The Nikkei Soars, U.S. Markets Higher

Asian markets, and especially the Nikkei, were higher today on the heels of yet another record close by the Dow Jones overnight. This is also the final day of a key policy meeting in China so we are waiting on remarks to see if any key reforms are on the way.

Investors will be waiting until later in the trading week as several key comments are due from area Federal Reserve Presidents. We will hear from Dennis Lockhart, Richard Fisher and Narayana Kocherlakota and listening to see any hint as to when the Fed will begin to taper its asset purchase program. There is some buzz it could begin by December 2013 and not in Q1 of 2014.

STOCKS

After Friday’s record setting close, the DJIA continued to extend gains closing up 21.32 points to end at 17,783.10. The S&P 500 rose 1.27 points and finished at 1,771.88, a whisper away from its record close of 1,771.95 on Oct. 29. We are expecting more gains today, with some slight corrections. However, an S&P at 1,800 by the end of December is not out of the question and neither is a Dow Jones at 15,800. The Nasdaq Composite was pretty much flat closing up less than one point to 3,919.79.

The Nikkei 225 is currently up 1.85 percent at 14,533.75 as the USD/JPY is hitting its highest level in 2 months at 99.534. Thanks to the weakening yen the index has risen to a four week high led by the Sony Corporation which is up over three percent.

In mainland China, the Shanghai Composite is up nearly 10 points coming off a multi week low yesterday. Investors are remaining cautions after an announcement by the supervisory board that oversees state owned enterprises (SOEs) that said it will allow private investors to buy up to 15 percent in SOEs.

The Kospi soared one percent at one point and is still trading 14 points higher. We should be breaking a six day losing streak if this continues. In Australia, the ASX 200 was up a fraction or two points to 5389.20. We were above 5,400 earlier in the day.

CURRENCIES

USD/JPY (99.511) is moving very close to a key resistance at 99.80 where it has failed before. If it breaks above this level we will target 100.00 and then 100.60.

GBP/USD (1.5980) is finding support near 1.5980/50 and consolidating. Not expecting a bounce here. If we do see a correction higher than 1.6000 will hold bringing back sellers. EUR/USD (1.33940) is starting to trade between 1.3319 towards 1.3440. Until we see a break either way, expect to consolidate here for a bit of time. We could see gains if we move above 1.3450 and very bearish below 1.3320.

COMMODITIES

Looking at WTI Crude (94.83) is trading in a range from the support near 94.05 towards resistance at 96.00. WTI Brent (106.18) has broken through 106.00 and can now test 107.50 with a break higher aiming for 108.00.

Copper (3.249) continues to trade sideways from 3.20 toward 1.3570. Gold (1277.60) continues to move lower as we are testing 1275.00. A break below that will aim for 1250.

TODAY’S OUTLOOK

This week is devoid of major economic data, As such, we have several key Federal Reserve area presidents making comments this week. We are looking for any signs as to when the Fed will start to taper back its $85 billion a month asset purchase program. We could see it beginning in December. We will wait and see.