Algo Futures - Trending Now - Issue 13 - 05-DeC-13

8/13/2019 Algo Futures - Trending Now - Issue 13 - 05-DeC-13

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Hello Traders,S&P futures ended the Christmasholiday week at a new record closetrading up to 1840.

The rally began on December18, following the recent FOMCannouncement that the Fed wouldstart “tapering” it extraordinaryunconventional accommodative$85 billion a month bondpurchasing program known asquantitative easing.

The FOMC announcement gave

rise to a major short coveringrally through the previous tradingrange: the low 1760, the high 1812.On December 20th, the broadbenchmark indexes broke-outabove the previous multiyear highat 1812 and trading up to 1840,closing Friday’s session at 1838.At this stage in the recent market development there has notbeen a secondary reaction to the rally, i.e. a pull-back equal toan average daily range.During the short covering phase, on December 19th there was

a minor pull-back to 1795, prior to the re-test of the previousrecord high at 1812.

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SUNDAY, JANUARY 05th, 2013

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ALGO FUTURES NEWSLETTER | ISSUE 13 | 05-JAN-13

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Inside This issueWeekly Recap ............................................................................................................................................. 2

Monday ........................................................................................................................................................ 5

Daily Morning Briefing ........................................................................................................................... 7Tuesday ..................................................................................................................................................... 11

Monday's Market Development | Tuesday's Reference Points ..................................................... 11

Daily Morning Briefing ......................................................................................................................... 13

Thursday .................................................................................................................................................... 14

New Year's Eve Market Development | Thursday Reference Points ........................................... 14

Daily Morning Briefing ......................................................................................................................... 16

Asian Market Recaps ............................................................................................................................... 17

Monday’s Asian Markets ..................................................................................................................... 17

Tuesday’s Asian Markets .................................................................................................................... 19

Thursday’s Asian Markets ....................................................................................................................... 20

Monday’s European Markets .............................................................................................................. 22

Tuesday’s European Markets ............................................................................................................. 22

Thursday’s European Markets ................................................................................................................ 23

Algo Futures | Trending Now




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Weekly Recap

Hello Traders,

S&P futures ended the Christmas holiday week at a new record close trading up to

1840.The rally began on December 18, following the recent FOMC announcement that theFed would start “tapering” it extraordinary unconventional accommodative $85 billion amonth bond purchasing program known as quantitative easing.

The FOMC announcement gave rise to a major short covering rally through the previoustrading range: the low 1760, the high 1812. On December 20th, the broad benchmarkindexes broke-out above the previous multiyear high at 1812 and trading up to 1840,closing Friday’s session at 1838.

At this stage in the recent market development there has not been a secondary reactionto the rally, i.e. a pull-back equal to an average daily range.

During the short covering phase, on December 19th there was a minor pull-back to 1795,prior to the re-test of the previous record high at 1812.

Since the break-out above 1812 and the subsequent range extension up to 1840, therehave only been minor pull-backs in the range to 5 points.

Seasonal profession traders know that market development is a non-linear process and





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indeed the current rally, like all the rally that have proceeded it will at some point over-extend the trading range, leaving buyers at the high to discover that their long positionhas come at the end of the “run”.

However, the rally many not have yet reached the exhaustions point yet.

In this week’s recap we will review how the stage of over-extension that have duringprevious “runs” and endeavor to describe the pattern of market development that hascharacterized previous “stopping-points”.

Before we start with the technical description of the “exhaustion pattern” associated with“stopping points”, we will first discuss the Bayesian logic or the psychology behindbuying the high.

Q: Why would a trader or investor consider buying the high?

A: The obvious answer is that the trader or investor thinks the market is going to tradehigher in the futures.

Q: What are the risks associated with buying the high? A. The risks are that the market may be over-extended and buyers will not continue to“bid” the market higher.

Q: Is there empirical evidence supporting the view that market do not continue to tradeperpetually higher (linear progression)?

A: Yes, in fact historically the broad benchmark S&P 500 has sold off below everyrecord high. This year, wherein the S&P 500 is up 468 points (25.4%) above theJanuary 2013 low at 1372. There have been numerous of new record highs.

