Friday saw anther step lower on Oil prices with Brent closing down $1.69 to a five year low at $61.09. The broader based WTI finished $2.14 lower to $57.81. No surprise then that US Consumers are rejoicing at the prospect of lower gasoline prices with the University of Michigan Survey printing a new high at 93.8 versus 89.5 expected. The reason for Oil prices continuing their slide was the release of the International Energy Agency’s Monthly Report which cut its forecast for Global Crude Oil demand for the fourth time in five months. Much of this month’s cut stems from projected weakness in Russian demand for Oil.

However there was no joy for US equity investors on Friday with the Dow falling 316 points or 1.8% to have its worse week since September 2011. The fall was blamed on what  plunging Oil prices might mean for global demand ahead. US Treasury Yields eased further with the US 10-Year Yield within sight of 2%, down 10bps to 2.08% which is a fresh closing low for the year. It is amazing with the US printing a decent +3% GDP for 2014 that 10 Year Bond Yields are trading near record lows. These record low Bond Yields are telling you that the US economy is in serious trouble.

Overnight the Japanese Yen opened weaker on the back of yesterday’s snap election in which saw Prime Minister Abe returned to power. However the Yen has since strengthened, helped by the fact that the Nikkei closed over 1.5% lower.

This morning on the economic front we have no data of note due from the UK or the Euro-Zone.The US will release its latest Empire Manufacturing Index, Industrial Production and the NAHB Housing Market Index at 1.30 pm, 2.15 pm and 3 pm respectively. Finally at the later time of 9 pm we will get the US Net Long Term TIC Flows.

December S&P 500

This will be the last few days of trading the December Contract as I will roll to the March Contract on Wednesday. The S&P plan worked out very well on Friday on what was another extremely volatile trading session as shown by the VIX which is now back above 20. Initially the S&P traded lower to a 2016.50 low before rallying to a 2032 high on the back of the excellent Consumer Confidence Numbers. Subsequently when Oil started to plunge the S&P traded lower to my 2014 buy level before having a nice rally to 2024 which enabled me to cover this position at 2022. The last 30 minutes of trading saw the S&P plunge to a closing 1999 low. I bought the S&P near the close at 2001. I am still long and I will leave a 1995 stop which is just below its overnight low as given the fact that the S&P is oversold and trading at the bottom of its Bollinger Band I would expect a rally ahead of Wednesday’s FOMC Meeting and Yellen Press Conference that follows.The S&P will have resistance at 2015/2020 and today I will be a small seller in this area with a 2024 stop. If I am stopped out of my long position at 1995 I will be a more aggressive buyer on any further dip to 1985/1990 with a 1979 stop.

Euro/USD

The idea of buying the Euro on dips is continuing to pay dividends. After I posted on Friday the Euro had a nice rally which enabled me to cover my long 1.2400 position from Thursday at 1.2460 and I am now flat. Today I will again be a small buyer on any dip back to 1.2390/1.2420 with the same 1.2365 stop. A break  and close over 1.2520 will be very positive.

US Dollar Index

No change as I am still short at 88.65 with the same 89.05 stop. A break and close below 88.00/88.25 should lead to more Dollar weakness.

December DAX

Just like the S&P, the Dax also had a wild trading session on Friday with the market falling nearly 300 points from its early morning high. After I posted the Dax started to fall just missing my 9820 sell level in the process and I am still flat. Thankfully I have not been long the Dax over the last week. Given that this is Contract expiration for the December Futures markets on both sides of the Atlantic and the fact that we have the FOMC Meeting on Wednesday I do not want to be short at this time. Today I will be a small buyer of the Dax on any dip to 9550/9580 with a 9515 stop.

December FTSE

Thankfully I had a tight stop on my long 6372 FTSE position on Friday as shortly after I posted it traded lower to my 6330 stop. The market continued to get hit for the rest of the trading session with the FTSE eventually trading lower to my 6270 buy level. I am still long as the market is extremely oversold and trading at the bottom of its Bollinger Band while the Williams Index has just given a buy signal. I will raise my stop on this position to 6280. If I am stopped out of this trade I will be a more aggressive buyer in front of 6240 with a 6190 stop.

Dow Rolling Contract

The Dow plan worked out well over the last week with the market falling over 700 points last week. Given the fact that this week is Contract expiration and the FOMC Meeting on Wednesday I have decide to cover the rest of my 17970 short position at 17350 this morning and I am now flat. Today I will be a small buyer on any dip to 17240/17300 with a 17190 stop. I do not wan t to be short at this time.

March BUND

When the equity markets started to sell-off on Friday the Bund traded higher to my 154.70 sell level. I am still short and I will leave my stop the same at 155.05.

Gold Rolling Contract

Gold is trading lower this morning on the back of the rebound in the equity markets. I am still long half my 1215 position from last week having already cut the other half at 1232. I will continue to leave my stop the same at 1205 on the other half. If I am stopped out of this trade I will be a more aggressive buyer from 1190/1195 with a 1183 stop.

Silver Rolling Contract

No change as I am still long at 15.10 with the same 16.50 stop.

January NYMEX Crude

Today is possibly the day we finally see a trade-able low for Crude especially if it can break and take out Friday’s high at 59.50 which will means we will have a Key Day Reversal to the upside. As I mentioned last week I have never seen a market as oversold as Crude especially after its 50% recent fall. On Friday after it traded lower to my 58.30 buy level I was stopped out of this position on the re-open last night at 56.80. Given how oversold Crude is trading I re-bought the market shortly after getting stopped out  at 56.60. I will leave a 55.90 stop on this position which is just below the overnight low. If it breaks 59.50 I will raise my stop to 58.95.