The UK economy had a much stronger than expected quarter of growth in Q3 aided by ticket sales and visitor spending at the Olympics. The result was also enhanced by the impact of the Diamond Jubilee Holiday. US Durable Goods Orders – which is a lead on US Business Investment – rose by 9.9% thanks mainly to a bounce back in Boeing aircraft orders. However core orders were flat for the second consecutive month, after having fallen in July, pointing to downside risk to business investment in today’s GDP No’s. Other data was mixed with Pending Home Sales a little higher in September and Weekly Jobless No’s coming at 369k resulting in a slightly lower trend, implying a very gradual labour improvement.
The big news after the close was Apple results which missed expectations and is now weighing on Futures markets ahead of the New York opening. Apple reported that profit in the 3rd Quarter is $11.75 a share on sales of $52 billion against expectations of $15.49 a share and $55.1 billion. Later this afternoon we have US GDP for Q3 and the University of Michigan Survey.
Dec S&P 500
After the stronger than expected Durable Goods Orders and the Weekly Jobless No’s, the S&P traded up to my 1417 sell level. I took profit at 1410 on this trade before the market dropped to my 1403 buy level with a 1399 low. We then traded higher and I took profit at 1408. After the close the market collapsed on the weak Apple news and I bought again at 1401 and I took profit at 1407 and I am now flat. This morning the market is very oversold, and at the bottom of the Bollinger Band and Williams Index, and I will be a buyer on a dip to 1390/1396 with a 1385 stop. I will trade in smaller size with a larger stop. I will look for the market to close the Gap as it is will be very unusual to leave two down gaps unfilled in the same week.
Dec FTSE
Yesterday was a day to watch price action in relation to important news data. After the release of the stronger than expected Q3 GDP No’s the FTSE only traded up to 5822 twice, despite the stronger reaction in other European Markets and this was my sign to cut my position and I took profit at 5817 on my 5758 long from the previous day. This morning the FTSE is at the bottom of its Bollinger Band but not the Williams Index and I will look to buy on any dip to 5710/5730 with a 5965 stop. If I am taken long I will look to take profit from 5770/5800.
Dec DAX
The Dax finally hit my buy level late yesterday afternoon and I went long at 7185. I took profit at 7215 before the close as I did not want to have a position into the Apple news and I am now flat. Just like the other Equity markets the Dax is oversold and should find support at the 7120 low made last Tuesday. I will be a small buyer from 7100/7125 with a 7080 stop.
Euro/USD
The Euro continues to hang in despite the very weak Equity markets and I was stopped out of my 1.2960 long at 1.2920 overnight and I am now flat. I am going to stay flat as I anticipate having positions in the other markets that I trade and I will see how the Euro trades for the rest of the day. On bigger picture the 1.2770/1.2870 level will offer a lot of support and it will take a break of 1.2750 for me to get bearish.
Gold – Rolling Spot
Gold has traded down to my 1701 buy level and I am long in very small with a stop at 1678. I will look to take profit on any move back to 1720/1730.
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