In every instance where the S&P made a new record high; there was a secondary

reaction to the primary trend. In the major of the case and the S&P sold down from thehigh and pull-back to the prior high.

In other words, the after encountering resistance at the new high the S&P has reversingall of its initial gains before re-testing the new high and trading higher.

Q. How similar is the market development we observed this year (described above)when compared with other bull markets?

A. In every bull market which has occurred since the inceptions of the S&P 500 indexthe pattern described above, i.e. non-linear development has occurred.

Q. What is meant by non-linear development?

A. Non-linear development describes a data structure which does not move in a straightline, but moves directionally in a zig-zags pattern, higher and lower.

Q. What cause a price series to move in a zig-zags pattern higher and lower?

A. Supply and Demand, in the form of buying interest and selling pressure are theforces that results in a price series to zig-zags higher and lower and or lower and





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higher?

Q. What does a zig-zags price series tell us about market development?

A. The zig-zags price series pattern informs us that a primary trends (higher or lower)will at some point encounter a secondary response.

In other words, a market that is moving primarily higher will at some point encounterresistance (a lack of buying interest). Similarly, a market that is moving primarily lowerwill at some point encounter support (a lack of selling pressure).

Q. What does a secondary response look like on a chart?

A. The chart below provides the most recent examples of what a secondary reaction tothe primary trend looks like.

Q. What trading strategy is most profitable during a bull market?

A. Buy the pull-back.

Q. Why is buying the pull-back the most profitable trading strategy?

A. A casual review of last year’s market development that it is impossible to outperformthe market if your buy the high.





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Additional, buying the pull-back affords the trader (investor) the best options formanaging positions.

MondayComing into Monday’s Session

S&P futures have rallied 86 points (4.6%) above the December 16 th low (1754) and 28points (1.5%) above the previous multiyear high (1812).

As of Friday’s close the extreme price excursion estimate is 1845. Thus, based onFollow the Bots computational model the current rally is approaching an estimate“stopping point”.

We would expect to see the rally consolidate at or near the current high. In the event therally stalls, fails to advance above Friday’s high and or 1845 estimated “stopping point”the contraction of the current trading range will confirm the potential near term end ofthe “run”. Following the contraction of the trading range and the failure to sustain furthergains, we would expect to see the S&P sell-off from its current high and pull-back intothe developing trading range.

1830, the December 26th low is current the break-down-point. The previous multiyear





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high (1812) is near term support. The minor support level which represents potentialpull-back candidates is the December 23 rd high at or near 1824.

1.) Bayesian Inference | Buy the pul l-back at or near 1830

The aggressive long entry is located at or near 1830. The risk is that the minor supportlevel is only likely to remain support to the extent the bullish sentiment continues.

When the last buyers have bought and the selling pressure commences the 1830 pricelevel is not likely to provide must support.

2.) Bayesian Inference | Buy the pul l-back at or near 1824.

While still above the ideal pull-back target the 1824 price level is approximately thedistance of an average daily range. Therefore, the 1824 price level must be considered

as a potential support level.3.) Bayesian Inference | Buy the pul l-back at or near 1812.

The ideal pull-back target is at or near the previous multiyear high at or near 1812. The1812 price level is 28 points below Friday’s high (1840).

The 1812 price level is considered the ideal pull-back target because statistical highvolume has been transacted at 1812-1814. Previous sellers are likely to be hold





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positions there.

Buyers who missed the opportunity to get aboard the rally are likely to want to takeadvantage pull-back in exception that the rally will continue and or the S&P will re-testthe new record high.

Bayesian Inference | Sell the Retracement at or Friday’s high and or the estimatestopping point at or near 1845.

The risk is the rally will continue. Analysts have estimated the S&P will auction up to1850. Therefore, traders are advised to consider the order flow events and confirm thatthe buying interest has ceased [BPW] prior to considering taking a short position.

Daily Morning Briefing





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developing trading range.

1830, the December 26th low is current the break-down-point. The previous multiyearhigh (1812) is near term support. The minor support level which represents potentialpull-back candidates is the December 23rd high at or near 1824.

