Yesterday was one of the quietest trading sessions of the year to date caused mainly by the US markets closed for Thanksgiving. As a result the only news of note happened in Europe. The Bank of England Governor Mark Carney took action to restrain the UK’s house price boom by ending incentives to mortgage lending in a package aimed at cutting evolving risks to financial stability. Carney told reporters in London yesterday that this will help the housing market on a sustainable path and ensure the broader economy continues to receive the stimulus it needs for as long as it needs to sustain the recovery. The Pound Sterling rose and construction stocks fell as Carney unveiled changes to the Central Bank’s funding for lending scheme that will mean it will only apply to business loans from 2014 and will no longer be available to household borrowing.
European stock markets rose yesterday after the latest Euro-Zone Economic Confidence showed a rise to 98.5 from 97.7 in October, beating the 98.0 expected, and rising to the highest level since August 2011.
German Inflation rose from an 18 month low yesterday as a report showed Consumer Prices increased more in November than economists had forecast thus dampening the prospect of further ECB stimulus. German Unemployment released yesterday showed a rise for the 4th month in a row whilst the Euro-Zone Unemployment rate has now risen to a record 12.2%.
On the economic front German Retail Sales released earlier this morning showed a fall of .08% which was worse than expected. At 9.30 am we have UK Mortgage Approvals and BoE Consumer Credit. This is followed at 10.00 am by Euro-Zone CPI. With the US markets only open for a half day we have no economic data releases scheduled for today.
December S&P 500
Today in the States is known as Black Friday where the American Consumers go shopping from the early hours and this is one of the biggest and most important shopping days of the year. Most shops will open before 5am. The cash S&P closes at 6pm Irish time and the futures close 15 minutes later. It will be Monday before markets get back to real trading as there will be very few traders at their desks today. Sentiment readings continue to be at near all time highs and yesterday the S&P traded up to my 1809 sell level and I am now short in small size with a tight 1815 stop I have no great confidence in this trade as we are still in the seasonally positive trading environment which runs until Monday. As I said yesterday a break and close over 1815 will be bullish and we could see the S&P trade up to 1825/1830 and possibly as high as 1840/1850 before sellers return. Given how overbought this market is I do not want to be long at this time.
Euro/USD
No change as I am still a seller on any rally to 1.3640/1.3670 with a 1.3695 stop. I will also look to buy the market on any dip to 1.3520/1.3550 with a 1.3495 stop. The US Dollar Index looks interesting again and I will be a buyer on any dip to 8010/80.40 with a 79.80 stop.
December DAX
More bad economic news out of Germany yesterday and yet the Dax makes another new record high. We are certainly not trading economic news in these markets at the moment. The Dax is still trading at the top of the Bollinger Bnad and Williams Index but as of yet we still do not have a sell signal on the Williams. Today I will leave my sell level the same at 9425/9450 with a 9460 stop. I will also leave my buy level the same at 9320/9340 with a 9295 stop.
December FTSE
Shortly after I posted the FTSE traded up to my 6670 sell level and after a small sell-off I was able to cover this position at 6650 and I am now flat. Today I will still be a small seller on any rally to 6675/6690 with a tight 6700 stop.
Dow Rolling Contract
No change as I am still short in very small size at 16140 which is just in front of the 13 year trendline that I have mentioned over the last week. I will leave my stop the same at 16205 as I want to try and give this trade some room to breathe.
December BUND
The Bund worked well yesterday as the market had a nice rally and I was able to cover my 141.25 long position at 141.65 and I am now flat. The Bund is trading higher this morning and I still want to buy it on any dip. Today I will be a buyer from 141.40/141.55 with a 141.30 stop.
Gold Rolling Contract
Gold just missed my 1236 buy level yesterday before trading higher. Today I will raise my buy level slightly to 1234/1240 with a 1228 stop on any long position.
Silver Rolling Contract
No change as I am still long at 19.60 with the same breakeven stop.If I am stopped out of this position I will still be an aggressive buyer on any dip to 19.20/19.40 with a 18.95 stop
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