I went long yesterday afternoon in the FTSE 100 at 6407. I want to carry on being long this index. I will buy dips with a stop at 6400.
The closely watched nonfarm payroll employment report from the Dept. of Labor will be released today at 13:30 UK time. This will set the tone for the rest of the day, and should either send indices higher after the miserable start to the year or plunge us to new lows.
The Market Map for today shows a trending mode. I think it is fair to say that everyone will be waiting for the NFP to be released today. It could be quiet trading up until the release.
Good luck today and see you Monday
Tom Hougaard
3rd January 2008
Mixed day yesterday, but ultimately got stopped out on the Dow position, which initially looked very promising. Here is the problem with today's market: the first couple of days in the New Year tend to be positive, although you as well as I can remember the steep sell-off in 2004, in the first few trading days of the year. I had expected the bulls to take the reign yesterday, but that did not happen, and here is what is worrying for the bull case: last year we saw some huge declines caused by currency fluctuations. We had the sell-off in March 2007 and again in July 2007. Both were accompanied by huge currency moves. Some would argue that the currency fluctuations (unwinding of the "carry trade") caused the sell-off in the equity indices. Guess what: yesterday we saw huge moves in many currencies. The JPY USD position I had on moved against me by 300 points. That was the biggest move since August last year, which also saw the huge drop in the Dow. That happened to mark the end of the Dow decline.
All of the above equates to that caution is warrented. I am flat, but will initiate long positions again, if I see a reason to it. For example if the DAX gets above 7970 cash market, I will be a buyer.
Here is the Dax Market Map for today:
Next update 4th January 2008 8am
Good luck today
Tom Hougaard
TraderTom.com
2nd January 2008
Good morning,
Welcome back to a new year of trading.
I have bought the Dow this morning. I have the 2nd January as a turninig point. I could have wished for this cyclical low to be on more volume and a little more climatic, but so far I have seen no cyclical capitulation. I don't want to see the Dow futures go below 13181. I suspect that the range bound trading, which started in mid 2007 will continue into 2008. My target is 14,000 or higher.
Gold has moved out of a sideways triangle. Strickly speaking this is a buy signal, but I am afraid I have missed the first 3-4 days of movement. I am standing aside to see how Gold deals with the old highs of $845.
ANALYSIS