Bayesian Inference | Buy the pull-back at or near 1830

1.) The aggressive long entry is located at or near 1830. The risk is that the minorsupport level is only likely to remain support to the extent the bullish sentimentcontinues.



2.) While still above the ideal pull-back target the 1824 price level is approximately the

distance of an average daily range. Therefore, the 1824 price level must be consideredas a potential support level.

Bayesian Inference | Buy the pull-back at or near 1812.

The ideal pull-back target is the prior mulityear high.

Bayesian Inference | Sell the Retracement at or Friday’s high (1840) and or theestimate stopping point at or near 1845.

The risk is the rally will continue. Analysts have estimated the S&P will auction up to1850. Therefore, traders are advised to consider the order flow events and confirm that

the buying interest has ceased [BPW] prior to considering taking a short position.

Global Market Developments

European stocks are down and Asian stocks closed mixed.

Today was the last trading day for the year in Japan where the Nikkei stock indexclimbed to a 6-year high and has rallied 57% for the year, the largest increase since1972.

In Commodities

Commodity prices are mixed. Feb crude oil is down -0.11%. Feb gasoline is up

+0.02%. Feb gold is down -0.86%. March copper is up +0.12%.

Currencies

The dollar index is down -0.16%. EUR/USD is up +0.13% on hawkish comments fromECB President Draghi who said he sees no need for further interest ratecuts. USD/JPY is up +0.01% after it posted a fresh 5-year high on the outlook for





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continued monetary policy divergence between the Fed and BOJ.

In an interview Saturday, ECB President Draghi said he sees no need for further cuts tothe bank's benchmark interest rate amid "encouraging signs" that the euro crisis may beresolved. He also said that there are no signs of deflation and that "we don't have a

situation as in Japan."

China's yuan climbed to 6.0611 per dollar, the strongest since the Chinese governmentunified official and market exchange rates in 1993, after the PBOC raised the yuan'sreference rate by 0.04% to 6.1024 per dollar today, the strongest since the yuan's pegto the dollar ended in 2005.

Economic Data

This will be a fairly busy week despite the New Year’s holiday on Wednesday.

Pending home sales report will be released today and is expected to show an increaseof +1.0% months over month. The pending home sales index has fallen for five straightmonths (June-Oct), which bodes poorly for the existing home sales series.

In fact, existing home sales have fallen by three straight months (Sep-Nov) by a total of-9.1% from the 4-year high of 5 .39 million units seen in July-Aug to the 13-month low of4.90 million units posted in November.

The decline in home sales has been driven by an increase in mortgage rates seenearlier this year. A drop in consumer confidence seen from late summer throughOctober tied to the U.S. government shutdown, and the reduced availability of homes tobuy due to the fewer number of homes on the market has also contributed to lowersales.

On Tuesday the Oct Case-Shiller home price index will be released (expected +0.9%m/m), Dec Chicago PMI (expected -2.5 to 60.5), and the Dec consumer confidenceindex from the Conference Board (expected +5.9 to 76.3).

Thursday brings initial unemployment claims (expected +7,000) and the Dec ISMmanufacturing index (expected -0.4 to 56.9).

The FED

Fed Chairman Bernanke on Friday will deliver an address to the American EconomicAssociation in Philadelphia.

Next week, when Congress returns to session, the Senate still needs to confirm JanetYellen as Fed Chair before Mr. Bernanke’s term expires at the end of January.

Congress has only about two weeks to finalize and approve an omnibus spending bill tofund the government for the rest of the fiscal year before the current continuingresolution expires on January 15. The debt ceiling issue will also start to heat up afterTreasury Secretary Lew recently said that a debt ceiling hike will be necessary by late





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February or early March.

Earning Seasons

There are no S&P 500 companies that report earnings this week. However, there willbe seven of the S&P 500 companies that report earnings next week. Alcoa next

Thursday will kick off the unofficial beginning of Q4 earnings season.

There is some trepidation about Q4 earnings season. The market consensus is for Q4earnings to show positive growth of an estimated +7.6%.

