European Equities open higher this morning as Greece wins easier terms on it’s debt. European Finance Ministers eased the terms on emergency aid for Greece declaring, after three years of false starts, that Europe has found the formula for nursing the debt stricken country back to health. In the latest bid to keep the 17 nation Euro intact the Ministers cut the rates on bailout loans, suspended interest payments for a decade, gave Greece more time to repay and engineered a Greek Bond buyback. The country was also cleared to receive €34 billion loan installment by December. Euro-Zone Finance Ministers presented the agreement, blessed by the IMF and ECB, as a milestone in fighting the debt crisis that has shaken the Euro much as the first two Greek loan packages were once touted as solutions. In the US the Black Friday Thanksgiving Sales were reported to be 16% higher in the four days from November 22nd. The markets are still worried about the Fiscal Cliff with just 35 days to go before the tax rises and spending cuts kick in with the Administration and Republicans getting down to the nitty gritty detail from this week. In the UK, Chancellor of the Exchequer George Osborne announced that Mark Carney who is currently the Governor of the Bank of Canada will be the next Governor of the Bank of England.
Today the OECD releases its Economic Outlook with updated forecasts. This morning we have UK GDP followed in the US by Durable Goods Orders, Case-Shiller and FHFA House Price Reports as well as the Consumer Confidence Index and the Richmond Fed Manufacturing Index.
Dec S&P 500
The S&P having been down all day and just missing my 1392 buy level rallied strongly into the close led by a 3% gain in Apple. My 1407 sell level was hit overnight and I have covered this position this morning at 1405.5 as I still think that all or some of the 1413/1421 Gap will be filled before we go lower. This morning I do not want to be long here as the percentage of S&P 500 stocks over their 10 Day Moving Average rose to 89.4% on Friday and closed
at 86.8% yesterday which indicates how overbought the market is. This morning I will be an aggressive seller from 1414/1420 with a 1424 stop. I have to leave a larger stop given how big this open Gap is.
Dec DAX
The Dax worked really well as we traded down to my 7275 buy level and I took a nice gain this morning at 733.5 and I am now flat. I am still a buyer on dips and I will look to reset my long position on any dip to 7290/7310 with a 7270 stop which is just below yesterdays low. I will also be a seller from 7380/7400 with a 7420 stop.
Dec BUND
The Bund did not trade down to my buy level yesterday but it had a Gap down this morning on the back of the higher Equities due to the Greek bailout. I went long at 141.95 and I will leave a 141.60 stop on this position. I will also look to take profit in front of 142.40.
Dec FTSE
The FTSE also worked really well yesterday and I went long the market at 5790. I have taken profit this morning at 5818 and I did not like the price action and I thought that the FTSE would be a lot higher. I will also look to go short on any rally to 5820/5835 with a 5845 stop. I do not want to be long at this time.
Euro/USD
The Euro finally hit my 1.2995 sell level overnight and I am now short with a 1.3030 stop. The Euro is very overbought, outside its Bollinger Band and at the top of the Williams Index and hopefully today these indicators will start to kick in.
NASDAQ 100 Rolling Contract
Unfortunately I was stopped out of my 2605 short at 2640 last night and I am now flat. Apple has now rallied from $505 to $588 in just over a week. We still have an open Gap in the Nasdaq at 2681 and I will be an aggressive seller on any further rally to 2675/2685 with a 2700 stop.
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