In a week that brought the wildest market swings since the financial crisis, yesterday hammered investors with something crazier — a 10% drop in the Dow, the end of the longest bull market on record and the biggest sell-off since 1987’s Black Monday. At the end of the day, the S&P 500 smoldered 27% below records set barely three weeks ago and wiped out all its gains since the end of 2018. The news was even worse overseas: Europe’s Benchmark Index suffered its worst day in history. Brazil’s Ibovespa tumbled as much as 20%, extending this year’s loss to almost 50% in dollar terms. Canada’s main gauge was off more than 12%, its worst day since 1940. President Donald Trump finally offered some attempt at fiscal stimulus, but the measures fell flat. The European Central Bank took a stab by easing capital constraints and boosting liquidity, and losses only deepened. Not even an unprecedented plan for $5 trillion in bond-buying from the Federal Reserve could mollify investors rattled by the growing likelihood that the Coronavirus will plunge the global economy into recession. Ten-year Treasury yields erased declines and inched higher as policy makers’ liquidity pledge recalled the Quantitative Easing used during the financial crisis. Oil and precious metals fell, with Palladium sinking more than 20%. Thursday marked the greatest manifestation yet of how the one-two punch of the Coronavirus and an oil-price war are destroying global growth prospects and fuelling jitters around the world. Now investors are trying to guess at the effectiveness of policy makers’ efforts to limit economic damage, with Trump’s travel ban and tepid fiscal measures failing to impress most observers. Spirits were further damped by new bans on public gatherings in the U.S. and professional Sports Leagues’ move to suspend operations.
To mark my 2025th 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 595 points yesterday and is now ahead by 2477 points for March, having made 2223 points in February, 2142 points in January, 818 points in December, 780 points in November, 1649 points in October, 1620 points in September and 2387 points in August 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
More bad news about the impact of the Coronavirus emerged throughout the day. The leading U.S. infectious-disease official said the testing system in the country is “a failing.” The European Union warned the sickness threatens to exceed health-care capacity across the region “in a few weeks or even days.” The National Hockey League followed the National Basketball Association’s lead and suspended its season, while Major League Baseball said opening day would be delayed. Meanwhile, signs that companies in the hardest-hit industries were drawing down credit lines to battle the effects of the virus on their businesses added to anxiety.
The S&P 500 Index declined 9.5% for a loss of 260 Handles at 2480.
The Dow Jones Industrial Average lost 10%, for a loss of 2,352 points at 21,200.
The Stoxx Europe 600 Index fell 11%.
The MSCI Asia Pacific Index dipped 5.4%.
The MSCI Emerging Market Index sank 6.6%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index gained 1.1%.
The Euro weakened 0.6% $1.1204.
The Japanese Yen fell 0.5% to 105.1 per dollar.
Bonds
The yield on 10-year Treasuries rose one basis point to 0.88%.
Germany’s 10-year yield fell one basis point to -0.75%.
Britain’s 10-year yield declined three basis points to 0.26%.
Commodities
West Texas Intermediate crude declined 5.8% to $31.07 a barrel.
Gold weakened 4% to $1,569.79 an ounce.
This morning on the Economic Front we already had the release of German CPI which came in as expected at 1.7%. Germany also released the Wholesale Price Index which printed -0.9% versus +1% expected. At 12.00 pm we have the Bank of England Minutes and this is followed at 12.30 pm by the U.S Import/Export Price Index. Finally, at 2.00 pm we have the University of Michigan Consumer Sentiment.
