Stock markets were generally weaker over the past 24 hours,with a variety of news weighing them down. The overall tone is risk averse ahead of the Fed’s final FOMC meeting of 2013, next Tuesday and Wednesday, culminating in Bernanke’s last meeting and his final press conference as Chairman of the Fed. Polling of market participants suggests that the proportion expecting the Fed to announce that it will begin to taper QE Bond Purchases has risen markedly after the strong US Payroll report last Friday. US Bond Yields fell with the US Dollar lower, down 1/4%, for the Dollar Index as the Euro challenged the 1.3800 level high made earlier in the year.
The fall in UK Production of 0.4% versus +0.3% expected did not help the European markets as the FTSE and Dax lost 0.6% and 0.9% respectively.
Today is another light day for economic data. This morning we have German CPI whilst the only data of note due from the US is MBA Mortgage Applications and the Monthly Budget Statement.
December S&P 500
The S&P had another quiet trading session as the markets started to get nervous ahead of next week’s FOMC Meeting. The S&P ended the day down 0.3% as the market generated a third Hindenburg Omen in the past 10 days which normally leads to at least a 3-5% correction in the stock market. The S&P finally traded down to my 1802 buy level and after a nice rally over night I was able to cover this position at 1807 and I am now flat. Today I will lower my buy level to 1792/1796 with a 1789 stop. I will also be a seller on any rally to 1807/1811 with a 1813 stop. If the S&P breaks 1815 I will be a small buyer with a 1809 stop.
Euro/USD
The Euro continues to trade higher as the US Dollar was soft across the board. The Euro challenged the 1.3800 key resistance level before having a small sell-off and I am still flat. Given how overbought the Euro is trading I will be a small seller on any rally to 1.3825/1.3850 with a 1.3870 stop.
I am still long the US Dollar Index at 80.25 and I will leave my stop the same at 79.80. If I am stopped out I will be a more aggressive buyer on any dip to 79.60 with a 79.30 stop.
December DAX
After I posted yesterday morning the Dax started to sell-off as the market is still reeling from the weak German Industrial Production Numbers on Monday. It traded down to my 9115 buy level before having a nice rally and I was able to cover this position at 9145 and I am now flat. The Williams Index has started to turn down and today I will be a seller on any rally to 9100/9130 with a 9156 stop which is just above the high made yesterday afternoon. My only interest in buying the Dax is on a dip to 8990/9020 with a 8975 stop.
December FTSE
The FTSE just missed my buy level yesterday and I am still flat. The Williams Index for the FTSE has also started to turn down and today I will lower my sell level to 6540/6560 with a 6575 stop. My only interest in buying the FTSE is on a dip to 6410/6430 with a 6395 stop.
Dow Rolling Contract
I was very unlucky yesterday as the Dow missed my 15960 buy level by 2 points before turning around and having a nice rally.and I am still flat. The Dow is starting to turn lower this morning and today I will be a buyer on any dip to 15900/15930 with a 15880 stop.
March BUND
The Bund is still trying to stabilize over the 140.00 level after last weeks sell-off. Today I will raise my buy level to 139.90/140.10 with a tight 139.75 stop. If I am taken long and subsequently stopped out I will be a more aggressive buyer on any dip to 139.30/139.50 with a 139.15 stop.
Gold Rolling Contract
Gold managed to break and close over the important 1260 level yesterday. Even though it is back below this level this morning it will be interesting to see if we can close back above this 1260 level this evening. I still like Gold and I believe that we put in a reasonable low at 1212 last Friday. Today I will raise my buy level to 1244/1252 with a 1238 stop.
Silver Rolling Contract
After I posted yesterday Silver tried the downside but unfortunately just missed my 19.90 buy level with a 19.93 low before turning around and followed Gold higher. Today I will raise my buy level slightly to 19.90/20.10 with a 19.70 stop on any long position.
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