppy in the last 10 trading days, this news should be enough to spark a brief rally that might last one or two days.
So I suggest you keep the position open over the weekend while the news is digested and close the position on Monday after the market has settled. Unless there are very negative news over the weekend (an event with a very low likelihood) the market should continue to rally .
The target price remains 5300-5350 but if on Monday we fail to achieve that level do close the position anyway.
I will be back Tuesday with a new piece.
Riccardo Marzi
Events Trader
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