Yesterday the US Veterans Day holiday led to quiet trading markets and this was compounded by the absence of substantial news-flow. US Stock markets were open and closed with minor gains of less than 0.1%. The US Cash Bond market was closed but the Futures market was open implying a slight rise in yields from the close last Friday. The Euro ended the day slightly higher (but but is back down this morning) on reports that at least a quarter of ECB Governing Council Members opposed last week’s cut to the refinancing rate. Sterling is back on the defensive again ahead of tomorrow’s Inflation Report. The Financial Times had a report in yesterday’s paper that the Chinese Government were considering lowering its growth target to 7% in 2014 from 7.5% currently. Otherwise yesterday was a non event but today is a busier day for economic data.
This morning we have UK CPI and the ONS House Price Index and this is followed from the US by the NFIB Small Business Optimism and the Chicago Fed Manufacturing Index. Later this afternoon we have Fed Members Kocherlakota and Lockhart both speaking on the economy.
December S&P 500
Yesterday was probably the quietest trading day of the year so far with the S&P trading in only a 5 handle range as most traders took the day off for the Veterans Day Holiday. At least today we have some economic news flow later which will hopefully lead to a more volatile trading day. After I posted yesterday the S&P traded up to my 1770 sell level before having a small sell off and I covered this position at 1767 and I am now flat. The S&P is now controlled by two important levels, 1770 on the topside and 1740 on the downside and a break and close above or below one of these levels will lead to a large move. Today I will be a small seller from 1772/1775 with a 1777 stop, whilst I will leave my buy level the same at 1758/1762 with a 1755 stop. If the S&P closes over last Thursday’s high at 1775 I will then look to buy the market as I will look for the S&P to trade up to at least the 1800/1810 resistance area.
Euro/USD
No change as I am still a buyer from 1.3300/1.3330 with a 1.3285 stop. I will also leave my sell level the same at 1.3450/1.3480 with a 1.3510 stop.
December DAX
The Dax just missed my 9070 buy level after I posted yesterday morning before trading higher. Today I will raise my buy level slightly to 9050/9080 with a 9035 stop as I look for the Dax to retest last week’s 9197 high where I will be a small seller with a 9220 stop.
December FTSE
The FTSE worked well yesterday as shortly after I posted the market traded down to my 6695 buy level and after a nice rally I was able to cover this position at 6720 and I am now flat. Today I will leave my buy level the same at 6670/6695 with a 6655 stop. As long as the FTSE stays over 6670 the market is okay but a break and close below 6670 will be bearish.
Dow Rolling Contract
Just like the S&P above the Dow had a very narrow trading range yesterday. Today I will raise my sell level slightly to 15850/15880 in small size with a 15910 stop. I still do not want to be long the Dow at this time.
December BUND
The Bund also just missed my buy level yesterday but is opening lower this morning as the US Treasury Yields are higher. Today I will leave my buy level at 139.90/140.10 and if the Bund trades down to this level I will be a reasonable buyer with a 139.70 stop. I still do not want to be short the Bund at this time.
Gold Rolling Contract
Gold is trading at the bottom of its Bollinger Band and Williams Index and today I will raise my buy level to 1260/1267 in small size with a wider 1248 stop. I have to use a wider stop as 1250 is extremely good support. As I mentioned yesterday a break and close below 1250 will be very bearish and opens up a possible test of June’s low at 1180.
Silver Rolling Contract
Silver traded down to my 21.25 buy level yesterday and I am still long. Silver is also trading at the bottom of its Bollinger Band and Williams Index. I will leave my stop the same at 20.80 on this position and if I am stopped out I will be a more aggressive buyer on any dip to 20.10/20.50 with a 19.85 stop.
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