Despite the fact that talks on the next U.S. Stimulus Bill will not start for another couple of weeks at the earliest, COVID-19 treatment optimism boosted markets. The U.S. Food and Drug Administration (“FDA”) said it had granted emergency use authorisation for COVID-19 convalescent plasma to be used as a treatment for hospitalised patients. This is the second treatment approved for emergency use in the U.S. There were also reports that the White House could fast-track Oxford University and AstraZeneca’s vaccine candidate for approval. COVID-19 cases numbers moved in the right direction, with daily new cases falling to the lowest level in two months. The Dow led the U.S Indices higher, closing with a gain of 1.36% while the S&P surged to a new all-time high closing at 3431. European Markets rallied hard with the Euro-Stoxx closing 2% higher after the European Commission proposed $93 billion in financial support to its Member States in order to help them pay for short-term worker schemes that keep people employed. Germany’s Labour Ministry is said to be seeking a one-year extension of supplemental pay for employees on reduced work hours, while Italian Health Minister Roberto Speranza said the government is not considering locking down the economy once more despite a recent resurgence in Coronavirus cases. Economists boosted their growth outlook for the U.K. in the third quarter, expecting the economy to grow a record 14.3% as consumer spending rebounds. The FTSE closed higher by 1.7% after struggling for most of the past month. Elsewhere, Bond Market Yields rose while the Euro closed flat.
To mark my 2125th 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 lost 172 points yesterday and is now ahead by 1895 points for August having ended July with a gain of 3128 points, 2580 points in June, 2456 points in May, 4773 points in April, an incredible 9264 points in March, 2223 points in February and 2142 points in January. 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 closed 1% higher at a price of 3431, a new all-time high.
The Dow Jones Industrial Average rose 378 points for a 1.35% gain to close at 28,308.
The NASDAQ rose 0.61%, closing at a new all-time high at 11,626.
The Stoxx Europe 600 Index rose 2%.
The MSCI Asia Pacific Index fell 0.2%.
The Nikkei closed 1.35% higher at 23,296.
Currencies
The Bloomberg Dollar Spot Index closed flat.
The Euro closed 0.1% higher at $1.1802.
The British Pound closed 0.1% higher at $1.3099.
The Japanese Yen closed 0.2% higher at 106.01 per dollar.
Bonds
The yield on 10-year Treasuries closed two basis points higher at 0.66%.
Germany’s 10-year yield rose three basis points to -0.48%.
Britain’s 10-year yield also closed one basis point higher at 0.21%.
Commodities
The Bloomberg Commodity Index fell 0.3%.
West Texas Intermediate closed flat at $41.54 a barrel.
Gold closed 0.1% lower at $1,935.10 an ounce.
This morning on the Economic Front we already had the release of German Q2 Final GDP which came in lower than the -10.1% expected with a -9.7% print. At 9.00 am we have German IFO Business Climate/Assessment and this is followed at 11.00 am by the UK CBI Distributive Trades Survey. At 2.00 pm we have the U.S Housing Price Index. Finally, at 3.00 pm we have the Richmond Fed Manufacturing Index, Consumer Confidence and New Home Sales.
September S&P 500
The S&P surged to new highs yesterday with the market now above my 3400/3440 target level, trading at a price of 3445 this morning on optimism that the FAA will soon approve a vaccine ahead of the winter season. This market is certainly getting ahead of itself but with the level of Fed support it is almost impossible to be short, despite how overvalued the S&P and NASDAQ are at this time. Yesterday after the S&P traded higher to my 3420 sell level, the market traded sideways for a few hours and this enabled me to cover this position at my 3413 revised T/P level before we surged into the close and again overnight. I am looking for the S&P to have a retracement back to the 3372 level and possibly 3345 before rallying to new highs again. Today, I will be a small seller from 3457/3469 with a 3481 stop. The S&P will have initial support at the February high of 3393 and I will be a small buyer from 3389/3402 with a 3379 stop.
EUR/USD
The Euro just missed my 1.1860. sell level and I am still flat. Given the level of optimism to ‘’Risk’’, I am not going to chase the Euro lower and I will leave my 1.1860/1.1910 sell level unchanged with the same 1.1955 stop. I will now raise my buy level to 1.1700/1.1750 with a higher 1.1655 stop.
September Dollar Index
No Change as I am still a buyer on any dip lower to 92.30/92.70 with the same 91.95 stop.
September DAX
This morning the DAX is trading 500 points higher than where we were last Friday afternoon with the market close to new all-time highs. After the DAX hit my 13060 sell level yesterday, we had a small sell-off and I used this move lower to exit any short position at my 13028 revised T/P level as emailed to my Platinum Members and I am now flat. The DAX is still benefiting from the massive Euro130bn Stimulus from the German Government while yesterday’s announcement from the Labour Minister seeking a one-year extension of supplemental pay for employees on reduced hours certainly added to the positive tone. This morning the DAX is opening higher at 13200 having closed a hefty 2.4% higher yesterday. The DAX has resistance from 13270/13370 where I will again look to sell with a tight 11455 stop. I will now raise my buy level to 12950/13050 with a 12855 stop.
September FTSE
The FTSE never came close to my buy range yesterday as we closed 1.7% higher and I am still flat. I will now raise my buy level higher to 6030/6080 with a higher 5985 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The news that Salesforce.com (develops enterprise cloud computing solutions) is replacing Exxon Mobil, Amgen (biotech) replacing Pfizer and Honeywell International ( operations include aerospace products and services, control technologies for buildings) replacing Raytheon Technologies on August 31 gave the Dow a huge boost yesterday. This rally has continued overnight with the Dow now trading at 28500 and is now close to its Feb all-time high. This move higher did not suit as I was stopped out of my 28170 average short position at 28425 earlier this morning and I am now flat. The surge in the Dow yesterday helped Breadth with the McClellan Oscillator improving to close at -75 last night. The Dow has support from 28100/28250 where I will be a small buyer with a 27965 stop. I no longer want to be short the Dow at this time.
September NASDAQ
Incredible two-way volatility in the NASDAQ yesterday with the market surging on the open, then dropping 200 points, before regaining most of those losses this morning. I was stopped out of my 11570 short position at 11705 before emailing my Platinum Members to go short again at a price of 11715. Subsequently the NASDAQ made a low of 11528, enabling me to cover this position at my 11615 T/P level. The rally overnight has me short the NASDAQ again here at 11680. I will add to this trade on any further move higher to 11780 with a 11905 stop. My T/P level on this latest short position will be 11605 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
September BUND
I am still flat the Bund and today I will lower my buy level to 175.70/176.20 with a lower 175.35 stop.
Gold Rolling Contract
No Change as I am still a buyer from 1899/1911 with the same 1887 stop.
Silver Rolling Contract
It took a while buy finally Silver rallied to my 26.91 T/P level on my 26.50 long position and I am still flat. Silver has support from 25.40/26.20 where I will again be a buyer with a 25.15 stop. If I am taken long I will have a T/P level at 26.51.
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