The last 24 hours have seen quiet trading with very low volume as we head into the Christmas break. The US Dollar remains strong and is unchanged against the Euro at 1.2230 but has risen three quarters of a Yen to 12030. US stock markets rose for the fourth consecutive day with the Dow being the standout performer with a rise of 155 points or 0.9% to just shy of 18,000 again. Commodity markets recorded some of the largest moves yesterday with Gold price finally breaking out of their recent narrow range to the downside as Gold closed over 2% lower. Oil prices were again hit hard after their recent revival with WTI closing 3.2% lower to just above $55.
The IMF noted that lower Oil prices should boost Global Growth by between 0.2 and 0.7% in 2015 and estimates that only 20%-35% of the decline was due to weaker demand. In other opinions about where Oil price might stabilise in the medium term, the Iraqi Oil Minister expects a price above $70 per barrel in mid-2015 while the Saudi Oil Minister suggests it is not in the interests of the producers to cut production no matter what the price is and expressed doubts whether we will see Oil back above $100 a barrel.
US markets rose despite weaker economic data with Existing Home Sales falling a larger than expected 6.1% with the November weather being blamed.
This morning on the economic front we have UK GDP at 9.30 am. We have no data of note due from the Euro-Zone whilst the US will release GDP, University of Michigan Consumer Confidence, Richmond Fed Manufacturing Index and New Home Sales at 1.30 am, 2.55 am, 2.59 am and 3:00 pm respectively.
Finally I would like to wish everybody a very happy and peaceful Christmas and to thank you for your continued support over the last 12 months. The next update will be on Monday, December 29.
March S&P 500
Although the S&P traded in a very narrow range yesterday the plan worked out well as shortly after I posted the S&P was trading at my 2074 sell level. After the US reported its weaker than expected Existing Home Sales the S&P had a nice sell-off which enabled me to cover this position at 2069 and I am now flat. It is amazing that everytime the S&P looks like it is going to break-down substantially to the downside the Fed comes to the rescue and I have no doubt that this party is not going to end in a positive fashion given the fact that the Fed’s Balance sheet stands at over $193 trillion. My strategy going forward will be to keep selling spikes with a tight stop and as this is my last trading session until next Monday I want to be flat by tonight. Today I will again be a small seller on any further rally to 2079/2083 with a 2086 stop.
Euro/USD
My long 1.2220 Euro position worked out well yesterday as by the time I posted the Euro was trading at 1.2260 which enabled me to cover and I am now flat. The latest Daily Sentiment Index reading for the Euro shows just 6% bulls which is one of the lowest reading since the Euro started trading. The Euro has very big support from 1.2100/1.2200 and over the Christmas I am going to leave an order at 1.2120 to go long with a 1.2045 stop as this period can have exaggerated moves in either direction due to the lack of liquidity.
US Dollar Index
No change as I am still short the Index at 89.85. Today I will raise my stop slightly on this position to 90.35.
March DAX
The Dax plan worked out very well yesterday as after I posted it was trading at my 9930 sell level before having a nice move lower after the US markets opened which enabled me to cover this trade at 9870 and I am now flat.
As the Dax is closed for the next two days I am going to stay flat over the Christmas and I will wait until next Monday before putting on another trade.
March FTSE
The FTSE continues to push higher as the ‘Santa Rally’ continues. My only interest in buying the FTSE is on a dip to 6460/6490 with a 6440 stop.
Dow Rolling Contract
The Dow was the strongest of the main Indices yesterday as it posted a 0.9% gain. Just before the close the Dow rose to my 17950 sell level. I am still short but I am not comfortable with this position given both the price action yesterday and the fact we are in one of the seasonally strongest times of the year. For this reason I have covered this position for a break-even this morning and I am now flat. Today I will again be a seller on any further rally to 18020/18070 with a 18110 stop as the Dow is too near the 18,000 level for the market to not at least test this level. I am also more comfortable being short over this key 18000 level.
March BUND
Given the fact that the Bund is closed for the next few days I have decided to cover my short 155.10 position at 155.06 this morning and I am now flat. I am going to stay flat until next Monday when my normal service resumes after the Christmas break.
Gold Rolling Contract
After I posted yesterday Gold was hit hard to the downside and after buying it at 1184 I was quickly stopped out of this position for a small loss at 1175 and I am now flat. Today I will still be a small buyer on any further dip to 1158/1165 with a 1145 stop.
Silver Rolling Contract
No change as I am still long from last week at 15.80 with the same 15.45 stop. If I am stopped out of this position I will be a more aggressive buyer in front of 14.80 with a 14.30 stop which is just below the 14.49 low made earlier this month.
Recent Comments