Donald Trump is poised to pull off a huge electoral upset and become the 45th President of the United States, a repudiation of the political establishment that is jolting financial markets as it promises to reshape the nation’s priorities and America’s relationship with the world. The real-estate developer and reality-TV star, a Republican who has never held public office, gained a decisive advantage in the Electoral College after winning States including Florida, Ohio, North Carolina and Pennslvania, according to the Associated Press. He is winning by 266-215 as I post my Daily Commentary, according to AP, with 270 required for victory.
To mark my 1200th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2750 for my Platinum Service which includes 1/4 updated emails throughout the trading day. This offer is open to both new and existing members and if anyone is interested in this deal you can contact me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 116 points yesterday and is now ahead by 452 points for November having made 1582 points in October. The previous four months saw gains of 1142, 1782, 1682 and 2550 points respectively. Since I started this Platinum Service in June 2015 it has averaged a monthly gain of over 1900 points.
In any normal year, any normal candidate would have seen his campaign ended after the controversies Trump encountered. He performed poorly in his debates with Clinton. In October, a 2005 tape from the show ”Access Hollywood” was released in which he made lewd comments about groping women. After Trump denied ever engaging in the actions he described on the tape, multiple women accused the candidate of making unwanted sexual advances toward them in the past..
Financial markets around the world were in tumult on the brink of a Trump victory. Panicked traders rushed to unwind bets they piled into over the previous two days amid predictions Clinton would sweep to victory. Futures in the S&P plunged 5%, reaching levels where Exchange rules bar further declines. US Treasuries, the Yen, Gold all soared the most since Britain’s surprise vote to leave the European Union sent shock waves through markets in late June.
With Trump on the brink of victory, much of President Barack Obama’s legacy is at risk of being scrapped. Trump has promised to repel the Affordable Care Act and renege on Obama’s 12-Nation Trade Deal with Pacific Rime countries, the Paris Accord to reduce global warming and a deal with Iran to constrain the country’s nuclear ambitions. The Republican also vowed to stop the entry of refugees and other migrants from the Muslim world and to build a wall on the Mexican Border to stop undocumented immigration.
With the Republican predicted to hold on to both the House and Congress it means a clean sweep making it easier for Trump to implement his policies. The Nikkei closed down 5.36% at 16,250.
The other big news out from yesterday comes from China and relates to market-focussed policy efforts to take the heat out of coal and iron ore space. News service MNI reported yesterday that Chinese authorities have taken steps to crack down on “illegal coal trading”, obviously concerned about the stratospheric rise in coal prices this year, that’s apparently been turbocharged by additional local investor buying interest. Spot hard coking coal prices (most sales would still likely be under the quarterly contracts) had risen more than 3½ fold this year, with Newcastle thermal coal futures more than doubling. Three Chinese futures exchanges that trade in such commodities yesterday increased margin requirements and transaction fees on coking, thermal, and steel-related futures prices. January thermal coal futures on the Zhengzhou Commodity Exchange fell 5% Tuesday to close at CNY670.60 a ton. On the Dalian exchange, coking coal futures lost 6%. Ex-China Platts coking coal and Newcastle futures look to have risen further yesterday. Iron ore was up further too.
Clearly this will very likely take more heat out of the very pointiest end of the market but it’s been the admitted success of reforming the Chinese coal industry that’s led to market shortfalls. Selected more efficient and less polluting Chinese producers have recently been given the green light to increase output. Australian and other global producers are also no doubt lifting their production sights. That will take some more time.
This morning on the economic front we have UK Trade Balance at 9.30 am, followed by European Commission Economic Forecasts at 10.00 am. Finally we have US Wholesale Inventories at 3.00 pm. Of course the economic data will not matter today as the Financial Markets adjust to the huge political change in America.
The Fed’s Kashkari is die to speak this afternoon at 4.30 pm and it will interesting to hear his views on the markets after this morning’s events.
