U.S. Equity Markets rose again, led by the Russell 2000 which closed higher by 4% after doubling in price since the March 2020 lows. The Dow closed higher by 1.44% while the NASDAQ 100 fell 1.4%. Markets gained for the second straight day. Tuesday’s Georgia Senate runoff remained in headlines. As I go to press the second seat has gone to the Democrats which means they now have control of Congress and could push through larger spending packages. Senate Minority Leader Chuck Schumer said that pushing through $2,000 stimulus cheques were the top priority if Democrats do indeed win control. The Federal Reserve also released its Meeting Minutes for the December meeting, saying that it will give markets plenty of notice before dialling back bond purchases. Economic data may be flashing a warning sign, though. The 10-Year Treasury closed over 1.05%, its highest level since March. European Markets again closed higher. Markit Euro-Zone’s final composite Purchasing Managers’ Index (“PMI”) data for December fell versus the flash reading, but rose versus November, signalling an improving economic outlook. France’s preliminary Consumer Price Index data for December was weaker than expected, but held steady versus November, implying economic activity did not erode despite Coronavirus restrictions. The German government extended its national COVID-19-related social-distancing restrictions until the end of January. Energy stocks rallied after Saudi Arabia agreed to cut oil production to allow other members of the Organisation of the Petroleum Exporting Countries to increase theirs. Elsewhere, Gold fell 1.73% on profit-taking after its recent surge above $1,900, while Oil was flat, consolidating its recent run higher.
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For anyone following my Platinum Service it lost 216 points yesterday and is now ahead by 11 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 0.57% higher at a price of 3748.
The Dow Jones Industrial Average closed 438 points higher for a 1.44% gain at a price of 30,829.
The NASDAQ 100 closed 1.4% lower at a price of 12623.
The Stoxx Europe 600 Index closed 0.5% lower.
The MSCI Asia Pacific Index rose 0.2%.
This morning the Nikkei closed 1.6% higher at a price of 27,490.
Currencies
The Bloomberg Dollar Spot Index closed 0.1% lower.
The Euro closed 0.3% higher at $1.2325.
The British Pound closed 0.2% lower at $1.3598.
The Japanese Yen closed 0.4% lower at 103.25 per dollar.
Bonds
Germany’s 10-year yield closed two basis points higher at -0.53%.
Britain’s 10-year yield closed three basis points higher at 0.24%.
US 10 Year Treasury closed eleven basis points higher at 1.07%.
Commodities
West Texas Intermediate crude closed 0.73% higher at $49.61 a barrel.
Gold closed 1.73% lower at $1,902.20 an ounce.
This morning on the Economic Front we already had the release of German Factory Orders which rose 2.3% versus -0.5% expected. At 9.00 am we have the Euro-Zone Economic Bulletin and this is followed by UK Markit Construction PMI at 9.30 am. Next, we have Euro-Zone CPI, Economic Sentiment Indicator, Consumer Confidence and Retail Sales at 10.00 am. At 1.30 pm we have the U.S Weekly Jobless Claims and the Trade Balance. Finally, at 3.00 pm we have ISM Services PMI and a speech from Fed Member Evans at 6.00 pm.
March S&P 500
Another incredible day of volatility with the VIX at one stage lower by 12% before closing just 1% lower as the S&P sold off into the close after demonstrators stormed Capital Hill. We are seeing an incredible amount of price divergence across the board with the Dow closing 1.4% higher while the NASDAQ 100 fell by 1.4%. The three main leaders of 2020 – Apple, Google and Microsoft are lagging. Patience is key here as I am still looking for at least a temporary top in the market over the coming weeks. Yesterday my S&P plan did not work well with the market trading the whole of my sell range for a 3731 average short position before stopping me out of this trade at 3751 and I am still flat. This morning the market is on course for yet another ‘’Open Gap’’ with the March Contract trading 20 Handles higher at 3764. The S&P has resistance from 3778/3793 where I will be a small seller with a 3805 ‘’Closing Stop’’. Frustratingly, the S&P just missed my 3678 buy level with a 3686 morning low. I will now raise my buy level to 3705/3722 with a 3693 stop. If I am taken short I will have a T/P level at 3766. If I am taken long I will have a T/P level at 3734.
EUR/USD
No Change. I am still a seller from 1.2365/1.2405 with the same 1.2445 stop. I will continue to be an aggressive buyer on any dip lower to 1.2150/1.2200 with a higher 1.2105 stop.
March Dollar Index
I am still long at an average rate of 89.55 with the same 88.75 stop. In my opinion sentiment is still compatible with an impending low in the Dollar. Often, currency trends will end with a spike and intra-day reversal, which has yet to occur. I will leave my 89.95 T/P level unchanged for now.
March DAX
The DAX exploded higher after I posted yesterday morning and I am now short at an average rate of 13860. I will leave my stop unchanged at 14005 while raising my T/P level on this position to 13820.
March FTSE
I had no luck with my calls yesterday. Shortly after I posted the FTSE made a low at 6594 before mounting a 300 point rally, to an overnight high at 6900. This move higher stopped me out of my 6620 short position at 6681 and I am still flat. I am left stunned by the extent of yesterday’s near 5% surge as I certainly did not see this on the horizon. I am going to stay flat today as I want to see how the market reacts to yesterday’s explosive move.
Dow Rolling Contract
Juts like the FTSE above the Dow also exploded to the upside having just missed my 30150 buy level. This morning the Dow is gapping higher to sit at 31000 as I go to press. The Dow has trendline resistance from 31390/31590 where I will be a small seller with a tight 31725 stop. I will now raise my buy level to 30350/30550 with a 30195 ‘’Closing Stop’’.
March NASDAQ
The NASDAQ missed my 12480 buy level by 10 points before rallying to an intra-day high of 12800. Subsequently we sold off into the close and I am still flat. I will now raise my buy level to 12480/12560 with a higher 12395 stop. I still do not want to be short the NASDAQ at this time.
March BUND
I am still flat. I will now raise my buy level to 176.30/176.80 with a higher 175.85 stop. I will also raise my sell level to 177.80/178.25 with a 178.55 stop.
Gold Rolling Contract
Gold fell shy of my 1960 sell level with a 1954 high to trade below 1900 and I am still flat. Gold has support from 1870/1885 where I will be an aggressive buyer with an 1859 stop.
Silver Rolling Contract
My Silver plan worked well with the market trading lower to my 26.70 buy level before rallying to my 27.15 T/P level and I am now flat. Today, I will again be a buyer from 26.00/26.60 with a 25.65 tight stop. If I am taken long I will have a T/P level at 26.95.
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