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Two Ways: Germany Hops on Recovery Express


Strengthen your portfolio in good times and bad.

Germans Jump for Joy

German investor confidence jumped this month more than economists had forecast, a sign that Europe's largest economy may be recovering faster than some had previously thought. According to Bloomberg, Germany's ZEW Center for European Economic Research's index of investor and analyst expectations rose to 44.8 in June from 31.1 the prior month, above consensus expectations for a gain to 35. The index, which is used to predict economic progress six months ahead, is now at its highest level since May 2006.

Despite the positive numbers, some economists are still warning that the rally in stocks may be obscuring the true weak state of the German economy. See related thoughts by Toddo in Bear Market Denial?

From the Bull Pen: This is evidence of increased risk appetite around the world. Bulls can look to global tech play Cisco (CSCO). A near term sell stop can be set below its 20 DMA ($19). Also be aware of $18.60 (gapfill and 50 DMA) as secondary support.

From the Bear Cave: If you're bearish on the dollar vs. the euro, consider a play on the euro ETF (FXE). A look at the daily chart shows that it's approaching gapfill near $136.50 which also coincides with the bottom of its Bollinger Band. A sell stop can be set below that level.

Quick Check Around the World

Asian trading closed with the Hang Seng -1.80%, India 0.55%, Shanghai 0.48%, Nikkei -2.86%, and Taiwan -0.08%.

Glancing towards Europe, we see the FTSE 0.58%, CAC 0.29%, DAX 0.32%

As of 8:15 AM EST, S&P Futures are trading +2.6 to 923.72 and Nasdaq futures are +7.2 to 1456.96.

A Look at Commodities

Over in commodities, crude oil is trading +1.73 to 72.35 while gold is +8.50 at 936.00 this morning. Silver is +1.920 to 14.30 and copper +2.25 to 230.75.

The dollar index is -0.6700 to 80.8850.

On the Radar


08:30 Housing Starts 490k cons
08:30 Building Permits 500k cons
08:30 PPI 0.4% cons
08:30 Core PPI 0.1% cons
09:15 Capacity Utilization 68.6% cons
09:15 Industrial Production -0.5% cons

Click here for the full trading radar.

Happy Tuesday! Good luck and have a great day!
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No positions in stocks mentioned.

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