The major US stock indices all close up 0.4% on mixed volume with most sectors netting gains, the exception being healthcare which closed lower. All eyes will be on Wednesday when the latest FOMC meeting concludes however there is no expectation of any change to QE Tapering with a big clue in the fact that Chairman Bernanke is not holding a press conference. This will be his second last meeting as Chairman of the Federal Reserve before handing over the reigns to Janet Yellen in January.
Today is another busy day for economic data. This morning we have the CBI Survey from the UK and Italian Industrial Production. Later this morning the ECB’s Coeure is due to speak on Monetary Policy. Also, as the US did not change to Winter-time at the weekend the their data releases will start at the earlier time of 12.30 pm. Today we have Factory Orders and Pending Home Sales ahead of Industrial Production at 1.15 pm. This is followed by the Chicago National Activity Index.
December S&P 500
For the second day in a row, on Friday, the S&P just missed my 1741 buy level before having a nice rally. The market subsequently traded up to my 1755 sell level near the close and I am still short in small size with a 1763 stop. The Daily Sentiment Index closed unchanged at 87% bulls but I will continue to look for this indicator to trade up to the 92/93% level which should happen this week as the last week in October is traditionally a seasonally strong one. I plan be a small buyer of the S&P on any dip to 1744/1748 with a 1741 low which is just below last Friday’s low.
Note: With the US still in Summer-time the stock market hours this week will run from 1.30 pm until 8.15 pm.
Euro/USD
After I posted last Friday the Euro made a new high of 1.3840 helping the US Dollar Index to enter my 79.15 buy level. I am still long and I will leave my stop the same at 78.70 as I am hoping that this position will turn into a more macro trade as I look for the US Dollar to put in a bottom at current levels. If I am stopped out of my long Dollar Index position I will be a more aggressive buyer from 78.30/78.50 with a 77.95 stop. I will still be a small seller of the Euro on any rally to 1.3870/1.3900 with a 1.3920 stop.
December DAX
The Dax worked well on Friday as shortly after I posted the Dax traded up to my 9005 sell level and after a small sell off I was able to cover this position at 8980 and I am now flat. As I have mentioned over the last week the Dax will be a sell as long as we do not close over 9060. Today I will be a small seller from 9010/9040 with a 9070 stop. I still do not want to be long of the Dax at this time.
December FTSE
No change as I am still short from 6700 with the same 6745 stop. I am also still a buyer on any dip to 6610/6630 with a 6595 stop.
Dow Rolling Contract
Late on Friday the Dow traded up to my 15570 sell level. As I was also short the S&P and the FTSE at this time I decided to cover my Dow short for a break even before the market closed and I am still flat. The key level for the Dow is 15710 and as long as we stay below this point I will look to sell rallies. However a break and close over 15710 will be bullish. Today I will be a small seller on any rally to 15650/15680 with a 15720 stop.
December BUND
No change as I am still a small buyer on any dip to 140.35/140.55 with a 140.15 stop.
Gold Rolling Contract
Gold worked well on Friday as shortly after I posted it traded down to my 1338 buy level before having a nice rally and I was able to cover my long position at 1352 and I am now flat. Gold has now closed over 1330 for nearly a week and technically this is bullish. Today I will be a buyer on any dip to 1337/1343 with a 1333 stop.
Silver Rolling Contract
Silver has been trading heavier than Gold over the last few days. It traded down to my 22.40 buy level on Friday and I am still long with the same 21.95 stop. If I am stopped out of this position I will be a more aggressive buyer in front of 21.50 with a 20.95 stop.
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