Markets ended the day in the US on their lows despite good Economic data as the focus returned to the Fiscal Cliff after Wednesday’s FOMC meeting. Republican House Speaker Boehner said that President Obama is only focusing on tax hikes and is not serious about cutting spending. He claimed that Obama appears willing to slow-walk the economy right up to and over the Fiscal Cliff. Boehner continues to resist tax increases despite polls showing that most Americans are siding with the Democrats and that the Republicans will be blamed if no deal is reached. Following Bernanke’s comments during the press conference on Wednesday that the Fed could not fully offset a Fiscal Cliff plunge and Boehner;s latest comments more than offset some very good US Economic data yesterday. Retails Sales rose 0.3% whilst Jobless Claims fell 29k TO 342k as the data is now clear of Hurricane Sandy. There was also some good news in Europe with European Finance Ministers formally releasing the latest tranche of bailout funds to Greece worth €40.1 billion as Greece will receive most of these funds in the next few days. Ministers also agreed on a framework for a common banking supervisor agreeing a deal to give the ECB new powers to supervise Euro-Zone banks, the first step towards a banking union. This morning on the economic front we have in the Euro-Zone we have Manufacturing PMI for December and CPI for November. This is followed later in the US by CPI at 1.30pm and Industrial Production at 2.15pm.
Dec S&P 500
For the first time in a long while both sides of my buy and sell levels happened in a short time frame as continued news over the Fiscal Cliff dominates the intra day moves. Before the Jobless nos were released I was filled on my buy side at 1424 and I took a nice gain and went short at 1431. I covered this short position at 1422 and I am still flat. For the
second day in a row the S&P has had a very weak close, which is a worry, coupled with a similar reaction to QE3 in September,with the Feds latest stimulus package on Wednesday the market looks to have put in a temporary top. Today is also the Friday before a triple witching expiration of the December futures and options contracts next week and generally what ever low is put in today is the market low ahead of this expiration. This morning I am a buyer on any dip to 1415/1419 with a 1413 stop and if I am stopped out I will use a subsequent 5 handle rally from whatever low is put in to re-buy one time with a stop below the preceding low point.
Euro/USD
The Euro traded up to my sell level and I went short at 1.3090. I will lower my stop to 1.3125 which is just above today’s high and I will look to to take profit on any dip to 1.3030/1.3050.
Dec FTSE
The FTSE continues to trade in a tight range and I took profit last night at 5720 on my 5740 short from yesterday morning and I am now flat. Today I will look to reset my short position on any rally to 5750/5765 with a 5775 stop.
Gold Rolling Contract
Gold traded up to my 1702 sell level and I will leave my stop the same at 1715 on this position. It is interesting to see how weak Gold is trading considering how weak the US Dollar is. If Gold falls I will look to to take profit from 1680/1685.
Dec Dax
No change from yesterday as I still want to go short from 7620/7640 with a 7650 stop and I will also look to buy the market if we dip down to 7530/7550 with a 7525 stop.
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