However, the bad news is that there have been 108 negative EPS preannouncementsfor Q4 so far versus only 11 positive announcements. The results negative-positivepreannouncement ratio is currently 9.8 (108/11), which would be the worst level thanlast quarter.

Tuesday

Monday's Market Development | Tuesday's Reference Points





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Hello Traders,

S&P futures continued to trade within the narrow range parameters that developedduring Friday’s session.

Overnight S&P futures had traded up to 1838, modestly below Friday’s high at 1840.

At Monday’s open S&P futures sold down to 1833, held support at Friday’s low andauctioned back up to 1836. Later in the day S&P futures sold back down to the low(1833) before auctioning back up to 1836 into the close.

While the trading range contracted within Friday’s trading range, the characteristic ofMonday’s session more closely resembled a lack of participations due to the longholiday session.

The pending home sales index data was released today indicating a declined for thefive straight months. The decline in home sales has been driven by an increase inmortgage rates seen earlier this year. The releases of today’s home sales data had noapparent impact on S&P futures.

The unchanged condition at Monday’s close provides us with no new insights into themarket conditions that would alter the view posted in yesterday’s commentary.

Coming into Tuesday’s Session

We would expect to see the rally consolidate at or near the current high. In the event therally stalls, fails to advance above Friday’s high and or 1845 estimated “stopping point”the contraction of the current trading range will confirm the potential near term end ofthe “run”.

Following the contraction of the trading range and the failure to sustain further gains, we

would expect to see the S&P sell-off from its current high and pull-back into thedeveloping trading range.

1830, the December 26th low is current the break-down-point. The previous multiyearhigh (1812) is near term support. The minor support level which represents potentialpull-back candidates is the December 23rd high at or near 1824.


1.) The aggressive long entry is located at or near 1830. The risk is that the minorsupport level is only likely to remain support to the extent the bullish sentimentcontinues.


Bayesian Inference | Buy the pul l-back at or near 1824.

2.) While still above the ideal pull-back target the 1824 price level is approximately thedistance of an average daily range. Therefore, the 1824 price level must be consideredas a potential support level.





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Bayesian Inference | Buy the pull-back at or near 1812.

The ideal trade location is the prior multiyear high at 1812

Bayesian Inference | Sell the Retracement at or Friday’s high (1840)

The estimate stopping point at or near 1845.

The risk is the rally will continue. Analysts have estimated the S&P will auction up to1850. Therefore, traders are advised to consider the order flow events and confirm thatthe buying interest has ceased [BPW] prior to considering taking a short position.


Good Morning Traders,

S&P futures traded “flat” in the overnight session continuing the pattern observed at the close of

last week’s extended holiday session.

The S&P traded with the parameters of Mondays’ session: auctioning up to 1838 at or near the

current record high at 1840, before pulling back to 1833.





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Following disappointing U.S. pending home sales data released yesterday, investors await

reports on consumer confidence and housing due out later in the day for further clues on the

strength of the US economy.

Trading in the U.S. index futures indicate a flat start before the New Years' holiday, as most

traders have likely stepped away from their desks on the last trading day of the year.

The major European markets rallied in thin pre-holiday trading on Tuesday.

The U.K. and French markets will close around midday for New Year's Eve, while many markets

including Germany, Switzerland and Italy are closed for the full day.

Asian markets ended mixed in light trading as some of the regional markets remained closed for

New Year's Eve.

Thursday

New Year's Eve Market Development | Thursday Reference Points

Happy New Year Traders,

On New Year’s Eve, the broad benchmark S&P 500 equity index posted its biggest annual

advance since 1997.

The equities benchmark jumped 30 percent in 2013, ending the year at an all-time high for thefirst time since 1999.

The S&P 500 closed Tuesday’s session at a record high 1848. The Dow Jones IndustrialAverage rallied to record 16,576.66, also a record. And the Nasdaq close at 4176.

All 10 main industries in the S&P 500 advanced this year, led by a 41 percent gain in consumer-discretionary companies. About 460 stocks in the index were up for the year, the broadest rallyin data going back to 1990.

This year’s rally in stocks sent the S&P 500’s valuation up more than 20 percent to 17.4 times

reported earnings, the highest since 2010.

