The US Dollar rose across the board yesterday as markets priced in the improving chance that the Fed will finally start to taper at their FOMC Meeting next week. The Dollar Index rose 1/2% whilst Equity markets ended the day lower with all the major stock markets closing down on the day. Gold got hit for 2.4% while the biggest mover was Silver which finished down 4.2%.
On the Currency markets the biggest mover is the Australian Dollar which is headed for its biggest streak of weekly losses since 1985 as the Central Bank Governor, Stephens, talked down the world’s fifth most traded currency. Stephens said that he would prefer a weaker currency to kick start the economy and would prefer to the the Australian Dollar at 85 cents against the US dollar.
The US Dollar was also helped by stronger US Retail Sales which rose 0.7% versus a rise of 0.6% last month. 10 Year Treasury Yields rose 2 basis points and are again approaching the key 3% ahead of next weeks Fed Meeting. In contrast, the Weekly Jobless Claims rose to 368k from 298k last week with these weak numbers appearing to be distorted by seasonal adjustment.
This morning on the economic front we have UK Current Account Balance, Public Finances and most importantly GDP at 9.30 am. This is followed at 10.00 am by Euro-Zone Consumer Confidence and US GDP at 1.30 pm.
December S&P 500
The S&P worked really well yesterday as the market tried to trade lower before having a nice spike in the late afternoon and despite been weak into the close is back above the key 1775 level this morning at 1780. The S&P is still at the bottom of the Bollinger Band but finally the Williams Index has started to turn higher. The market traded down to my 1775 buy level before having a nice rally and I was able to cover this position at 1781 and I am now flat. Today I will be a buyer on any dip to 1771/1775 with the same 1769 stop. If I am taken long and subsequently stopped out I will be a more aggressive buyer on any dip to 1760/1764 with a 1757 stop. Given that we have the contract expiration and FOMC Meeting next week I do not want to be short the market at this time.
Euro/USD
No change as I am still flat the Euro preferring instead to have my long US Dollar position via the US Dollar Index. I am long the March Index at 79.90 and I am trying to turn this position into a macro position as I believe the US Dollar is very undervalued. With the exception of the Euro, and to a certain extent Sterling, so far the other currencies in the basket have weakened and some substantially against the US Dollar over the last few weeks.
December DAX
After I posted yesterday morning the Dax was trading at my 9000 buy level before following the S&P higher in the afternoon up to a new high for the day at 9063. I covered my long position at 9045 and I am now flat. The key level for the Dax is 8980 as a break and close below this level will be bearish. Today I will be a small buyer from 8970/8990 with a 8955 stop. If the Dax starts to break down I will look to set up a short position with a 9010 stop on any short position taken.
December FTSE
The FTSE also worked well yesterday as the market was trading at my 6440 buy level just after I posted and after a nice rally I was able to cover this position at 6470 and I am now flat. I still think the FTSE will have a rally into year end especially considering the fact that it has so far under performed the other major indices since June. Today I will be a buyer on any dip to 6405/6425 with a 6390 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The Dow traded down to my 15750 buy level and so far my 15695 stop has not been hit. The Dow is still very oversold and I am going to stay long with my small position with the same 15695 stop.
March BUND
The Bund plan worked well yesterday as after a nice rally in the morning I was able to cover my 140.05 long position at 140.35 and I am now flat. Today I will be a small buyer of the Bund on any dip to 139.60/139.80 with a 139.35 stop. I still do not want to be short the Bund at this time.
Gold Rolling Contract
Just as I posted yesterday morning Gold started to get hit to the downside I bought it at 1243 and I was very quickly stopped out of this position at 1235 and I am now flat. Yesterday was another great example of how important it is to have stops in the market as Gold is continuing to trade lower this morning. My ideal level at which to buy Gold is against last June’s low is 1180 and today I will be a buyer on any dip to 1182/1195 with a 1174 stop.
Silver Rolling Contract
My view that I thought that Silver had put in some sort of a reasonable bottom over the last week got blown out of the water yesterday with Silver falling 4.2%. As I posted, Silver was trading at my 20.00 buy level and I was just like Gold above I was very quickly stopped out of this position at 19.70 and I am now flat. The next key support is from 18.70/18.90 and I will be a small buyer here with a 18.40 stop.
Recent Comments