Markets ended up making small gains yesterday despite some early weakness as markets responded to the weekend’s news that Italian Prime Minister, Mario Monti, would step down. European Markets lost ground early, the Italian FTSE, the MIB was down 3.8% at one point with a weak No for French Industrial Production of -0.7% versus +0.2% expected adding to the gloomy sentiment. Italian Government Borrowing costs rose sharply with 10 Year Bond Yields up 30bps to 4.82%. However comments from Monti that elections will produce a highly responsible Government had some positive effect on confidence. Italian stocks recovered some ground to close 2.2% lower, whilst most European Equity markets closed with some gains. While deposed PM Berlusconi had vowed to stand for election on anti-austerity and anti German Platform, investors took comfort that Monti himself may end up running to head him off. The US markets were helped by improved confidence on the Fiscal Cliff negotiations after President Obama and House Speaker Boehner met on Sunday for the first time in 23 days. Both sides said that the lines of communication remain open.
This morning we have the very important ZEW Survey from Germany at 10.00 and this is expected to show a small improvement from last month, while Spain and Greece have bill auctions. Later in the US we have October Trade Data and the November Small Business Optimism Index.
Dec S&P 500
Unfortunately the S&P just missed my 1410 buy level with a 1410.75 low as the market is following my roadmap in looking for a rally into tomorrows FOMC meeting. As I said yesterday, I am very reluctant to be short the market as it is seasonally the strongest time of the year as investors always look for a strong finish into year end. This morning I will still leave my sell level the same at 1424/1428 with a 1431 stop. This 1425/1430 is key and a closing break over this level will be short term bullish. I will also look to buy the market on a dip to 1412/1416 with a 1408 low which is just below the low made yesterday and last Friday.
Nasdaq 100 Rolling Contract
The Nasdaq rallied as expected and I took a nice gain at 2657 on my 2627 long from yesterday morning. Apple continues to weigh on the market as the Dow continues to make a new recovery high but the Nasdaq and S&P fail to follow suit. Today I will leave my buy level the same at 2620/2630 with a 2605 stop. If I am taken long I will still look to take profit from 2650/2660. It will very interesting to see how Apple performs if it trades back to its $505 low made three weeks ago.
Dec FTSE
No change as I am still short from 5925 with the same 5940 stop.
Euro/USD
The Euro worked really well as my 1.2875 support level held. I went long at 1.2890 and I took a nice gain at 1.2940 and I am now flat. This morning I am going to raise my sell level to 1.2980/1.3005 with a 1.3020 stop. I will also look to reset my long position from 1.2875/1.2900 with a 1.2865 stop.
March BUND
This morning I want to lower my sell level to 145.90/146.10 with a 146.25 stop which is just above the highs made yesterday.
Dec DAX
Despite how overbought the Dax is it is refusing to give up much ground and today I am a small buyer from 7500/7525 with a 7490 stop. I do not want to be short at this time
Recent Comments