Tuesday’s Market Development

Coming into this week’s session we forecasted S&P futures would rally up to 1845.

Following Friday’s rally up to 1840, S&P futures sold-down below Friday’s high and pulled backto 1833 on Monday. Overnight during Monday’s globex session S&P futures traded in a narrowrange at or near Monday’s low prior to the late-in-the-day break-out above 1840 and the rally up





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to 1846.

The New Year’s close at the high did not offer sufficient time for the market to initiate asecondary response.

Now that the extreme price excursion level has been reached we expect to see the rally

consolidate at or near the current high, as the US market approach the start of earning session.Following the contraction of a trading range, which implies a failure to sustain further gains, wewould expect to see the S&P sell-off from its current high and pull-back into the developingtrading range.

I have attached a chart illustrating the development range and potential pull-back levels.

Fed News

Next week, when Congress returns to session, the Senate still needs to confirm Janet Yellen asFed Chair before Mr. Bernanke’s term expires at the end of January.

Congress has only about two weeks to finalize and approve an omnibus spending bill to fundthe government for the rest of the fiscal year before the current continuing resolution expires onJanuary 15. The debt ceiling issue will also start to heat up after Treasury Secretary Lewrecently said that a debt ceiling hike will be necessary by late February or early March.

Earning Seasons

There are no S&P 500 companies that report earnings this week. However, there will be sevenof the S&P 500 companies that report earnings next week. Alcoa next Thursday will kick off theunofficial beginning of Q4 earnings season.

There are several concerns coming into Q4 earnings season. The market consensus is that Q4earnings will show positive growth estimated at +7.6%.

However, so far there have been 108 negative EPS preannouncements for Q4 so far versusonly 11 positive announcements. The results negative-positive preannouncement ratio iscurrently 9.8 (108/11), which would be the worst level than last quarter.

With 2013 rally the valuation for S&P 500 stocks is up more than 20 percent to 17.4 timesreported earnings, the highest since 2010. A negative earnings session is not likely to bode wellwith a market priced at perfection.

Since breaking out above the previous multiyear high at 1812, S&P futures have yet to pull backthe distance of an average daily range. In fact, since rallying above the December 18 FOMC lowat 1760, S&P futures had made only a minor pullback to 1795.

Thus the trading range is over extended to the buy side and buyers at the new record high at or1850 are at risk in the event earnings season becomes a disappointment.

The Pull -back Candidates

5.) 1833-1834; minor support level, prior day’s low and an overnight low. The 1833 price level issignificant only to the extent that the bullish sentiment remains dominate. Tuesday's low is not





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likely to hold support once the bullish sentiment is exhausted.

4.) 1830; support in the context that 1830 is currently the distance of an average daily range lowbelow the new record high. However, volume was very light and therefore 1830 is a weak "firstlink" in the Markov chain sequence.

3.) 1824; prior high (12-23-13) and break-out-point. 23 points below the current high and the"second link" in a Markov chain sequence. Statistical high volume accompanied the break-outa5 1824.

2.) 1818: prior high (12-27-13) and break-out-point

1.) 1812: the prior multiyear high: 34 points below the current high: high probabilitysupport level during an initial pull-back.

Bayesian Inference #1

Buy the Pull-back at or near 1830

However, the minor support level at 1833-1834 might be the extent on the initial sell response.

Bayesian Inference #2

Sell the rally 1846, or higher (1850)

Wait for the Order Flow Events to confirm buying programs waning and consider selling the high.


Good morning Traders,

S&P futures “gapped” below their New Year’s Eve high at 1846 and sold down 11 pointsto 1834 at the during the overnight session.

Coming into the end of the year the Follow the Bots computational modelforecasted the rally above the prior multiyear high at 1812 was likely to reach a“stopping point” at or near 1845.

Now that the extreme price excursion level has been reached we expect to see the rallyconsolidate at or near the current high, as the US market approach the start of earning

session.

Since breaking out above the previous multiyear high at 1812, S&P futures have yet topull back the distance of an average daily range. In fact, since rallying above theDecember 18 FOMC low at 1760, S&P futures had made only a minor pullback to 1795.

