The US Dollar has been drifting lower over the past 24 hours with the Dollar Index down 0.3% since I marked prices yesterday morning. This came on the back of a rebound in the German ZEW Survey in November but also better than expected US Inflation and Housing Reports. The Fed’s Kocherlakota added to the Dollar’s woes by warning not to raise rates in 2015 due to low Inflation. The Euro was in the ascendancy from early yesterday morning and that theme has continued overnight, boosted by a better than expected German November ZEW Investor Survey where the Current Situation/Expectations printed 3.3 and 11.5 respectively versus 1.3 and 0.9 expected.
The Japanese Yen has continued to weaken after PM Abe confirmed that he would postpone by 18 months the second stage of the Government’s proposed Sales Tax hike from later next year to 2017. At the same time he called a snap election with Parliament to be dissolved and voting taking place on either December 14 or 21.
This morning on the economic front we have the Bank of England Minutes from the last meeting at 9.30 am. At 1.30 pm we have the latest US Housing Starts while finally at 7 pm the Fed will release its Minutes from the Oct 28-29 FOMC Meeting.
December S&P 500
The S&P plan worked well yesterday as the idea of selling spikes with a tight stop continues to pay dividends. After the US markets opened the S&P followed the Dax’s lead with the market finally hitting my 2051 sell level. I was tempted to hold this position for a more macro trade but I have decided to stick with the strategy of selling spikes until we get a sell extreme first. For this reason I have covered this position at 2045 this morning and I am now flat. Interestingly with both the S&P and Dow closing at new all time highs the McClellan Oscillator only improved slightly to +41 from +16 on Tuesday.
Today I will again be a seller from 2049/2054 with the same 2058 stop. I will still be a small buyer on any dip to 2030/2036 with a tight 2026 stop.
Euro/USD
The Euro is trying to grind higher with the market testing the key 1.2550 resistance this morning. As I still like the Euro I have again decided just to cover half of my long 1.2478 position from yesterday morning at 1.2530 today and I will raise my stop to 1.2500 on the other half as I am still looking for the Euro to trade higher to the 1.2750/1.2800 major resistance level. If I am stopped out of the rest of my position at 1.2500 I will be a more aggressive buyer on any dip to 1.2460/1.2490 with a 1.2435 stop.
US Dollar Index
I am still short from last week at 87.90 and today I will lower my stop on this position to 88.00.
December DAX
After Germany released its much stronger ZEW Survey the Dax traded higher all day before hitting my 9450 sell level. I am still short and given the price action over the past three days I do not want to risk to many points being short and for this reason I have lowered my stop to 9495 which is just above today’s high.
December FTSE
The FTSE also traded higher after I posted yesterday morning to my 6710 sell level. I am happy that the FTSE was not as strong as the other major Indices and today as I am still short I will lower my stop to 6730. If I am stopped out of this position I will be a more aggressive seller in front of 6750 with a 6780 stop.
Dow Rolling Contract
The Dow finally hit my 17720 sell level just before the New York close last night. I was debating whether to hold my S&P short above or this Dow short for a more macro position as I really believe that this market will soon start to correct given how overbought we are on Daily and Weekly basis. The Dow won this debate but given how much the Dow has moved overnight I have decided to cover half this trade at 17660 and I will leave a breakeven stop on the other half. If I am stopped out at 17720 I will be a more aggressive seller in front of 17750 with a 17810 stop.
December BUND
No change as I am still short at 151.78 with the same 152.10 stop. If I am stopped out I will be a more aggressive seller in front of 152.35 with a 152.60 stop.
Gold Rolling Contract
No change as I am still long from last Friday at 1157 with the same 1180 stop as this morning Gold is again testing the key 1200/1204 resistance level. If Gold can break and close over 1204 it will very positive.
Silver Rolling Contract
No change as I am still long from last week at 15.30 and 15.80 with the same 15.75 stop. Again a break of 16.60 will see me raise my stop to 1630 on both positions.
Nymex Crude December
I am glad I moved my stop higher as soon after the US markets Crude started to sell off with the market eventually taking me out of my long 73.52 position at 74.60 and I am now flat. Today I will still be a small buyer from 73.50/74.00 with the same 72.80 stop.
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