Equity Markets rose and Treasuries fell on speculation that U.S. and China will reach a deal that avoids tariffs due to take hold in 10 days. The S&P 500 Index halted a three-day slide after Bloomberg News reported negotiators are getting near an agreement on the amount of tariff relief in a phase-one accord between the world’s two largest economies. President Donald Trump said discussions with China are going very well, just a day after downplaying the urgency of a deal. Treasury 10-year yields climbed, following the biggest decline since August. The US Dollar dropped. Oil surged. Investors are watching for any signs of progress in talks between Washington and Beijing as worries increase that Trump may slap more tariffs on China this month. A flood of trade news has whipsawed global markets, with the U.S. also threatening levies on France after hitting steel from Brazil and Argentina. American equities reached record highs in November, driven in part by optimism that at least an initial trade deal was in the offing. Meanwhile, U.K. Prime Minister Boris Johnson pledged to deliver Brexit and a tax-cutting budget within 100 days of winning the Dec. 12 election as he unveiled a list of policies his Conservative Party would roll out in the early days of a new administration.
To mark my 1950th issue of TraderNoble Daily Commentary I am offering a special 2 year rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day To demonstrate this value, a monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. If anyone is interested in this offer can you please email me on bryan@tradernoble.com for details
For anyone following my Platinum Service it made 105 points yesterday and is now ahead by 130 points for December, having made 780 points in November, 1649 points in October, 1620 points in September, 2387 points in August, 1153 points in July, 1346 points in June,1722 points in May, 955 points in April and 1027 points in March. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Equities
You wake up every single day and see that the number one thing that’s dictating markets is trade. If those tariffs are avoided, then the recent gains in the market will likely hold.
The S&P 500 climbed 0.6% to close at 3,113.
The Dow Jones Industrial Average rose 147 points to close at 27,649.
The Stoxx Europe 600 Index rose 1.2%.
The MSCI Asia Pacific Index dipped 0.7%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index fell 0.2%.
The Euro was little changed at $1.1077.
The British pound touched the highest against the Euro since May 2017 as traders stepped up bets on a win for the Conservatives in next week’s election. The British Pound climbed 0.8% to $1.3105.
The Japanese Yen weakened 0.2% to 108.85 per dollar.
Bonds
The yield on 10-year Treasuries rose five basis points to 1.77%.
Germany’s 10-year yield climbed three basis points to -0.32%.
Britain’s 10-year yield jumped seven basis points to 0.741%.
Commodities
OIL rallied as Energy Information Administration data showed U.S. crude inventories fell more than expected
West Texas Intermediate crude surged to $58.43 a barrel.
Gold fell 0.3% to $1,480.20 an ounce.
This morning on the Economic Front we already had the release of German Factory Orders which fell 0.4% versus +0.4% expected. At 10.00 am we have Euro-Zone GDP, Retail Sales and the Employment Change. Next, we have U.S. Trade Balance and the Weekly Jobless Claims at 1.30 pm. Finally, at 3.00 pm we have Factory Orders and a speech by Fed Member Quarles.
December S&P 500
I cannot emphasise enough the importance of my updated emails, especially when we see volatility pick up. Yesterday I emailed my Platinum Members to raise their S&P sell level to 3115 before the market had a small sell-off into the close which enabled me to cover this position at my 3109 T/P level and I am now flat. I have mentioned numerous times that all ‘’Open Gaps’’ get filled in the US Indices. Tuesday’s huge 3114/3096 Gap from Monday’s close was always going to be filled while also on Tuesday the Dow traded lower to its 27,347 Gap which happened way back on November 1. The S&P has strong resistance from 3125/3135 and I will be a small seller in this area with a 3143 tight stop. Remember the bulls will do everything in their power to get the S&P to end the week on a high note as they do not want to see a Key Week Reversal registered on the clock following Monday’s Downside Key Day Reversal. Ahead of the Non-Farm Payrolls tomorrow I would expect the S&P to trade sideways to higher unless we get some negative news on trade. Today I will be a small buyer from 3083/3093 with a 3076 tight stop.
EUR/USD
No Change as I am still a buyer from 1.1000/1.1040 with a 1.0965 stop. If the Euro can break and close over 1.1100, this will be bullish for a move to 1.1155 and possibly 1.1250/1.1300. On the other hand, value below 1.1025 tells us to look for a move back to 1.0800/1.0900.
December Dollar Index
I will now lower my Dollar sell level to 97.80/98.20 with a lower 98.55 stop.
December DAX
After the DAX traded higher to my 13120 sell level with a 13154 high print, I emailed my Platinum Members to exit any short position at 13105 and I am now flat. Just like the US Indices the bulls will also do everything in their power to prevent tomorrow ending in a Downside Key Week Reversal. The DAX has resistance from 13220/13290 and I will be a seller in this area with a 13345 stop.
December FTSE
The FTSE just missed my buy level before having a small rally despite the surge in Sterling to two-year highs. The FTSE is back above its Daily Bollinger Band which should be bullish for a further move higher as the market tries to correct its severely oversold condition. I will now raise my buy level to 7100/7140 with a 7065 tight stop.
Dow Rolling Contract
My Dow plan worked well with the market trading higher to my 27730 sell level before falling over 100 points and I used this move lower to cover this position at my revised 27700 T/P level and I am now flat. While the S&P has retraced 60% of Monday’s decline the Dow has so far only retraced 46% of its 880 point fall. The Dow has strong resistance from 27840/27990 and I will be a seller in this area with a 28050 tight stop. I will also be a small buyer on any dip lower to 27430/27530 with a 27330 stop. Remember a break and close below Tuesday’s 27320 low for the Dow and 3070 in the S&P should see the market accelerate to the downside.
December NASDAQ
I am still flat the NASDAQ as the market never came close to my buy level yesterday. The NASDAQ has strong resistance from 8350/8410 and I will be a seller in this area with a 8455 stop.
December BUND
The BUND traded lower to my 170.65 buy level. I am still long with a now 170.80 lower T/P level. I will add to this position at 170.10. For now I will leave my stop unchanged at 169.85 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
As I am back long Silver I will now lower my Gold buy level to 1455/1465 with a 1448 stop.
Silver Rolling Contract
Silver traded lower to my 17.00 buy level. I am still long and I will now lower my T/P level on this position to 17.20 with a now higher 16.55 stop.
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