March S&P 500
While watching President Trump’s useless address to the Nation on Wednesday evening I had to change yesterday’s Daily Commentary four times and this still was not enough as my calls were totally wrong which was no surprise given the fact that both the Dow and S&P closed an incredible 10% lower on the day. After the S&P traded the whole of my buy range for a 2615 average long position I was stopped out of this trade at 2555. Subsequently I emailed my Platinum Members to buy the S&P again at 2510 before the market rallied to my 2542 T/P level and I am now flat. In an incredible trading session the VIX closed 88% higher at 75.47 while the Fear & Greed Index closed at a new all-time low at 1. Meanwhile the McClellan Oscillator also closed at new low with a print of -421. The 9-week RSI has fallen below 30 for the most oversold reading since 2008. It is no surprise that after the carnage of yesterday that the S&P is trading 100 Handles higher as I go to press. The S&P has strong resistance from 2680/2720 where I will be a seller with a 2755 stop. The S&P has initial support from 2390/2440 where I will be a buyer with a 2365 stop. The low in December 2018 comes in at 2346 which may be tested and if this low does not hold then we are looking at long-term support from 2100/2200. If I am taken short I will have a T/P level at 2640. If I am taken long I will have a T/P level at 2482.
EUR/USD
I had the correct view in looking for a weaker Euro buy unfortunately the market just missed my sell level on Wednesday a 1.1370 before trading with a 1.10 Handle yesterday. The Euro has resistance from 1.1240/1.1290 where I will be a seller with a 1.1340 stop.
March Dollar Index
I am still flat the Dollar and today I will raise my buy level to 96.20/96.80 with a 95.80 stop.
March DAX
After the DAX traded the whole of my buy range for a 9725 average long position I was stopped out of this trade at 9555 and I am still flat. Incredibley the DAX hit a low at 8850 which is nearly 5000 points lower than the high made in early February. This morning the DAX is rallying, trading at 9400 as I go to press. Today I will be a small buyer from 8900/9050 with an 8795 tight stop. If I am taken long I will have a T/P level at 9205.
March FTSE
Despite the weaker Pound the FTSE has lost over a third of its value in five weeks. Overnight we traded to a new low at 5205 before bouncing 300 points. The FTSE has support from 5150/5280 where I will be a buyer with a 5070 stop. If I am taken long I will have a T/P level at 5365.
Dow Rolling Contract
The only good part about yesterday was the fact the Dow was locked limit down and when the markets re-opened in the US after the 15 minute halt, the Dow opened below yesterday’s buy range and stop and I am still flat. This morning the Dow has rallied over 900 points from last night’s close before again selling off as I go to press. The Dow has strong support from 20500/20800 where I will be a buyer with a 20250 stop. Resistance is way above the market at 24600/24850 where I will be a seller with a 25050 stop. There is every chance that the Dow can trade as low as 17550/19352 over the coming weeks where I will be an aggressive buyer. Today if I am taken long I will have a T/P level at 21225. If I am taken short which is unlikely I will have a T/P level at 23800.
March NASDAQ
After the NASDAQ hit my average buy level at 7660 I was quickly stopped out of this position at 7560 and I am now flat. Incredible the NASDAQ traded to an overnight low at 6943 before rallying to sit at 7475 as I go to press. The NASDAQ has strong resistance from 7700/7800 where I will be a seller with a 7920 stop. We have strong support from 6800/6950 where I will be a buyer with a 6690 stop. If I am taken short I will have a T/P level at 7550. If I am taken long I will have a T/P level at 7125.
June BUND
After the ECB left rates unchanged yesterday the Bund got hit hard and is trading 300 points lower from I marked prices 24 hours ago. I still do not have an edge in this market and I am going to stay flat until we see the market calm down.
Gold Rolling Contract
So much for Gold been a ‘’Safe Haven’’ with the market getting hit for $100. Thankfully we had no buy level in this market and are still flat as we have been frustrated in trying to get short earlier in the week. Gold traded to an overnight low at 1550 before bouncing to trade at 1580 as I go to press. I will be a small buyer from 1545/1555 with a 1537 stop.
Silver Rolling Contract
My Silver plan did not work well yesterday as after the market dropped to my 16.20 buy level I was stopped out of this trade at 15.75 and I am still flat. Silver has support from 15.00/15.40 where I will be a buyer with a 14.65 stop.
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