Interest rates are basically zero and selling of dollars and buying of leveraged assets continue

Top Day Rec

11.10

Again, no data points today. German consumer confidence drops. Lloyd’s of London (an iconic business) cuts back 4K in jobs. North Korean and South Korean warships exchange fire.

Yesterday, nearly a short squeeze as the equity market was a mono directional affair to a 13 month high. Again, a 10.2% unemployment rate from just Friday and without fresh eco news Monday, a 200 point advance appears counter intuitive, at least and this may mean that these markets are largely a currency phenomena. The carry trade rules. Selling of dollars and buying of leveraged assets has been in vogue for months. Interest rates are basically zero. Look at the 10 year and the 30 year futures prices; yes, they are basically the same price (may be a good trade in there). IMF states that the dollar is over valued. So, when in Rome…

Nov 12	08:30	Initial Claims	11/07		525K	510K	512K
Nov 12	08:30	Continuing Claims	10/31		5700K	5700K	5749K
Nov 12	11:00	Crude Inventories	11/06		NA	NA	-3.94M
Nov 12	14:00	Treasury Budget	Oct		-$150.0B	-$150.0B	-$155.5B
Nov 13	08:30	Export Prices ex-ag.	Oct		NA	NA	NA
Nov 13	08:30	Import Prices ex-oil	Oct		NA	NA	NA
Nov 13	08:30	Trade Balance	Sep		-$30.0B	-$31.9B	-$30.7B
Nov 13	09:55	Mich Sentiment-Prel	Nov		70.5	71.8	70.6

 

Current views, speculations and suggestions

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

 

Dec ES: pos with support at 1074.00

Dec NQ: pos with support at 1740.50 

Dec Mini Dow: pos with support at 1004.00

Dec Gold: pos with support at 1088

Dec Silver: pos with support at 17.21       

Dec Copper: neg with res at 2.97

Dec Yen: neg with res at 111.85        

Dec Swiss: neg with res at 99.68       

Dec EC: neg with res at 150.50

Dec Canadian: pos with support at 93.63    

Dec BP:  pos with support at 165.10

Dec Aussie: pos with support at 91.97  

Dec Crude: pos with support at 78.00       

Jan Soybeans: neg with res at 9.81   

Mar Wheat: pos with support at 5.24    

Dec Ten Year:  pos with support at 118.08     

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International Markets

Dec Bund: neg with res at 121.80   

Dec Dax:  pos with support at 5546

Dec NKD pos with support at 9776

 

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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.