European Closing Thoughts: Will it break or will it hold ?

As we were expecting and highlighted in the Morning Meeting, Sandy depressed US industrial output in October.

The Federal Reserve said Friday that industrial production fell 0.4 percent last month, after a 0.2 percent gain in September. Excluding the storm's impact, output at the nation's factories, mines and utilities would have risen about 0.6 percent. Looking into the numbers: factory output, the most important component, fell 0.9%. It would have been unchanged without the storm signalling that there is a lot to do to put the Nation on the growth path.

Nevertheless, US stocks tried to rebound on the opening bell on a report that the White House officials were in advanced talks to “replace sweeping spending cuts with targeted cuts and tax increases” according to Reuters News , in a move to avoid the so called “fiscal cliff”. The up-move was short lived as “longs” did not wanted to carry their position over the weekend, therefore the picture at European cash close look like this:

Stoxx 50 -1.10% to 2,434.76, German Dax -1.01% to 6,971.95, Spanish Ibex -1.18% to 7,604.60, Italian Ftsemib -1.85% to 14,881.65.

In US: the DJIA  fell 0.44% to 12,486.80, the S&P500 fell 0.57% to 1,345.59 while the tech Nasdaq led losers down 0.73% to 2,816.20.

Haven searchers pushed the dollar higher versus all major pairs with the ICE dollar index up 0.47% to 81.40,  the US unit bought 81.31 yen in recent action, recovering after having earlier slipped below the 81Y level. The common currency traded 0.45% lower versus the US dollar to 1.2717$, losing ground also versus the JPY, it fetched Y103.37, easing from Y103.74.

The move in the dollar pressured the yellow metal which traded 0.12% lower to 1,711.90$ an ounce. The moves added to a drop of $16.30, or 0.9%, to $1,713.80 an ounce Thursday after a report from the World Gold Council indicated that demand for the metal weakened in the third quarter.

Oil wise, the crude for December delivery rose 0.87% to 86.19$ a barrel on the Nymex, as concerns of escalating tension in the Middle East are offsetting slowing growth prospects.

Another expiration day is just finished, another intense trading week has just ended, it has been a really interesting week the market priced our way of working. We need to remember that he/she is our ultimate Maestro.

I would like to close the week thanking Andrea for his work on The Maestro section on LittlefishFx. http://www.littlefishfx.com/category/game-plan/the-maestro/

For what it may concern our daily game plan: the market is now on our line,  the initial target of our short position, it's now time to study the market reaction here to understand if the $FESX_F will get out from this trading range or it will regain the road to north.

Have a great weekend.

Originally posted at www.77sigmatrading.com