Equity Markets advanced on signs that China may be planning further measures to support its economy as it reels from a virus-induced slowdown and after Federal Reserve officials signalled they are not anxious to raise Interest Rates anytime soon. Gains for chipmakers and banks led the S&P 500 Index and Nasdaq Composite to record highs after Bloomberg News reported that China’s latest moves to aid growth include possible bailouts for hard-hit industries. The US Dollar climbed to the strongest since October after data on Housing Starts and Building Permits exceeded analysts’ estimates. Treasuries held steady after minutes showed Federal Reserve officials viewed monetary policy as appropriate “for a time.” The Stoxx Europe 600 Index reached new highs, and shares rose in Tokyo, Hong Kong and Sydney. The Japanese Yen fell to a nine-month low on concerns that Japan’s economy may slip into a recession. Oil gained as U.S. sanctions on Russia’s largest producer and conflict in Libya put the focus on supply threats. Investors appear relatively confident in the ability of policy makers to contain fallout from the deadly coronavirus, even after Apple Inc. spooked markets earlier this week by warning of a slowdown in sales. Data released Wednesday showed the Housing Market remains a bright spot for the U.S. economy amid sluggish business investment. Elsewhere, Gold traded near its highest level since 2013, while Palladium extended its record-breaking rally on forecasts for a widening supply deficit.
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For anyone following my Platinum Service it made 6 points yesterday and is now ahead by 880 points for February, having made 2142 points in January, 818 points in December, 780 points in November, 1649 points in October, 1620 points in September and 2387 points in August. 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
The S&P 500 Index advanced 0.5%to close at yet another record high at 3386.
The Dow Jones Industrial Average rose 115 points closing at 29,348.
The NASDAQ 100 closed 1% higher at 9718.
Stoxx Europe 600 Index jumped 0.8%.
The MSCI Asia Pacific Index fell 0.1%.
The MSCI Emerging Market Index advanced 0.7%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index rose 0.2%.
The Euro rose 0.2% to $1.0808.
The British Pound fell 0.6% to $1.2924.
The Japanese Yen weakened 1.3% to 111.28 per dollar.
Bonds
The yield on 10-year Treasuries was little changed at 1.56%.
Germany’s 10-year yield fell one basis point to -0.42%.
Britain’s 10-year yield fell one basis point to 0.6%.
Japan’s 10-year yield rose one basis point to -0.05%.
Commodities
West Texas Intermediate crude advanced 2.4% to $53.28 a barrel.
Gold strengthened 0.6% to $1,611.87 an ounce.
This morning on the Economic Front we already had the release of German PPI which came in higher than the +0.1% expected with a rise of 0.8%. Also released was the GFK Consumer Confidence which printed 9.8 as expected. At 9.30 am we have UK Retails Sales and this is followed at 10.30 am by a speech from the ECB’s De Guindos. Next, we have the ECB Minutes from last month’s meeting at 12.30 pm, followed at 1.30 pm by U.S Weekly Jobless Claims and the Philly Fed Manufacturing Survey. Finally, at 3.00 pm we have Euro-Zone Consumer Confidence and a speech from Fed Member Barkin at 6.20 pm.
March S&P 500
The technology sector remains the best performing economic sector in the S&P so far this year, with an advance of 11.82%, The S&P which is an Index with a relatively high number of tech issues, is out ahead of the Dow Jones so far this year. While the S&P carried to a new all-time high yesterday, the Dow closed 220 points below 29,568, the high on February 12. The S&P made a high overnight at 3396.75, frustratingly missing my initial 3397 sell level from yesterday before falling 15 Handles and I am still flat. The S&P has strong resistance from 3404/3418 and I will now raise my sell level to this area with a higher 3428 stop. I will also raise my buy level to 3363/3373 with a higher 3355 stop.
EUR/USD
The Euro has closed lower in 10 of the last 13 trading sessions. The Daily Sentiment Index dropped to just 6% bulls last night while the 5-Day Average is at 8.4%, This is the lowest level of trader optimism for the Euro in nearly 3 ½ years, since November 2016. The Euro has trendline support at 1.0750 and today I will be a buyer on any further dip to 1.0715/1.0755 with a 1.0680 stop. Meanwhile, I will leave my 1.0860/1.0900 sell level unchanged with the same 1.0945 stop.
March Dollar Index
No Change as I am still short at 99.25 with the same 99.65 stop. I will leave my 99.10 T/P level unchanged and if any of the above levels are hit, I will be back with a new update for my Platinum Members.
March DAX
I am still flat the DAX and ahead of the ECB Minutes at 12.30 pm I will now raise my sell level to 13850/13910 with a higher 13955 stop.
March FTSE
The FTSE is trading 100 points since I exited my latest long position on Tuesday at 7330. The weaker Pound versus the US Dollar is certainly helping the FTSE at this time. The market has support from 7325/7365 and I will be a buyer on any dip to this area with a 7280 stop.
Dow Rolling Contract
As mentioned in my S&P Commentary above, we still have negative divergence between the Dow and the S&P/NASDAQ at this time. The latter two Indices seem to making new highs almost every other day. I did some research on Telsa yesterday. The explosive rally in TSLA Stock has once again trust the electric car maker into the spotlight. TSLA shares peaked at $968 on February 4 for a 132% gain in just over one month. Tesla has been one of the most remarkable stocks of the last decade. Since its June 2010 IPO at $17 per share, the stock has gained an astounding 4,474%. Yet this company is still losing money. Despite the rally to new highs yesterday internally the market continues to struggle with the MO closing basically unchanged at -18 while the VIX is still high at 14.38, 2.5 points above its January low. I am still flat the Dow and I will continue to be an aggressive seller from 29595/29745 with a higher 29855 stop. Despite yesterday’s move higher I will leave my 29000/29150 buy level unchanged with the same 28895 stop.
March NASDAQ
The NASDAQ has now risen 9% since it’s 8900 low in late January, very much reminiscent of its melt-up in the first quarter of 2000 before the market topped in late March that year. Subsequently the NASDAQ crashed, falling 80%. The NASDAQ has strong resistance from 9800/9930 and I will be an aggressive seller in this area with a 10005 wider stop.
March BUND
I am still flat the Bund and today I will raise my sell level to 175.15/175.55 with a 175.85 higher stop. I still do not want to be long the Bund at this time.
Gold Rolling Contract
The Daily Sentiment Index for Gold has now risen to 86% bulls, while Large Speculators remain net-long 42.1% of Open Interest in Gold Futures and Options. This is at the top end of their historic range. For these reasons I am happy to be a seller of Gold on rallies and I will leave my 1635/1650 sell level unchanged with the same 1661 stop.
Silver Rolling Contract
Silver continues to underperform Gold and after the market traded lower to my 18.20 buy level I emailed my Platinum Members to exit any long position at 18.26 and I am now flat. Overnight Silver did rally to a high of 18.40. Today I will be a buyer from 17.50/17.90 with a 17.15 stop. If I am taken long I will have a T/P level at 18.10.
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