be aware to always trade according to the right signals, this is just an opinion 🙂
US: For the time being it seems that the FED actions led to the usual market rally at the end of the year with new all-time highs in November. We currently expect the markets to continue their rise and have a years end rally. We also are looking out for small cap stocks that historically tend to outperform their large cap pendants at the beginning of the year.
EU: Fundamentally the problems in the German economy aren’t solved but with the US and other markets at new all-time highs it is likely that the DAX will join in the group and will end up higher in December.
UK: Brexit still is unsolved and the election on December 12th will show how it is likely to be resolved. As election day is a Thursday we expect high volatility before and after that day not only in the FTSE but also the other EU markets. As we said in our November outlook we saw a sideways movement in the UK market.
Currencies:
USD: Making more and more money available at a cheaper rate has some effects on the USD. We expect it to go moderately down during the coming month which gives other currencies like EUR or CHF the chance to catch up a bit on their recent losses. The prognosed rise against the CAD turned out nicely in our favor and is now flattening out.
EUR: We expect a rise against the USD as well as against the JPY. We started a bigger rally here at the beginning of October and it seems that markets are done retracing and we will see another breakout here soon.
GBP: As predicted we had the perfect sideways movement against the USD although slightly higher against the EUR. We expect that to continue until the British election and then see high volatility to both sides. Depending on how the election turns out I would guess that the initial reaction would be negative for the GBP and then turn into a longer upwards trend.
Commodities:
Oil/heating oil: Instead of the decline they both went into a perfect sideways movement. As we are still more bearish for December we expect a further decline in a kind of volatile trading, especially when current resistance levels break.
Gas: We had a retracement and then started to see some rise in price again before we entered into a full blown downwards trend. As with more breaking resistance levels we would expect further price drops in December.
Copper: Currently we are correcting in a sideway movement and we are waiting for a trend continuation from roughly mid of December on.
Cotton: Being back in our sideways range we are waiting for a breakout which is most likely to happen to the upper side. This would be our entry signal for a long position until the end of December.
Coffee: We had a very nice explosive movement from the mid of October and then the correction at the beginning of November followed by yet another explosive movement. Once we see a correction of that we would expect prices to further go up until the end of the month.
Sugar: still trading in a sideways range and it looks like we’re knocking on the ceiling soon. A breakthrough over the last swing highs would our entry as we expect higher prices in December.
Lumber: we expect the upwards channel to hold further and lumber climbing to higher prices within the channel. If the prices move to the lower barrier of the channel we could aim to have another entry point.
Orange Juice: The expected upwards movement didn’t occur, instead we went into a sideways movement and only ended a bit higher than we began. It seems that the level of 11.000 is far away now even as we remain further bullish for December.
Looking forward to next month! 🙂
