The pre-Christmas general recovery in global risk sentiment showed some signs of fragility yesterday as we approach the year-end. China fears again come to the fore with the thought that coming end to a six month ban on the sale of shares by pensions owning more than 5% will prompt a new race to exit stocks.
For anybody following my New Platinum Service it lost 20 points last Thursday but is still ahead by 2032 points for December. The previous six months saw gains of 1510, 1600, 2833, 2195, 1810 and 3045 points respectively. If anyone is interested in my Platinum Service please click on the Membership Link on my tradernoble.com website for details.
This fear triggered a 2.6% decline in the Shanghai Composite which rippled through Asia and then to the European Markets that were open with the latter loosing an average of 1%. The US Stock markets suffered on the open with the Dow loosing over 100 points before recovering to close on the Day’s high and basically flat from last Thursday. Trading volumes on Exchanges are thin down by nearly 50%, and this is not helping the few windows of positivity.
Oil fell by 3% yesterday with the trigger being a soft confirmation of Iran planning to add 500,000 barrels a day to supply levels once sanctions are lifted. Also adding to the declines were profit takers selling after the recent strong gains. Gold closed lower while Iron ore was higher.
There was good news for some in the Commodity sector with energy bankers and restructuring specialists the hottest property on the jobs front given the large number of of M&A deals occurring and high-yield corporates getting into strife.
On Currencies the Canadian Dollar was again the weakest performer given the Oil price and this has filtered through to the Russia where the Rubble has broken 70 to close at 72 and a new record low.
This morning Stock markets are opening strong after the PBOC said it will maintain prudent policy and will use whatever tools necessary to maintain appropriate liquidity.
This morning on the economic front we already had the release of Spanish Retail Sales which came in at 3.3% but well below the 4.6% expected and 6% rise that we had last month.
The only other data of note due today is the Dallas Fed Services Index at 3.30 pm
March S&P 500
Unfortunately after the S&P traded higher to my 2047.50 sell level last Thursday before I was stopped out of this position near the highs of the day at 2054 before the market sold off aggressively in the last few minutes of trading. That sell-off continued yesterday when the markets re-opened with the S&P trading to a 2035.75 low print before rebounding into the close and this rebound has continued this morning with the S&P currently trading at 2056. We now have a large ‘Open Gap’ from yesterday’s Chicago close at 2047. I still believe the S&P will run into a brick wall of resistance in early January especially with the US Economy beginning to slow. However given the strong seasonal time of the year the market can still rally further ahead of next week when normal trading will resume on Monday for the start of 2016. Today I will again look to go short on any further rally higher to 2065/2070 with a 2075 stop. I will also be a small buyer on any dip lower to 2044/2049 with a 2039 stop.
EUR/USD
The Euro plan worked well on Thursday with the Euro trading lower to my 1.0875 buy level before having a nice rally into the close which enabled me to cover this position at my 1.0920 T/P level and I am now flat. The Euro rally continued yesterday with the Euro currently trading just below 1.10. The next few days are going to be key for the Euro because if the Euro can close over 1.1070 on Thursday it will be a Key Month Reversal which in itself is very rare and will be extremely bullish. If this happens then we will see the Euro hit my 1.15/1.18 target that I have mentioned over the past few weeks. Today I will again look to buy the Euro on any move lower to 1.0920/1.0950 with a 1.0870 stop.
March Dollar Index
The Dollar is also on course for a Key Month Reversal and a close below 97.20 will confirm this. With the markets so illiquid at this time anything can happen and so the next three days will be key. I am still flat the Dollar and today I will lower my sell level to 98.30/98.60 with a 98.90 stop.
March DAX
The DAX was again volatile in yesterday’s trading session with the market closing near its low print for the day before rebounding by 1% this morning. Today I will be a small buyer on any dip lower to 10650/10710 with a 10595 stop. Despite the stronger Euro I do not want to be short the DAX at this time.
March FTSE
Soon after I posted last Thursday the FTSE continued its rally with a 2.5% gain for the day. I am still flat the market and today I will raise my buy level to 6150/6180 with a 6125 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The Dow traded to a 17440 low yesterday afternoon before rallying nearly 180 points and I am still flat. Today I will move my buy level higher to 17410/17470 with a 17365 stop. I will also look to go short on any rally higher to 17950/18010 with a 18040 stop.
March BUND
The BUND rallied strongly yesterday after the market reopened after closing near its lows last Wednesday. I am still flat the BUND and today I will look to go short on any further rally 158.85/159.15 with a 159.40 stop. I still do not want to be long the BUND at this time.
Gold Rolling Contract
No change as I am still a small buyer on any dip lower to 1055/1062 with a 1046 stop which is just below the low made 10 days ago.
Silver Rolling Contract
No change as I am still long at 14.27 with the same 13.80 stop.
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