The Dow and S&P both closed flat yesterday whilst the NASDAQ rose 0.6%.The US had conflicting data releases with Building Permits jumping to their highest level in more than five years signaling the US Real Estate market will strengthen in 2014. Applicants for new construction rose 6.2% to a 1.03 million annualized rate, beating expectations, and climbed to its highest level since June 2008. The data indicated that multi-family units are poised to lead the advance in homebuilding in the coming months as construction companies look past higher borrowing costs and proceed with larger projects. One the other hand the Conference Board released its latest Consumer Confidence numbers yesterday showing a fall to 70.4 from 72.4 last month which was stronger than initially expected Confidence among US Consumers fell to a 7 month low as Americans grew more pessimistic about the labour market outlook.
Yesterday was a very quiet trading session with most US traders leaving early for the Thanksgiving Holiday tomorrow and I would expect today’s session to be even quieter.
This morning, on the economic front, Spanish Retail Sales which were just released fell 0.5% versus a rise of 1.6% expected. At 9.30 am we have UK GDP and Index of Services. This is followed by Consumer Confidence numbers from France and Germany, while the latter also has a 10 Year Bond Auction later today. Later at 1.30 pm we have US Durable Goods and the Weekly Jobless Claims which are released a day early this week due to the Holiday tomorrow. At 3 pm we have the Chicago Fed National Activity Index.
December S&P 500
I find it incredible with the US stock markets making one new higher closing after another that the McClellan Oscillator (which is the internal reading of the stock market) is still flat. Given how strong the Indices are trading, I would have expected this indicator to have had a reading of +200 instead of just +1. Yesterday the S&P traded in a very narrow range and in the process just missed both my buy level and sell levels and as a result I am still flat. I still believe that the market will find it tough to break the 1805/1815 resistance level without at least having a small sell-off first. Today I will lower my sell level to 1807/1811 with the same 1815 stop. I will also lower my buy level to 1792/1796 with a 1789 stop.
Euro/USD
The Euro is back trading at the top of the Bollinger Band and Williams Index. Overnight the Euro traded up to my 1.3595 sell level and I will leave the same stop at 1.3635 on this small position. If I am stopped out I will be a more aggressive seller on any further rally to 1.3660/1.3690 with a 1.3720 stop. I will leave my buy level the same at 1.3490/1.3520 with a 1.3475 stop on any long position.
December DAX
Yesterday was one of the quietest trading sessions for the Dax this year especially with the US closed tomorrow for Thanksgiving. Today I will still be a small seller on any rally to 9340/9360 with the same 9375 stop. In my commentary yesterday I had a misprint on my buy level for the Dax as my only interest in buying the Dax is on a dip to 9190/9230 ( and not 9190/9290 ) with a 9170 stop on any long position.
December FTSE
One of the reasons that I am concerned about the stock markets is the fact that the FTSE cannot rally. To me the FTSE is a good barometer as to the health of the stock markets in general and with the market trading so heavy it is a major concern for me. The fact that it broke and closed below 6660 is also another warning sign as the market is still trading well below the high made last June. Yesterday I was stopped out of my long 6680 position for a small loss at 6665 and I am now flat. Today I will be a small seller from 6660/6690 with a 6710 stop. I do not want to be long the FTSE at this time.
Dow Rolling Contract
The Dow just missed my 16140 sell level before having a nice sell-off and I am still flat. I still believe that the Dow will have trouble breaking this 13 year trendline at 16150 that I mentioned yesterday and today I will lower my sell level slightly to 16120/16160 with a 16175 stop.
December BUND
After I posted yesterday the Bund just traded higher all day and the fact that we managed to close again over 141.30 is also bullish. Today I will raise my buy level to 141.20/141.40 with a 140.95 stop. I still do not want to be short the Bund at this time.
Gold Rolling Contract
Gold traded down to my 1240 buy level yesterday after I posted and I am still long. I will raise my stop to 1234 which is just below yesterdays low as I think Gold has put in a short term bottom last Monday at 1226.
Silver Rolling Contract
No change as I am still long at 19.60 from last Monday. My stop at 19.60 nearly got hit overnight but so far the low is 19.62 and I will leave my stop the same. If I am stopped out I will be a more aggressive buyer on any dip to 19.20/19.50 with a 18.95 stop.
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