Fed leaves rates unchanged and go on to say that rates should be expected to stay low for some time

Top Day Rec

11.05.09

Fed leaves rates unchanged. No surprise there. They also go on to say that rates should be expected to stay low for some time looking forward even though they see signs of economic strength (chiefly due to draconian cost cutting). The Fed won’t raise rates until the unemployment picture shows some sign of improvement. Instead, it continues to deteriorate albeit at ever slower rates of deterioration.

The ECB leaves rates unchanged at 1%. BOE leaves rates at 0.5 and announces a smaller than expected increase in their asset repurchase programme (British spelling there). DAX,FTSE and CAC all lower by about 0.5%.

Initial jobless claims came in at -20K with continuing claims at 5.7 million. Q3 productivity surges to 9.5% (lower employment costs).

Will the monthly unemployment number breach 10%?

Gold continues to trade as the anti-currency. In short, is the dollar under pressure due to fiscal policy and deficit spending? Yes, so money flows to gold. Is J.C. Trichet backing away from the EC as being the reserve currency of the world? Yes, so money flows to gold. Do you really want to own Pounds with interest rates at 0.5%? No, so money flows to gold. Although gold will trade and eventually the Average True Range (now at $17) will approach $35, there seems to be a floor under this market as long as this currency perception holds.

Yankees win their 27^th and the sun also rises. 3 million showed up at their last celebratory turn up the Canyon of Heroes in 2000. With unemployment brushing 10%, who knows, 3.7 million this time? 3.99? Bread and circuses.

Nov 02	10:00	Construction Spending	Sep	-0.5%	-0.2%	0.8%
Nov 02	10:00	ISM Index	Oct	54.0	53.0	52.6
Nov 02	10:00	Pending Home Sales	Sep	1.2%	-0.1%	6.4%
Nov 03	10:00	Factory Orders	Sep	1.2%	0.9%	-0.8%
Nov 03	14:00	Auto Sales	Oct	NA	NA	NA
Nov 03	14:00	Truck Sales	Oct	NA	NA	NA
Nov 04	07:30	Challenger Job Cuts	Oct	NA	NA	-30.2%
Nov 04	08:15	ADP Employment Report	Oct	-235K	-190K	-254K
Nov 04	10:00	ISM Services	Oct	52.0	51.5	50.9
Nov 04	10:30	Crude Inventories	10/30	NA	NA	0.78M
Nov 04	14:15	FOMC Rate Decision	11/4	0.25%	0.25%	0.25%
Nov 05	08:30	Productivity-Prel	Q3	6.4%	6.5%	6.6%
Nov 05	08:30	Initial Claims	10/31	525K	520K	530K
Nov 05	08:30	Continuing Claims	10/24	5730K	5750K	5797K
Nov 06	08:30	Nonfarm Payrolls	Oct	-230K	-175K	-263K
Nov 06	08:30	Unemployment Rate	Oct	10.0%	9.9%	9.8%
Nov 06	08:30	Average Workweek	Oct	33.0	33.1	33.0
Nov 06	08:30	Hourly Earnings	Oct	0.0%	0.1%	0.1%
Nov 06	10:00	Wholesale Inventories	Sep	-1.1%	-1.0%	-1.3%
Nov 06	14:00	Consumer Credit	Sep	-$10.0B	-$10.3B	-$12.0B

Current views, speculations and suggestions

(good till close of business today). These are technical in nature only.

Dec ES: pos with support at 1039.00

Dec NQ: pos with support at 1673

Dec Mini Dow: neg with res at 9877

Dec Gold: pos with support at 1079

Dec Silver: pos with support at 17.12

Dec Copper: neg with res at 2.99

Dec Yen: neg with res at 111.00

Dec Swiss: neg with res at 99.28

Dec EC: neg with res at 149.68

Dec Canadian: pos with support at 93.25

Dec BP: pos with support at 164.50

Dec Aussie: neg with res at 91.70

Dec Crude: pos with support at 78.25

Jan Soybeans: neg with rest at 10.06

Mar Wheat: pos with support at 5.27

Dec Ten Year: neg with res at 118.19

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International Markets

Dec Bund: neg with res at 121.60

Dec Dax: neg with res at 5489

Dec NKD potential reversal day

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N.B.: if you initiate a trade using ANY of these numbers use a STOP at least equivalent to 2 ½%. Repeat: use Stops. Don’t think about using Stops. Use Stops. Some find it appropriate to look at the margin requirement and use that as a stop or if it’s a steep initial requirement, use half.

Charles Kespert

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ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, AL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETIOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.

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