Initially, U.S Equity Markets rose following the Democrats passing a Continuing Resolution to keep the government funded through December 11 after reaching an agreement with the White House on spending measures. Vaccine developments also made headlines. Johnson & Johnson (JNJ) announced it had begun late-stage trials for its COVID-19 vaccine candidate, while AstraZeneca’s (AZN) vaccine trial remains on hold in the U.S until the company verifies the safety for patients. And, in an effort to allay any fears around safety and efficacy, health officials were said to have drafted more stringent requirements for a COVID-19 vaccine to receive rapid approval. In today’s economic data, U.S. Markit Purchasing Managers Index (“PMI”) came in a little above expectations. Manufacturing PMI rose, while Services PMI fell. However, all changed with the NASDAQ leading a rout lower in the last three hours of trading, finishing with a loss of 3.16%. Both the S&P and NASDAQ have now closed lower for five of the past six trading sessions. Meanwhile in Europe, the European Central Bank called on the European Union to make its Coronavirus recovery fund permanent in order to help more vulnerable countries. Markit Euro-Zone’s preliminary Manufacturing Purchasing Managers’ Index (“PMI”) data for September were stronger than expected, rising versus August. British Prime Minister Boris Johnson encouraged individuals to work from home while introducing measures to contain the Coronavirus resurgence. These measures stop short of a lockdown. The German state of Bavaria tightened Coronavirus restrictions, including earlier closure of restaurants and more mask-wearing measures. Elsewhere, Oil closed 0.5% lower as a drawdown in gasoline inventories indicated future demand for crude, but overall crude inventories did not fall as much as expected. While Gold fell to a two-month low on Dollar strength.
To mark my 2150th 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 426 points yesterday and is now ahead by 1952 points for September, having made 2383 points in August, 3128 points in July, 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 2.37% lower at a price of 336.
The Dow Jones Industrial Average closed 520 points lower for a 1.92% loss at a price of 26,763.
The NASDAQ 100 closed 3.16% lower at a price of 10,833.
The Stoxx Europe 600 Index closed 0.7% higher.
The MSCI Asia Pacific Index rose 0.5%%.
This morning the Nikkei closed 1.11% lower at 23,087
Currencies
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.3% lower at $1.1665.
The British Pound closed unchanged at $1.2705.
The Japanese Yen closed 0.4% lower at 104.30 per dollar.
Bonds
The yield on 10-year Treasuries closed two basis points lower at 0.65%.
Germany’s 10-year yield closed two basis points lower at -0.52%.
Britain’s 10-year yield closed four basis points higher at 0.20%.
Commodities
The Bloomberg Commodity Index fell 0.42%.
West Texas Intermediate closed 0.6% higher at $39.85 a barrel.
Gold closed 2.5% lower at $1859.10 an ounce.
This morning on the Economic Front we have the German IFO Business Climate and the Euro-Zone Economic Bulletin at 9.00 am. At 11.00 am we have the UK CBI Distributive Trades Survey and this is followed by the U.S Weekly Jobless Claims at 1.30 pm. Finally, at 3.00 pm we have New Home Sales while Fed Chairman Powell Testifies to Congress for the third consecutive day.
December S&P 500
The S&P just missed my initial 3320 sell level with a 3319.25 high print before reversing all of Monday’s rally to sit at 3220 this morning. This move lower hit my 3274 buy level before we rallied to my 3281.50 revised T/P level and I am now flat. I am surprised by the aggressiveness of the sell-off given the fact that the VIX only closed 6.4% higher at 28.58. As I mentioned on Tuesday, the S&P must hold the key 3170/3185 support level as a break and close below here for a few days signals a move lower to 2800/2900. I will be an aggressive buyer from 3180/3198 with a tight 3165 stop. I will now lower my sell level to 3280/3295 with a 3311 stop.
EUR/USD
I am still flat the Euro which closed below its 50 Day MA for the second consecutive trading session. This is an ominous sign for a move lower to 1.1400/1.1480 over the coming days. I will now lower my Euro sell level to 1.1705/1.1750 with a 1.1795 stop. The Euro has near-term support from 1.1570/1.1610 where I will be a buyer with a 1.1535 tight stop. I will still be an aggressive buyer on any dip lower 1.1420/1.1480 with the same 1.1365 wider stop.
December Dollar Index
I am still flat the Dollar and I will now raise my buy level to 93.70/94.10 with a higher 93.25 stop.
December DAX
The DAX got hit hard again late yesterday, following on from Monday’s 5% fall. This move lower saw my 12600 buy level being hit. As I had lower buy levels in the other Indices, I emailed my Platinum Members to exit any long position at 12621 and I am now flat. This morning the DAX has opened lower trading at 12500 as I go to press. The DAX is now trading over 800 points lower from Monday’s high. The market is oversold and today I will be a small buyer from 10325/10425 with a 10245 stop. If I am taken long I will have a T/P level at 10490.
December FTSE
Overnight the FTSE traded lower to my buy range and I am now long at a price of 5795. The FTSE is severely oversold and should gain support from the renewed weakness in Sterling. I will leave my stop unchanged at 5745 while lowering my T/P level at 5835. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Initially my Dow plan worked well as the market rallied to the 50 Day Moving Average by hitting my 27500 sell level. Subsequently we saw a bloodbath with the Dow falling 800 points into the close. I covered my short-position at 27360 and I am now long at an average rate of 26950. As long as the Dow does not break and close below 26500 I am happy to hold this position especially given the number of points made yesterday. I will add to this existing position at 26600 with a now lower 26445 stop. I will also lower my T/P level to 27030 and if any of the above levels are triggered I will be back with a new update for my Platinum Members.
December NASDAQ
The NASDAQ completely reversed its rally over the previous two days to hit Monday’s low. I am now long at an average rate of 10875 with the same 10695 closing stop. I will now lower my T/P level on this position to 10930. I will be an aggressive buyer from 10500/10600 with a 10395 stop. Remember a break and close below 10500 signals an initial move lower to 9900.
December BUND
The Bund continues to trade in a narrow range and I am still flat. I am not going to chase the Bund higher and I will leave my 173.65/174.05 buy level unchanged with the same 173.15 stop.
Gold Rolling Contract
I was lucky with my 1875 long Gold position as the market rallied to a morning high at 1902 which enabled me to cover this position at 1899 before Gold followed Silver lower in the afternoon and again overnight. Gold has strong support from 1820/1835 where I be a buyer with an 1808 stop.
Silver Rolling Contract
Silver hit an overnight low at 21.75 and is now down 25% from its late August high. Thankfully Silver rallied to my 23.85 T/P level on yesterday morning’s 23.35 long position and I am still flat. Silver has support from 21.00/21.70 where I will be a buyer with a 20.45 stop.
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