December S&P 500
Now you can see that when we have a major market changing event that I am always flat the markets. The volume of short-covering and buying of the US stock market was enormous since the Futures market re-opened at 11.00 pm on Sunday night. With the unexpected Trump victory, traders had then to reverse these massive bets. Yesterday the S&P hit both my buy level at 2119 which I unfortunately covered too early at 2122 before the market subsequently hit my 2040.50 sell level which I then covered for a small gain at 2039 before we traded lower to 2034 and I went in to the election result completely flat. Overnight the S&P hit its 5% downside limit at 2028 before bouncing 70 handles as we see the European markets open where I have no doubt the Central Banks are stepping in to protect the markets just like what happened post Brexit. The S&P has major support at 2040 and if we see the market build value below here then there is a fair chance that we have an Intermediate/Long Term top in the market. Given the significance of this support level I will be a buyer on any dip lower to 2042/2055 with a wider 2028 stop. I have to use wider parameters given the volatility. The S&P has now got a massive down gap from yesterday’s 2135.50 close and given the significance of this morning’s events I cannot see this ”Open Gap” getting filled any time soon. The S&P is also trading back below the 2115/2125 resistance level and today I will be a small seller on any rally higher to 2118/2128 with a 2136 stop.
EUR/USD
My Euro plan worked well with the market trading lower to my 1.1035 buy level before rallying to the major 1.13 resistance level on the expected Trump victory. Sticking with my plan of going flat into the election I emailed my Platinum Members to exit this position at 1.1050 and I am now flat. As mentioned last week that if anyone has any US Dollar exposure to cover at least 50% of their exposure below 1.11 as to me it is only a matter of time before the US Dollar reverses its gains of the past two years. As I post this commentary the Euro is back trading at 1.11 and today I will be a buyer on any further dip lower to 1.1045/1.1090 with a 1.0990 stop.
December Dollar Index
I am still flat the Dollar and today I will lower my sell level slightly to 98.00/98.40 with a 98.75 stop. Remember a break and close below 96.00 will be very bearish and should see the US Dollar accelerate to the downside. Conversely a break and close over the December 2015 high at 100.50 will be positive for the Dollar.
December DAX
The DAX has already fallen over 600 points from yesterday’s high in what has been an incredible trading session so far. I am still flat the DAX and given the volatility of this market I am going to stay out of the DAX and concentrate on the other Indices that I cover for today. The DAX opened this morning at 10,020 and has already bounced 300 points making it impossible to call for the rest of the trading session.
December FTSE
I am still flat the FTSE which just like the DAX above has also bounced over 300 points form its overnight low at 6490. Today I will use any further rally higher to 6790/6830 to go short with a 6870 stop. Given the ramifications of a Trump victory I do not want to be long the FTSE at this time.
Dow Rolling Contract
The Dow had an incredible 1000 range overnight on what must be one of the most dramatic trading sessions since post-nine/eleven in 2001. I am still flat the Dow which has already bounced over 500 points off its 17477 low print to trade back above the key 18000 level. Today I will be a small seller on any further rally higher to 18120/18180 with a 18260 wider stop. I do not want to be long the Dow at this time preferring instead to buy the S&P at mentioned in my above commentary. However the key level to watch for the Dow is from 17880/17950 and a break and close below here should finally shown we have at least an Intermediate top in the Dow which has basically traded sideways over the past four months.
December BUND
The Bund traded lower to my 161.70 buy level. Unfortunately in sticking with my theme of being flat into this morning I covered this long position at my revised 161.81 T/P level and I am now flat. Already the Bund has traded higher to 163.20 on the Trump victory and today I will look to sell the market on any rally higher to 162.80/163.20 with a tight 163.45 stop. Despite the huge move higher this morning I do not want to be long the Bund at this time.
Gold Rolling Contract
Gold got crushed yesterday before reversing all those losses and more by having a near $50 rally on a Trump victory. For us traders a Trump victory is the best news in a long time as we are guaranteed plenty of two-way price action for as long as he stays President. For the first time in many years I can see a huge future for trading and spread betting, and it will not be long before banks start to embrace trading again as a meaningful income. Yesterday after Gold hit my 1274 buy level I emailed my Platinum Members to exit this position for a small gain at 1278.50 and I am still flat. Today I will again look to buy Gold on any dip lower to 1285/1293 with a 1279 tight stop.
Silver Rolling Contract
I am still flat Silver and today I will now raise my buy level to 18.20/18.50 with a 17.80 stop as unfortunately Silver just missed my 18.15 buy level with a 18.16 low print after I posted yesterday morning.
Following the success of the NFP Live Trading Day and Education Session in London on September 2, Paul Wallace and I are bringing this event to Dublin for the December NFP day on Friday December 2nd. If anyone is interested in attending this event the details are on the following link:
https://www.eventbrite.com/e/live-nfp-trading-day-dublin-tickets-28159689389
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