The US Equity markets ended the week on a slightly weaker tone after US Retail Holiday Sales rose 2.3% to be in line with a prediction for the weakest Holiday results since 2009. Sales at brick-and-mortar stores on Thanksgiving and Black-Friday rose to $12.3 billion according to a report from Shopper Trak the Chicago based researcher who reiterated its prediction that Sales for the entire season will gain 2.3% for the smallest increase since the last recession. Retailers offered more and steeper deals on merchandise from flat screen televisions to crockpots that, while luring shoppers may ultimately hurt 4th quarter earnings. The Dow and S&P 500 both ended the day down 0.07% whilst the NASDAQ rose another 0.37%.
Last week was probably the quietest trading week since I can remember and certainly for 2013 so far. At least the US will be back to work today and hopefully we will see some volatility ahead of the Non Farm Payrolls which are due on Friday. Over the weekend China released its latest Manufacturing Index which showed Chinese Manufacturing growth beating analysts estimates in November and indicating the Nations economic recovery is sustaining momentum amid Government efforts to rein in credit growth.
This morning on the economic front we have UK and Euro-Zone Manufacturing PMI ahead of US Construction Spending and ISM Manufacturing at 3 pm. Before the US data is released Fed Chairman Bernanke is due to speak on the economy.
December S&P 500
Shortly after the S&P opened in Chicago the market made a new high of 1812 before spending the rest of the day trading quietly lower before selling off just before the close mainly due to the Retail Sales rising less than expected for Black Friday. I was able to cover my short 1809 position at 1804 and I am now flat. As I mentioned all last week the S&P needs to break and close over 1815 for the market to be able to sustain this incredible run. Today I will be a small seller form 1808/1812 with a 1816 stop. My only interest in buying the market is on a dip to 1793/1797 with a 1791 stop.
Euro/USD
The Euro has traded in a very narrow range over the last week and I would expect volatility to pick up ahead of the ECB meeting and press conference from Dragi on Thursday. Today I will still be a small seller on any rally to 1.3640/1.3670 with a 1.3695 stop. I will also be a buyer on any dip to 1.3520/1.3550 with a 1.3495 stop.
December DAX
The Dax made yet another record closing high last Friday. The market traded up to my 9425 sell level and as I did not want to hold a Dax position over the weekend I covered at 9410 near the close and I am still flat. It is still trading at the top of the Bollinger Band and Williams Index and even the RSI is overbought at this stage. The Williams Index has still not given a sell signal making it very difficult to go short for any length of time. Today I will be a small seller from 9440/9460 with a 9475 stop. My only interest in buying the Dax is on a dip to 9320/9350 with a 9295 stop.
December FTSE
Shortly after I posted on Friday the FTSE traded up to my 6675 sell level before following the S&P lower enabling me to cover this position at 6645 and I am now flat. The FTSE continues its theme of under-performing its European counterparts despite having the stronger economic data. Today I will still be a small seller on any rally to 6660/6675 with a tight 6690 stop. Given how weak the FTSE is trading I still do not want to be long at this time.
Dow Rolling Contract
No change as I am still short in very small size at 16140 with the same 16205 stop as I am still looking for this 13 year trendline to hold.
December BUND
The Bund traded down to my 141.55 buy level on Friday. I am still long and I will raise my stop to 141.35. If I am stopped out I will be a more aggressive buyer on any dip to 140.90/141.10 with a 140.75 stop.
Gold Rolling Contract
No change as I am still a buyer on any dip to 1232/1238 with the same 1228 stop. If I am stopped out I will be a very aggressive buyer on any dip to 1182/1202 with a 1175 stop.
Silver Rolling Contract
Silver has had its quietest trading week all year and I will give this market one more day to rally or I will cut the rest of my long 19.60 position. I will still leave a break-even stop on this position and if I am stopped out I will still be a buyer on any dip to 19.20/19.40 with a 18.95 stop.
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