Opening Report – 26 October 2012

No overall change of opinion today and the case that we have seen key peaks remains. But we are due a bounce and it cannot be ruled out that these are just corrective moves doing everything they can to convince us they are anything but. The US election gets closer every day and is due on 6th November and this is clearly a key event. Watching the debates between Romney and Obama the key feature to me was how often they called their opponents a liar, although they dressed it up a little more carefully. It seems bizarre with all the information around today that they can get away with this – but maybe it does not matter to the voters, maybe it is simply about how well the candidates perform – on TV! The real world may not be so important. It is certainly true that Obama was dealt a tough hand. The US election cycle is, in one sense, a game of pass the parcel and it exploded once Obama got hold of it!

Opening Report – 18 October 2012

1. Introduction

The markets are still rallying and expiry comes tomorrow and, as I have often said, it is what happens after expiry that is important.

2. UK FTSE 100

FTSE is now at 5911 up 1 points. FTSE saw a solid rally yesterday and is now back probing the upper parameter of the triangle, see chart below. This could be a significant move especially if it can be maintained after expiry at 10h20 tomorrow morning. We remain 50% long-term short via the ETF SUK2. We are also 50% long the VIX via the ETF VIXS.

3. The German DAX

The DAX is now at 7399 up 4 points. The DAX has also seen a strong rally and is now hesitating around 7400 but maybe not for long.

4. The US DOW

The Dow closed yesterday at 13557 up 5 points with the spread betters now quoting it at 13542 (-15). The bear case remains intact for now but not if the Dow makes it back above 1366. We remain 50% short of the NASDAQ via the ETF Proshares Trust Ultrashort QQQ

5. The Japanese NIKKEI DOW

The Nikkei Dow is now at 8982 up 176 points. A stronger rally here also.

6. US T-BOND

Bonds dropped back yesterday. I have been reading comment suggesting bonds are the biggest bubble around right now and that does make sense! We remain officially 50% short of shorter dated bonds via the ETF DB X-Trackers II IBOXX Short USD Treasuries Tr Index 1C (XUTS).

7. Gold ( UK cash)

Gold is uncertain right now, we are again seeing a buying response to lower prices but it is inconclusive at this point. Big worry remains that the world and its dog seem positive! We are 100% long via the ETF (PHAU) and entered when Gold was around $1560.

8. FOREX

GBP/EUR has made new lows so all bets are off for now. The GBP/USD is heading back towards $1.65.

Read the full analysis in the Big Call Report. Click here for subscription details.