Boris Johnson won an emphatic election victory that redraws the political map of Britain and gives the Prime Minister the mandate he needs to pull the U.K. out of the European Union next month. The result spectacularly vindicated Johnson’s gamble on a snap election to break the deadlock in Parliament over Brexit, as his Conservatives looked set for their biggest majority since 1987 under Margaret Thatcher. The pound rose by the most in almost three years as the scale of the Tory victory became clear. The leader of the main opposition Labour Party, Jeremy Corbyn, announced his intention to resign after a catastrophic run of losses to the Tories in Brexit-supporting districts in northern England and Wales. These areas were considered traditional Labour strongholds and Johnson’s success here was the breakthrough that secured his victory. Elsewhere, Liberal Democrat leader Jo Swinson, who campaigned to remain in the EU, lost her seat. Having routed political opposition to Brexit across much of the country, Johnson still faces resistance in Scotland, where support for the pro-independence Scottish National Party surged, setting up the prospect of a renewed constitutional standoff over the U.K.’s future. Global stocks hit a record high for the first time since early 2018 and bond yields climbed after news that President Donald Trump signed off on a trade deal with China averting tariffs set for Sunday. The Pound surged the most in almost three years in the wake of exit polls showing a solid majority for U.K. Prime Minister Boris Johnson, offering greater clarity for Brexit. China’s yuan punched through 7 per dollar in offshore trading. Ten-year Treasury yields jumped the most in three months, and the Japanese Yen retreated. Futures on the S&P 500 Index saw modest gains as trading started in Asia. The yen slid.
To mark my 1950th 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 60 points yesterday and is now ahead by 597 points for December, having made 780 points in November, 1649 points in October, 1620 points in September, 2387 points in August, 1153 points in July, 1346 points in June,1722 points in May, 955 points in April and 1027 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
An announcement on the U.S.-China trade agreement is expected Friday Washington time, according to people familiar with the plans. The clock has been ticking on a tariff hike scheduled for Sunday on a swathe of Chinese imports, a key risk for financial markets that had been anticipating a deal. Thursday’s gain in American stocks pushed the MSCI All-Country global benchmark of shares to a record high.
Nikkei Futures rose 1.2%.
Hang Seng Futures rose 0.7%.
S&P/ASX 200 climbed 0.5%.
Futures on the S&P 500 Index were up 0.4% after the gauge rose 0.9% Thursday, closing a new all-time high of 3168.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Euro rose 0.5% to $1.1186.
The British Pound rose 2.3% to $1.3460.
The Japanese Yen fell 0.2% to 109.53 per dollar.
The offshore Yuan rose 0.3% to 6.9277 per dollar.
Bonds
The yield on 10-year Treasuries rose 10 basis points to 1.89% Thursday.
Australia’s 10-year yield soared 14 basis points to 1.27%.
Commodities
West Texas Intermediate crude climbed 0.5% to $59.45 a barrel.
Gold fell 0.3% to $1,465.51 an ounce.
This morning on the Economic Front we already had the release of the German Wholesale Price Index which came in as expected with a fall of 0.1%. At 9.30 am we have UK Consumer Inflation and this is followed at 1.30 pm by U.S. Retail Sales and Import/Export Price Index. This is followed at 3.00 pm by Business Inventories. Finally, we have speeches from the Fed’s Williams at 4.00 pm and the ECB’s De Guindos at 5.00 pm.
December S&P 500
I have mentioned so may times about a melt-up in the US Stock Markets especially after the High Volume Price moved up last Monday. Frustratingly all of my five Indices that I cover all missed my buy level by fractions before surging yesterday with the S&P now trading 50 Handles higher from where I marked prices yesterday morning. The S&P at 3180 is getting near my ultimate target of 3300/3350 where I am expecting a decent correction in the market. Hopefully some of you managed to buy in front of my Indices or are still long stocks based on my change of direction in last Monday’s commentary. This morning the S&P is overbought and trading above the top of its Daily Bollinger Band and at the top of the Williams Index. The S&P has resistance from 3195/3205 and I will be a small seller in this area with a 3212 stop. Yesterday the S&P which hit an early afternoon high of 3175 before falling to 3150. Subsequently the market surged in the last 30 minutes of trading. I will now move my buy level higher to 3148/3162 with a 3139 stop.
EUR/USD
My Euro plan worked well with the market trading lower to my 1.1110 buy level before rallying to my 1.1145 T/P level and I am now flat. Today I will again look to buy the Euro on any dip lower to 1.1080/1.1120 with a 1.1040 stop.
December Dollar Index
My Dollar plan also worked well with the Dollar trading higher to my 97.45 sell level before falling to my 97.20 T/P level and I am now flat. Today I will again look to sell the Dollar from 97.30/97.65 with a 97.95 stop.
December DAX
Thankfully we had no sell level in the DAX yesterday with the market just missing my 13090 buy level by 10 points before rallying to trade above 13400 this morning as the 13200/13250 resistance area was finally broken. This aggressive move higher sees the DAX severely overbought with resistance now at the 13480/13560 area where I will be a seller with a 13615 tight stop. I will now raise my buy level to 13180/13260 with a higher 13125 stop.
December FTSE
The FTSE surged on the Conservatives winning 364 seats against Labour’s miserable 202. I am still flat. With the Pound at three-year highs I would expect the FTSE to have trouble in moving much higher from here. Today I will be a seller from 7395/7445 with a 7485 tight stop.
Dow Rolling Contract
The Dow surged over 400 points off yesterday afternoon’s 27847 low print as yet again anyone trying to sell this market has got crushed. I am cautious about this latest gain as the VIX only closed 7% lower at 13.98 which is a worry when you have new all-time highs in the three main US Indices. The Dow is getting closer and closer to my 28400/28520 sell area. Today I will be a seller here with a tight 28630 stop. Given how overbought the market is trading I no longer want to be a buyer of the Dow at this time.
December NASDAQ
The NASDAQ came closest to my 8375 buy level yesterday with a 8377 low print before rallying to trade at 8505 this morning. The next resistance area for the NASDAQ is from 8580/8630 where I will be a strong seller with a 8675 stop. I will also be a small buyer on any dip lower to 8380/8430 with a 8335 stop.
March BUND
The BUND has been slammed since I posted yesterday morning with the market ”gapping” lower this morning by opening below yesterday’s 171.15 stop. I am still flat the Bund as I did not buy the market yesterday as I was concentrating on the Stock and Currency markets instead. Today I am going to stay flat as I want to see how the market reacts to this 200 point fall from yesterday’s high.
Gold Rolling Contract
No Change as I am still a small buyer from 1445/1455 with the same 1438 stop.
Silver Rolling Contract
No Change as I am still a buyer on any dip lower to 16.30/16.70 with a higher 15.85 stop.
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