Thus the trading range is over extended to the buy side and buyers at the new record





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high at or 1850 are at risk in the event earnings season becomes a disappointment.

Following the contraction of a trading range, which implies a failure to sustain furthergains, we would expect to see the S&P sell-off from its current high and pull-back intothe developing trading range.

The Pull -back Candidates

5.) 1833-1834; minor support level, prior day’s low and an overnight low. The 1833 pricelevel is significant only to the extent that the bullish sentiment remains dominate.

1834 is the current overnight low. S&P futures have held support during the initial pull-back (secondary reaction) off the record high (1846) and have auctioned up to 1840: + 5points.

However, as stated in yesterday's commentary the 1833-1834 price level in consideredminor support and is not likely to stand up to initiated selling. Thus, buyers at minor

support are advised to be cautious.

4.) 1830; support in the context that currently 1830 is distance of an average daily rangelow below the current high. However, volume is very light and therefore 1830 is a weakfirst link in the Markov chain sequence.

3.) 1824; prior high (12-23-13) and break-out-point. 23 points below the current high andthe second link in a Markov chain sequence.

2.) 1818: prior high (12-27-13) and break-out-point

1.) 1812: the prior multiyear high: 34 points below the current high: high probabilitysupport level during an initial pull-back.

Asian Market Recaps

Monday’s Asian Markets

The Asian markets rallied on Monday.

Trading volumes remained thin due to impending New Year's holidays.

A weaker yen lifted Japanese shares to a fresh six-year high and Australian sharesadvanced, taking cues from firmer commodity prices.

Markets in China and Hong Kong ended on a flat note amid lingering worries overliquidity conditions.





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Japanese shares ended the year on a high note, thanks to the sliding yen, which hitfresh multi-year lows for the third straight session.

The Nikkei average rose 112 points or 0.7%, to trade at 16,291, its highest level insix years, ahead of New Year hol idays.

Exporters closed mostly higher as the yen slid to its lowest level since October versusthe dollar, extending losses to more than 17 percent for the year. The market will beclosed from tomorrow until January 6.

China's Shanghai Composite index declined 0.2%, to trade at 2,098, draggeddown by financial and property stocks.

Hong Kong's Hang Seng rose marginally to fin ish at 23,244, giving up most of itsearlier gains.

Chinese Premier Li Keqiang has vowed to keep liquidity at a reasonable level in 2014 toensure stability of the economy, according to a report published by Xinhua over theweekend. The government declined it will stick to the prudent monetary policy next yearto maintain the stability of the financial markets and the broader economy.

Li pledged to promote financial reform to better serve the real economy and aidindustrial transformation and upgrading.

Australian shares gained ground, with miners pacing the gainers on the back of highermetal prices and a falling Australian dollar. A strengthening tropical cyclone headingtowards the Pilbara coast weighed on investor sentiment to some extent, cappinggains.

The benchmark S&P/ASX 200 rose 0.6%, to trade at 5,357.

Energy stocks advanced after U.S. crude futures climbed above $100 a barrel for thefirst time since October on Friday.

Seoul shares closed at their highest level in four weeks on the last trading day of theyear, with banks and automakers pacing the gainers.

The benchmark Kospi rose 0.7%, to t rade at 2,011 in relatively thin trading ahead ofholidays on Tuesday and Wednesday.

According to the Bank of Korea report South Korea posted an unadjusted currentaccount surplus of $6.03 billion in November, remaining in the black for the 22ndconsecutive month. However, the headline figure fell from the record unadjusted surplusof $9.51 billion in October.

Data released by Statistics Korea showed that the nation's industrial output saw nochange in November compared to the previous month.

New Zealand shares ended little changed in thin holiday trading.

The benchmark NZX-50 edged up 0.03% to 4,769, with 25 of i ts componentsadvancing.





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India's Sensex was down half a percent, while Malaysia's KLSE Composite was up0.6%, Indonesia's Jakarta Composite index was gaining 1.1%, Singapore's StraitsTimes was up marginally and the Taiwan Weighted average added a percent.

