The Euro-Zone continues to contract into October with the first activity/business surveys released this week showing disappointing results, none more so than the German IFO which came in at 100 versus 101.4 expected. The Manufacturing PMI fell to 45.7 from 47.4. A staunch defence of the ECB’s OMT plan by Dragi to the German Parliament was well received and may have helped keep Euro-Zone stocks in the black with the Euro Stock 50 Index ended up 0.5%. The FOMC meeting went off without incident with both the detail of the current QE programme and the forward rates guidance unchanged from September. There was some acknowledgement of a pickup in household consumption but the FOMC also stresses the weakness of business investment. Despite the 5.7% rise in New Home Sales the US stock market closed down on their lows with the S&P losing 0.4%.

Today we have UK Q3 GDP and later in the US we have the Weekly Jobless Nos which well be closely watched after last weeks surprise upward spike. We also have Pending Home Sales and two regional Fed Activity Indices plus, the always volatile, Durable Goods.

Before I talk about my trading plans I just wanted to emphasise the importance, in these choppy markets, of keeping your trades small and stops tight. The object of the exercise of trading is to stay in the game by maintaining capital. Every day is a new day and must be approached with the same degree of caution and optimism regardless of whether yesterday was good or bad. Remember, standing aside is also a strategy especially if you are a little unsure or you have had a bad streak. Discipline and sticking to your plan is a far more important element of trading than in finding a great system. So keep things tight and trade well!

Dec S&P 500

After a difficult Tuesday, the S&P followed my roadmap perfectly yesterday . After the release of US New Home Sales the market spiked higher to my 1415 sell level. I covered this position at 1409 ahead of the FOMC and then late on the market dropped down to my 1403 buy level with a 1401.5 low. I took profit on this position overnight at 1409 and I am now flat. This morning I will still look to go short from 1417/1420 with a 1423 stop and I will also be a buyer on any dip to 1401/1405 with a 1398 stop.

Euro/USD

The Euro traded down to my 1.2920 buy level and unfortunately I took profit at 1.2960 ahead of the FOMC as now we are back over 1.30 again. As I have been saying for the last few weeks I am still convinced the Euro is going back to the 1.3250/1.3400 level before it heads lower. Today I will be a buyer on any dip the the 1.2950/1.2970 level with a 1.2920 stop. I do not want to be short at this time.

Dec FTSE

Just after I posted yesterday the FTSE traded down to my 5758 buy level. I am still long and I will raise my stop to 5785 as I look for it to trade back to 5830/5850 where I will look to take profit.

Gold Rolling Spot

Very unlucky as Gold just missed my 1695 buy level with a 1698 low. Today I am going to raise my buy level to 1698/1703 with the same 1678 stop but in smaller size position.

Dec DAX

The Dax had a huge rebound off the 7120 low made on the IFO news and I was able to go short at 7210. I took profit at 7185 ahead of the FOMC and I am now flat. This morning I don’t want to be short as we are back above the 7200 and we had a large candle move off the 7120 low. I will be a buyer on any dip to 7160/7190 with a 7145 stop.