Profit Taking Sees Dow Jones Slump as Tapering Fears Grow

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Stock Market Trading

: 13 December 2013

A flat start is expected in Europe as traders continue to fret about next week.

The major indices look set to record another weekly loss and the bulls are really starting to sweat.

Even this week's decline hasn't been enough for bargain hunters to show their heads as the possibility of tapering beginning next week has them waiting on the sidelines for even deeper discounts.

Good economic data seems to be bad for stock markets again and the Fed's interpretation of said data is what will probably decide whether or not we get a 'big' correction.

We saw another sign that the US economy is on the mend yesterday as retail sales came in slightly better than forecast at 0.7%, beating expectations for a gain of 0.6%.

However, to take the brave approach and actually bet that the Fed believes the current economic growth rate is strong enough to be self sustaining could be a bit optimistic.

Despite that, investors do not seem to be taking any chances and continued to exit their long positions, pushing the Dow Jones 112 points down to 15,728.



Stock Market Trading

: 12 December 2013

European equities are set to open significantly lower as concerns over Fed taper get stronger.

Spread trading markets had already been looking fairly precarious after the recent rally, and what initially looked like a bit of lose powder at the summit may now be snowballing into a full blown avalanche.

With a growing numbers of market participants looking to book profits, the Dow Jones plunged 151 points to 15,840.

The budget deal in the US, coming just one week before the FOMC meeting, has got the bearish ball rolling as it may remove one of the key reasons for maintaining Fed stimulus.

In addition, today's US Retail Sales could certainly add to the declines if it beats expectations.



Stock Market Trading

: 09 December 2013

European stock markets are set to start firm as the euphoria over the goldilocks NFP figure and some decent export data from China over the weekend props up the bulls.

The US Non-Farm Payrolls report showed that employers added more than 200,000 jobs during November, surpassing estimates for an increase of 180,000, with the unemployment rate also dropping to 7%, the lowest level since 2008.

The reaction was a sharp rise for the Dow Jones, which finished the day 194 points higher at 16,014.8, thus recovering some of the week's losses.

However, despite Friday's 'just right' number and subsequent rally, the major indices still registered a loss for the first week of December as traders continue their search for a Santa rally catalyst.

A much lighter economic calendar this week is unlikely to provide anything significant to get bullish about, so we could see lots of to-ing and fro-ing as traders jostle for position ahead of next week's FOMC meeting.


By Jonathan Sudaria, 13 December 2013


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