U.S. stocks “paused” on Friday and consolidated gains at the high following a six-dayrally. A lack of major economic data and profit taking following recent gains contributed

to the lackluster close.

The Dow and the S&P 500 edged down marginally, while the tech-heavy NASDAQdeclined 0.3%.

Tuesday’s Asian Markets

Asian stocks ended mixed on Tuesday in l ight trading as some of the regional markets

remained closed for New Year's Eve.

A flat close on Wall Street overnight and a lack of positive triggers rendered investormood somewhat cautious heading into the New Year.

China's Shanghai Composite rose 0.9 percent to 2,116, led by brokerages afterChina’s securities regulator allowed five companies to raise a combined 2.1 billion yuan($347 million) in initial public offerings in January, ending a year-long freeze.

Banks also gained ground despite concerns about growing government debt. Figuresfrom the National Audit Office showed that the total debt of local governments in Chinahad soared to 17.7 trillion yuan by the middle of this year, up nearly 70 percent fromthree years ago, highlighting the urgency to address structural issues.

Hong Kong's Hang Seng index rose 0.3 percent to 23,306 in a half-day session, ledby banking and energy stocks.

Hong Kong's export growth slowed to 5.8 percent in November from 8.8 percent inOctober, the Census and Statistics Department said. Exports totaled HK$325.5 billion.

Australian shares slipped marginally in holiday-shortened session, as most tradersstepped away from their desks on the last trading day of the year.

The benchmark S&P/ASX 200 index edged down 0.1%, to trade at 5,352.

On the economic front, overall private sector credit in Australia rose a seasonallyadjusted 0.3 percent in November compared to the previous month, the Reserve Bank

of Australia said. That was unchanged from the previous month, although it came inbelow expectations for an increase of 0.4 percent.

New Zealand shares ended the year 2013 on a weak note.

The benchmark NZX-50 dropped 0.7%, to trade at 4,737 in thin hol iday trading.

The market will be closed on Wednesday and Thursday for New Year's Eve.





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India's Sensex was up 0.1 percent, Malaysia's KLSE Composite was moving up 0.2percent and Singapore's Straits Times index was up half a percent, while the TaiwanWeighted average slipped 0.1 percent.

Stock markets in Indonesia, Japan and South Korea were closed for holidays.

According to Statistics Korea consumer inflation rose 1.1 percent in December from ayear earlier, said - moving above 1.0 percent after three straight months below thatlevel.

On Wall Street, stocks ended roughly flat in quiet trading overnight, as there seemed tobe little participants due to the holiday’s or perhaps traders seemed reluctant to makeany significant moves following recent sharp gains.

Investors appeared to have shrugged off weaker-than-expected pending home salesdata and looked ahead to a slew of economic reports in the holiday-shortened week.

The Dow rose 0.2 percent, but the S&P 500 and the tech-heavy NASDAQ edged downless than 0.1 percent each.

Thursday’s Asian Markets

Asian stocks ended mixed on the first trading day of the New Year in the wake of disappointing

manufacturing data out of China.

Trading volumes remained thin as most global investors were still in a holiday mood.

The markets in Japan and New Zealand were closed for New Year holidays.

China's Shanghai Composite index fell 0.3 %, to trade at 2,109 after a pair of reportssuggested that China's crucial manufacturing sector is still growing, albeit at a moderate pace.

Hong Kong's Hang Seng index erased early losses to end 0.1% higher at 23,340.

According to a survey by HSBC Holdings Plc. and Markit Economics showed that China'smanufacturing activity grew further in December but at a slightly slower pace than in the previous month. The final reading came in at 50.5, in line with a flash estimate. The officialmanufacturing Purchasing Managers' Index fell to 51.0 in December from 51.4 in November, asexport orders and output weakened.

Separately, China's home prices continued to pick up in December, defying the government's property market curbs, a private survey compiled jointly by the China Real Estate Index Systemand online real-estate brokerage firm SouFun Holdings revealed. The indicator, which trackshouse prices in 100 cities across China, rose 11.51 percent year-over-year in December to CNY10,833 per square meter, the survey said.

