U.S. Equity Markets closed higher on strong economic data led by the Russell 2000 which ended yesterday with a gain of 1.71% as markets rebounded from yesterday’s decline. Federal Reserve Bank of Chicago President Charles Evans said the economic outlook is improving, Unemployment could hit 5.5% by year’s end, and Interest Rates will remain low for some time. Economic data were also positive. ISM Manufacturing PMI came in above estimates in December, marking the eighth-straight month of growth. The growth was driven by strength in New Orders and Employment. Now, the focus is on the ongoing Senate race in Georgia. The outcome has a huge impact on the government spending picture. If Democrats pick up both seats, they will control both Congress and the White House, and will likely push through a larger stimulus bill. As I go to press Democrat Candidate Warnock has won the first seat as we wait for the announcement of the second seat. European Markets closed lower on tighter lockdowns. British Prime Minister Boris Johnson instituted a national lockdown that will last until mid-February, in an attempt to contain rising Coronavirus infections. The U.K. announced $6.25 billion in new grants to help businesses through the national lockdown. Italian Prime Minister Giuseppe Conte extended Coronavirus-related social-distancing restrictions through mid-January. And Germany extended its Coronavirus lockdowns through the end of January. Elsewhere, Oil closed 5% higher on reports that Saudi Arabia is going to cut oil production by 1 million barrels per day. While Gold gained 0.33% after Cleveland Fed President Loretta Mester said that the Fed should maintain its asset purchases throughout the year. Finally, Bitcoin has soared above $35000 to a new all-time high, after JPMorgan Chase put a long-term price target of $146,000 on the cryptocurrency.
To mark my 2225th 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 150 points yesterday and is now ahead by 225 points for January, having finished December with a gain of 2273 points, 2025 points in November, 2779 points in October, 3042 points in September, 2383 points in August, 3128 points in July, 2580 points in June, 2456 points in May, 4773 points in April, and an incredible 9264 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
The S&P 500 closed 0.71% higher at a price of 3727.
The Dow Jones Industrial Average closed 167 points higher for a 0.55% gain at a price of 30,391.
The NASDAQ 100 closed 0.85% higher at a price of 12802.
The Stoxx Europe 600 Index closed 0.5% lower.
The MSCI Asia Pacific Index rose 0.2%.
This morning the Nikkei closed 0.38% lower at a price of 27,055.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% lower.
The Euro closed 0.4% higher at $1.2295.
The British Pound closed 0.2% higher at $1.3625.
The Japanese Yen closed 0.3% higher at 102.70 per dollar.
Bonds
Germany’s 10-year yield closed four basis points higher at -0.55%.
Britain’s 10-year yield closed three basis points higher at 0.21%.
US 10 Year Treasury closed four basis points higher at 0.96%.
Commodities
West Texas Intermediate crude closed 5% higher at $49.25 a barrel.
Gold closed 0.33% higher at $1,935.20 an ounce.
This morning on the Economic Front we have German, Euro-Zone and UK Markit Services PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed at 10.00 am by Euro-Zone PPI and German CPI at 1.00 pm. Next, we have U.S ADP and Markit PMI at 1.15 pm and 2.45 pm respectively. Finally, at 3.00 pm we have Factory Orders and the FOMC Minutes at 7.00 pm.
March S&P 500
My S&P plan worked well after a volatile overnight trading session. The S&P traded higher to my 3722 sell level before hitting an overnight low at 3687. As I wanted to be flat ahead of the Georgia Senate results I covered my short position at 3715.50. Yesterday was the 11th straight day that the McClellan Oscillator closed below zero. Generally when the S&P trades near all-time highs and the MO is below zero it does not end well for the bulls. Today, I will again be a seller from 3721/3736 with a 3751 stop. The S&P has short-term support from 3663/3678 where I will be a small buyer with a 3649 stop. I will continue to be an aggressive buyer from 3615/3630 with a 3598 wider and ‘’Closing Stop’’.
EUR/USD
Late yesterday the Euro rallied to my 1.2305 sell level. As I wanted to be flat overnight I emailed my Platinum Members to exit any short position at my 1.2290 revised T/P level and I am now flat. This morning the Euro is opening higher at 1.2335. We have strong resistance from 1.2365/1.2405 where I will be a seller with a 1.2445 stop. I will now raise my buy level to 1.2150/1.2200 with a 1.2095 stop.
March Dollar Index
Overnight the Dollar traded lower to my second buy level at 89.30 for a now 89.55 average long position. Large Speculators, mainly comprising of Hedge Funds, are net short 14,875 Futures Contracts, which is the largest net-short position since May 2011. This attended a major Dollar low. I will leave my stop unchanged at 88.75 while lowering my T/P level slightly to 89.55.
March DAX
I am still flat the DAX as the market continues to trade close to all-time highs. I will now lower my sell level to 13800/13900 with a lower 14005 stop.
March FTSE
Overnight the FTSE traded the whole of my sell range for a now 6620 average short position. I will leave my stop unchanged at 6681 while raising my T/P level to 6588.
Dow Rolling Contract
The Dow just missed my 30010 buy level before rallying over 500 points and I am still flat. I will now raise my buy level to 29950/30150 with a higher 29795 stop. I still do not want to be short the Dow at this time.
March NASDAQ
My NASDAQ plan worked well with the market trading lower to my 12590 buy level before rallying to my 12660 T/P level and I am now flat. The NASDAQ has strong support from 12400/12480 where I will again be a buyer with a 12325 stop. I still do not want to be short the NASDASQ at this time.
March BUND
The BUND is selling off aggressively this morning, following the US Treasuries, trading at 177.20-100 points lower than where I marked prices 24 hours ago. I will now lower my sell level to 177.80/178.20 with a tight 178.51 stop. The Bund has support from 176.10/176.60 where I will be a buyer with a 175.70 stop.
Gold Rolling Contract
No Change as I am still a small seller from 1960/1972 with the same 1981 stop.
Silver Rolling Contract
I am not going to chase the price of Silver higher as I leave my 26.20/26.80 buy level unchanged with the same 25.75 stop. If I am taken long I will have a T/P level at 27.15.
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