Yesterday there was confirmation that the Euro-Zone is back in recession again with GDP falling 0.1% for a total of – 0.6% for the year to September. This news came despite marginally better than expected GDP reports for France and Germany with both recording barely positive growth of 0.2% for Q3. Whilst France and Germany just escaped negative growth the periphery is really struggling in the grip of austerity at home and soft global export markets. Greece’s economy has shrunk by 7.2% over the year to Q3, Portugal by 3.4%, Italy by 2.4%, Spain by 1.6% and even the Netherlands is down 1.4%. In the US we are starting to see some effects of hurricane Sandy on US data for November. US jobless claims jumped 78k in the week ended November 10th, not too dissimilar to the 100k increase in claims in the 2 weeks after Hurricane Katrina. The Philly Fed Survey also noted the impact of Hurricane Sandy.
Today is very quiet on the economic front with Trade Balance for the Euro-Zone followed in the US by Industrial Production for October.
Dec S&P 500
A much quieter day in the S&P after the previous two wild days. It finally traded down to my buy zone a couple of times and I bought at 1347 and took profit at 1354. The reason I took profit is Apple is continuing to trade heavy and when the S&P fell back to my 1347 buy level I went long again in a third of my normal size. I will continue to add to my position on any further dip to the 1338 level with the same 1334 stop. The McClellan Oscillator continues to weaken and closed at -284. In summary I am looking for one more move down followed by a sharp rally but I am still going to hold a small long position in case we don’t get a sell off first.
Nasdaq 100 Rolling Contract
No change here, I am still long at 2558 with the same 2510 stop. It is disconcerting that Apple closed at $525 which is just below trendline support at 528/530 but I will continue to hold my position. If I am stopped out at 2510 I will leave a buy order at 2520 to go long again as I want to be able to catch this sharp rally if and when it occurs.
Dec FTSE
The FTSE traded down to my buy level and I went long at 5650. I will leave my stop the same at 5625 and I will look to take profit on any rally to 5695/5720.
GBP/USD
The market finally dropped down to my buy area and I went long at 1.5840. The Williams Index has just started to turn up and I will leave a breakeven stop on this position. If I am stopped out I will look to reset my long position from 1.5790/1.5810 with a 1.5770 stop.
Dec BUND
The Bund still continues to trade heavy but at least it traded up to my 143.30 sell level and I am now short. I will lower my stop to 143.40 and I will also look to take profit on any dip to 142.60/142.80.
Euro/USD
No change from yesterday as I look to buy from 1.2710/1.2730 with a 1.2690 stop
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