Australian shares hit a six-week high, with miners pacing the gainers on optimism about the U.S.economy and as ports in Australia's resource-rich Pilbara region resumed iron ore shipmentsfollowing temporary closures due to cyclone Christine.





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The benchmark S&P/ASX 200 finished up 0.3%, to trade at 5,368 after climbing to 5,383

early in the session.

Big miners BHP Billiton and Rio Tinto rose 0.6 percent and 0.8 percent, respectively, whilesmaller rival Fortescue Metals Group rallied 1.9 percent and gold miner Newcrest soared 8.3 percent.

Among the major banks, Westpac edged down 0.1 percent after the lender completed its $1.45 billion acquisition of Lloyds Banking Group's Australian motor and equipment finance business.

According to a survey published by Australian Industry Group Australia's manufacturing sectorcontracted in December, ending 2013 in red after being in the negative territory for most theyear,. The headline performance of manufacturing index fell to 47.6 from 47.7 in November,contracting for a 2nd consecutive month.

Seoul shares tumbled, dragged down by auto and tech shares amid concerns about the continuousdecline in the yen, which traded near a five-year low versus the dollar in thin Asian trading.

Hyundai Motor declined over 5% and shares of its affiliate Kia Motors Corp. plummeted 6.1%

after the automakers forecast their weakest growth in annual sales in eight years.

Samsung Electronics declined 4.6% on concerns about its earnings outlook as the won jumped toits highest level since mid-2008.

According to a survey by Markit Economics, South Korea's manufacturing sector performanceincreased to a seven-month high in December,. The headline PMI index rose to 50.8 from 50.4in November. This was the third successive month in which the PMI signaled an improvement inoperating conditions.

Indonesia's Jakarta Composite index was rallying 1.1%, Singapore's Straits Times index

was moving up 0.1% and the Taiwan Weighted average ended little changed with a

positive bias.

India's Sensex was down 0.8% and Malaysia's KLSE Composite was losing 0.9%.

Singapore's economy expanded 4.4 percent year-over-year in the fourth quarter, advancedestimates released by the Ministry of Trade and Industry showed. However, the GDP contracted2.7 percent on a sequential basis.

Indonesia's inflation remained almost stable at 8.38 percent in December compared to 8.37 percent in November, Statistics Indonesia reported.





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European Market Recaps

Monday’s European Markets

European stocks traded lower in holiday-thinned trading on Monday.

Benchmark indexes hit five-year highs on Friday.

The Euro Stoxx 50 index of Eurozone bluechip stocks and the Stoxx Europe 50 indexare currently down about 0.2% each.

The key benchmark indexes in Germany, France and the U.K. are down between 0.1percent and 0.2 percent.

According to a report release by the INE Statistical Office Spanish retail sales expanded2 percent year-over-year in November, reversing the 0.5 percent fall seen in October.

Switzerland's current account surplus rose to CHF 19.7 billion in the third quarter from

CHF 13.7 billion in the same period a year ago, data released by the Swiss NationalBank showed.

Asian markets started the week on a firm footing.

A weaker yen lifted Japanese shares to a fresh six-year high, while Chinese shares fellmodestly amid lingering worries over liquidity conditions.

Trading in the U.S. index futures indicate a “flat” open, as investors await pendinghomes sales data due later in the day for further clues on the health of the world'slargest economy.

Tuesday’s European Markets

The major European markets rallied in thin pre-holiday trading on Tuesday,although gains were capped due to market holidays across Europe.

The U.K. and French markets will close around midday for New Year's Eve, while manymarkets including Germany, Switzerland and Italy are closed for the full day.

Following disappointing U.S. pending home sales data released yesterday, investors

await reports on consumer confidence and housing due out later in the day for furtherclues on the health of the world's largest economy.

The Euro Stoxx 50 index of Eurozone bluechip stocks is edging up marginally.

The Stoxx Europe 50 index, which includes some major U.K. companies, ismoving up 0.3%.

France's CAC 40 is gaining 0.2 percent and the U.K.’s FTSE 100 is adding 0.3


Algo Futures - Trending Now - Issue 13 - 05-DeC-13

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