Equities and commodities were generally higher but more so in Europe than in the US where confidence has been dented by the Fiscal Cliff worries. US House Republican leader John Boehner said that the President needs to ‘get serious’, a comment that sent the markets and Euro lower for a brief period before recovering lost ground. In a Bloomberg survey earlier this week 75% of the people polled expect some sort of deal which will avert the Fiscal Cliff for now. Markets remain sceptical that a so-called grand bargain of $4 trillion in deficit cuts over the next four years can be ironed out. Over 50% of the participants in this survey expect either no or a negative market reaction to a deal expecting US lawmakers to kick the can down the road to avert the Fiscal Cliff for 2013 but still leave unsolved the medium term debt and deficit challenges. In the US, Pending Home Sales came in at +5.2% versus 0.8% expected and US GDP was revised up to 2.7% from 2%.

This morning we have Retail Sales from Germany and Euro-Zone CPI ahead of GDP for Canada. In the US, we have Personal Income and Spending, November Chicago PMI and NAPM.

Dec S&P 500

Unlike Wednesday, the S&P worked really well yesterday as we traded up to my 1418 sell level and, thanks to comments from John Boehner as outlined above, the market had a quick fall to 1407 before recovering. I took a nice gain at 1410 on my 1418 short and I am now flat. Until this Fiscal Cliff is sorted we are prone to quick moves in the market due to comments from the various parties involved in the issue. The S&P is approaching the top of it’s Bollinger Bank and Williams Index and has almost filled the Gap from Nov 7th. Today I am a seller from 1421/1425 with a 1428 stop and I will also be a buyer on any dip to 1405/1409 with a 1402 stop.

Dec DAX

The Dax was very quiet until the comments from Boehner which led to a sell off to my 7375 buy level. I covered my long position at 7400 and I am now flat. The reason I have covered my position is because the 7400/7450 level is very strong resistance and we have rallied nearly 500 points in two weeks. This morning I am a small seller from 7430/7450 with a 7470 stop. I am only interested in buying the market if we drop down to 7310/7330 with a 7295 stop.

Dec BUND

The Bund traded up to my sell zone and I am short at 143.00. I will lower my stop to 143.20 and I will look to take profit on any dip to 142.50/142.60. If the Bund drops down to my profit zone and subsequently rallies I will be a seller from 143.20/143.40 with a 143.60 stop.

Euro/USD

The Euro worked perfectly yesterday as we traded up to my 1.2995/1.3020 sell zone with a 1.3016 high before having a nice sell off down to 1.2950. I sold the Euro at 1.3000 and took a nice gain at 1.2960 and I am now flat. This morning the Euro is back above 1.300 and as I have been saying for the last two months I think we will have one look at the 1.3250/1.3400 area where I will look to put on a longer term short position. This morning I am a small seller of the Euro on any rally to 1.3040/1.3060 with a 1.3080 stop as we are overbought here.

Nasdaq 100 Rolling Contract

No change, I am a small seller from 2690/2700 with a 2720 stop as I think Apple is trading heavy here after its huge rally over the last 2 weeks.

Dec FTSE

Unfortunately I was stopped out of my 5850 short position at 5875 before the comments from Boehner and I am now flat. The FTSE is approaching overbought levels and today I am a small seller on any rally to 5895/5915 with a 5930 stop.