Despite US Consumer Confidence rising to a five year high, markets were subdued on Friday and equities again sold off into the close only to rebound this morning on the stronger Chinese Trade Surplus, which rose to $27.6 billion in September from $26.7 billion in August. With Spain still refusing to request a bailout and some lacklustre earnings reports, equities and commodities were generally lower. In the US, Consumer Confidence rose to 83.1 in October from 78.3 in September. This week we have the EU leaders Summit which is been held on Thursday and Friday.
Today is a busy one for economic data in the US with Retail Sales, Business Inventories and the Empire Manufacturing Indices released later . These will be followed by speeches from the Fed’s, Locker and Bollard.
Dec S&P 500
The S&P dropped into my buy zone late on Friday, and again overnight, and I went long at 1421. I have taken profit here this morning at 1428 and I am now flat. The reason I have taken profit is I don’t like the fact we have sold off into the close over the last few days despite the very good economic data been released. Today I will look to go short on any rally to the 1430/1433 with a 1435 stop. We have now tested the 1420 area three times over the last week and I think at some point we will break and close below this level, which will be short term bearish. If I am taken short I will look to cover again from 1419/1423 and if we break 1417 I will go short with a 1423 stop.
Euro/USD
The Euro dropped into my 1.2900/.2920 buy zone with a 1.2891 low overnight. I went long at 1.2910 and I will look to take profit from 1.2950/1.2970 and I still want to go short on any rally to the 1.3000/1.3030 level, with a 1.3050 stop.
Dec DAX
The Dax has worked really well over the last couple of weeks and the market traded down to my buy zone of 7220/7240, this morning, with a 7223 low. I went long at 7230 and I will look to take profit here from 7290/7310. The 7330/7350 is key resistance and I will look to go short in smaller size here with a 7370 stop.
Dec BUND
I still like the Bund and I will raise my buy level from 140.70/141.00 to the 141.10/141.30 with a stop at 140.95 on any long position. If I am taken long I will still look to take profit from 141.80/142.00 which is still very strong resistance. If the Bund breaks 142.20 I will also look to go long with a 141.90 stop.
Dec FTSE
Unfortunately I was stopped out of my 5792 long at 5775 on Friday and I am still flat. From now on, given how narrow a range the FTSE is trading in, I will have to leave a wider stop on any new positions so my trade sizes will be appropriately smaller. Today I will look to reset my long position from 5770/5785 with a 5750 stop.
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