The main news last Friday was the unexpected upward revision to US Q3 GDP to 4.1% from 3.6% against an unchanged expectation. although about a third of the Q1 rise represented inventory accumulation, in this instance, this looks to reflect rising confidence in future demand strength. In fact the bulk of the upward revision came from personal consumption expenditure, now put at 2% from 1.4%. Less encouraging but largely overlooked was the fall in the Kansas City Fed Manufacturing Index to -3 from +7 last month.
The GDP revision helped propel broad based stock market gains led by the NASDAQ which rose another 1.15% whilst the S&P and Dow rose 0.5% and 0.25% respectively. Markets are higher this morning after the IMF’s decision over the weekend to upgrade it’s outlook for the US Economy in 2014. IMF President, Christine Lagarde said in an interview yesterday that the IMF is raising its outlook for the US Economy as there is a budget deal in Washington and the fact that the Fed has started to taper eases doubts about the future.
Today is very quiet for economic data with European markets mostly closing at 1pm and not re-opening again until next Friday. At 1.30 pm we have US Personal Income and Spending whilst at 2.55 pm we have the University of Michigan Survey which is seen rising to 83 from 82.5 last month. This is followed by the Chicago Fed National Activity Index.
Tradernoble.com Christmas Arrangements
With the European markets closed from today until Friday and the US markets on a half day tomorrow and closed all day Wednesday my next update will be next Friday the 27th December.
Finally I would like to wish all members a very Happy Christmas and to thank everybody for their continued support during the past year.
March S&P 500
The S&P rose another 0.5% on Friday to close at yet another record high as optimism remains sky high towards the US stock market as we approach the final week of trading for 2013. I was very unlucky again on Friday as the market just missed my 1800 buy level with a 1802 low as we are now trading over the 1820 level. At least we have not been short the market during this blow off move higher. Today the S&P is at the top of the Bollinger Band and Williams Index and is now overbought on both a Daily and Weekly basis. However given that this is a seasonally strong time of the year it makes it very difficult to short the market. The fact that we are so overbought I will try a small short on any rally to 1824/1828 with a 1831 stop. I will also be a small buyer on any dip to 1810/1814 with a 1807 stop.
Euro/USD
Late on Friday the Euro traded up to my 1.3680 sell level and I am now short in small size with the same 1.3720 stop. If the Euro trades lower this morning I will probably cover my position especially with European markets closed from lunch time today until next Friday.
I am still long the March US Dollar Index at 79.90 and so far my target profit level of 80.50 has not been hit. Given the fact that the markets will closed for the next few days I have decided to cover this position at 80.60 and I am now flat.
March DAX
The Dax just missed my 9350 buy level on Friday before following the S&P higher and I am still flat. The market will close at 1 pm today and does not re-open until 7 am on Friday and for this reason I am going to stay flat as I do not want to have an open position with no access to the market for 3 1/2 days.
March FTSE
In contrast to the Dax, shortly after I posted on Friday the FTSE traded down to my 6530 buy level and after a nice rally I was able to cover this position at 6580 and I am now flat. The FTSE is open all day today and closes tomorrow at 12.30 pm and will also re-open on Friday. Today I will be a small buyer on any dip to 6525/6550 with a 6510 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
Late on Friday the Dow traded up to my 16270 sell level before stopping me out of this position early this morning for a small loss at 16295 and I am now flat. The Dow is extremely overbought as the market is now up nearly 1600 points since the mid-October low. Today I will again be a small seller on any rally to 16310/16340 with a tight 16360 stop.
March BUND
The Bund worked well on Friday as shortly after I posted the market traded down to my 139.50 buy level before having a nice rally and I was able to cover this position at 139.85 and I am now flat. As the Bund also closes today at 1pm I am going to stay flat and take another look on Friday.
Gold Rolling Contract
No change as I am still long in small size at 1203 and 1190. Today I will raise my stop to 1185 which is just below last week’s low and if I am stopped out I will be a more aggressive buyer on any dip to 1170/1180 with a 1162 stop.
Silver Rolling Contract
No change as I am still long from 19.20 with the same 18.70 stop.
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