Apologies for the delay in today’s update but we had serious internet outage issues earlier.
Stock markets finished the day on a positive note yesterday but unfortunately this morning the markets are well down on the back of House Speaker John Boehner scrapping plans to allow higher tax rates on annual incomes over $1 million, yielding to an anti tax resistance within his own party and throwing already stalled budget talks deeper into turmoil. House members and senators will not vote on the end of year budget issues until after Christmas giving them less than a week to reach agreement to avert tax increases and spending cuts set to take effect in January. The partisan divide hardened yesterday, making the path to deal more uncertain. The S&P dropped 3.4% earlier this morning on this news and is now down 1.6% as I write this commentary. The failure cast doubt on Boehner’s ability to navigate the competing political and legislative forces bearing down on him and as a result weakens the entire Republican party. This morning we have UK GDP and later in the US we have Durable Goods Orders, Personal Income, Chicago Fed National Activity Index and Univ of Mitch Consumer Confidence.
These economic releases will be over shadowed by the Fiscal Cliff and today is triple witching expiration for all the December Contracts and likely to be a very volatile day.
March S&P 500
I am very glad that I said yesterday to take profit in front of 1440 as we traded up to 1441 into the close before the wheels came off big time with the Fiscal Cliff setback as we have already been down to 1385 early this morning. I took a nice profit at 1438 on my 1430 long from yesterday and thankfully I am now flat. We have a large Gap down and normally I would be a big buyer here but as its is Triple Witching Friday and it’s only four days before Christmas I am loathe to put on this trade. Today I will be a very small buyer from 1415/1420 with a 1408 stop and I will use my 5 Handle buyback rule only once if I am stopped out of any long position and be very careful with trading today.
Euro/USD
The Euro worked out really well yesterday as we traded up to my sell level with a 1.3290 high after lunch. I went short at 1.3280 and took a nice gain at 1.3220 on this position and I am now flat. This morning I will still be a seller on any rally back to the 1.3270/1.3295 area with a 1.3315 stop on any short position. As the market is in my long term target area I do not want to be long at this time.
March Dax
The Dax has rolled this morning to the March Contract with a 10 point premium. The market never reached my sell level yesterday and I have no position. As the Dax is closed on Monday and does not reopen until next Thursday I am going to stay flat as it is too risky to have an open position for four days with all the Fiscal Cliff news.
Gold Rolling Contract
Gold finally traded down to my buy level and I am long from 1642. I will raise my stop to 1634 which is just below yesterdays low and I will look to take profit on any rally to 1655/1660.
Silver Rolling Contract
I was stopped out of my 31.10 long position at 30.5 yesterday afternoon and I am now flat. The market is very oversold and this morning I am a small buyer on any dip to 29.40/29.70 with a 29.00 stop.
Please note I will do a small commentary on Monday as I look to digest what comes out of the Fiscal Cliff today and over the weekend.
Recent Comments