Not a big 24 hours as far as market movements are concerned, one extension of a theme being the continued ascendancy of the US Dollar that has gained a little more momentum, the Bloomberg Spot Dollar Index closing up 0.12%. The US Dollar notched up some gains against the Euro, Aussie, and Kiwi, the AUD down 0.38% and the NZD off 0.33%. Exceptions were the Oil-driven currencies, the Canadian Dollar steady while the Norwegian kroner rose, the NOK rising 0.49% with world Oil prices recovering a little ground yesterday.
For anybody following my New Platinum Service it made 135 points yesterday and is now ahead by 480 points for November. The previous five months saw gains of 1600, 2833, 2195, 1810 and 3045 points respectively.
The AUD sits at around 0.7020 in early trade this morning, off its overnight lows amid a choppy past 24 hours for equities in Europe and the US, some decline in the S&P 500 VIX index, but softness in LME metals prices, while Copper down 0.78%.
The only data of note yesterday was the US NFIB Small Business Optimism Index for October that was flat at 96.1 against expectations of a small rise. The Dollar-supportive element of this report is that net compensation plans reported by US small business ticked a little higher, the net balance increasing from 16 to 17% the equal highest in this up cycle, a hint of a tightening US labour market. This is the sort of evidence Fed would be looking for the lead up to still likely December Fed rate lift-off.
As I reported yesterday, the Portuguese Government has now capitulated with the formation of the left wing coalition of parties. It remains to be seen whether this change of Government reportedly on an anti-austerity platform will cause another bout of volatility as far as the Euro is concerned; it bears very close watching. So far at least, the Euro has been affected little, mainly on the back foot yesterday but at the expense of the US Dollar.
This morning on the economic front we have UK Unemployment at 9.30 am. Ahead of this release there is some meaty potential event risk lies ahead today especially with the Chinese October Monthly activity reports which are due at 6.30 am. In may well be that analysts are correct and that Industrial Production and Retail Sales growth coming in almost bang on the September outcomes, but we know that these monthly activity data tend to pick up the signals on the economy to a closer extent was often evident in the quarterly GDP report. For the past three months, industrial production has been under-clubbing consensus expectations. The range of estimates is skewed to the lower end within a range of 5.6 to 6.1%; pricing is an estimate below 5.6% which is only 0.1% lower than September’s growth. We also note that yesterday’s CPI report was lower than expected.
We have no data of note due from the US today but the Bank of England are hosting a conference this morning where Bank of England Governor Mark Carney and ECB President Mario Dragi are both giving key note speeches and these will definitely be worth watching and listening for any market turbulence that may follow.
December S&P 500
The S&P plan worked very well as shortly after lunch the S&P traded lower to my 2067 buy level before having a nice rally which enabled me to cover this position at my 2074 T/P level as outlined earlier to my Platinum Members and I am now flat. As I have mentioned over the past few days the S&P has very strong support from 2060/2070 and so far this is proving to be the case. However a break and close below 2058 will be short-term bearish. Today I will move my buy level higher to 2068/2073 with a 2064 stop. Despite the negative price action over the past week I do not want to be short the S&P at this time.
EUR/USD
The Euro plan also worked well yesterday as the market had a nice sell-off on more woes out of Portugal which saw me to go long the market at 1.0685. Subsequently the Euro had a nice rally which enabled me to cover this long position at my 1.0720 T/P level as outlined earlier to my Platinum Members and I am now flat. Today I will again look to buy the Euro on any dip lower to 1.0670/1.0710 with a 1.0640 stop. I will continue with my strategy of buying dips in the Euro as this plan has worked very well all year.
December Dollar Index
Unfortunately the Dollar just missed my 99.70 sell level with a 99.61 high before having a nice sell-off and I am still flat. Today I will again look to sell the Dollar on any rally higher to 99.60/99.90 with a 100.20 stop. I will keep my buy level unchanged at 98.20/98.50 with the same 97.90 stop.
December DAX
There is no doubt the DAX and FTSE are two of the most difficult markets to read at this time as most of the moves are currency related. I am still flat the DAX and today I will raise my buy level slightly to 10720/10770 with a 10680 stop. The price action continues to tell me not to be short the DAX at this time.
December FTSE
In contrast to the DAX above the FTSE continues to trade heavy as the market presently cannot get anything going on the upside. As I mentioned at length over the past two days the FTSE has major resistance at the 6400/6450 area and it will take a lot of work /good news to break this congestion especially with the 100 and 200 day Moving Average pointing downwards. Today I will again lower my sell level to 6345/6375 with a 6405 stop.
Dow Rolling Contract
No change as I am still flat the Dow. Today I will raise my sell level slightly to 17880/17940 with a 17980 stop.
December BUND
I am still flat the BUND and today I will raise my buy level to 155.00/155.40 with a 154 70 stop. I still do not want to be short the BUND at this time.
Gold Rolling Contract
My Gold plan worked well yesterday as the market traded lower to my 1086 buy level with a 1085 low before having a nice rally which enabled me to T/P at 1093 as outlined earlier to my Platinum Member s and I am now flat. Today I will again look to buy any dip lower to 1080/1086 with a 1073 stop. I still do not want to be short Gold at this time.
Silver Rolling Contract
Unfortunately my good run in Silver has come to an end over the past few weeks. Yesterday afternoon I was stopped out of my latest 14.75 long position at 14.35. Given how partial I am to Silver I have bought the market again here at 14.36 with a 13.95 stop. I still believe that Silver is in a bottoming out phase which is taken longer than I envisaged.
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