U.S. Equity Markets slumped on concern that the Coronavirus that originated in China will take a heavy toll on corporate earnings. The US Dollar rallied while Gold climbed to a seven-year high as investors sought havens. Microsoft Corp., Apple Inc. and other big tech names led losses after Japan reported two deaths and South Korea confirmed its first fatality from the disease amid a report the illness was spreading in Beijing. ViacomCBS Inc. tumbled after sales missed estimates, while Morgan Stanley dropped after agreeing to buy E*Trade Financial Corp. for $13 billion. The S&P 500 Index pared the worst of its decline in the afternoon amid gains for automakers and real-estate companies. The Japanese Yen extended its fall toward 112 per dollar amid disappointing economic news and early positioning before the fiscal year-end next month. Treasuries rallied. Sentiment turned negative yesterday afternoon, a day after equities reached record highs, as the infection that originated in China continues to expand beyond the mainland. Earnings misses are adding to the gloom, alongside fresh warnings on the pathogen’s impact from A.P. Moller-Maersk A/S, the world’s largest container shipping firm, and Air France-KLM. Goldman Sachs Group Inc.’s chief equity strategist said a near-term correction for the stock market is looking more probable. Elsewhere, subpar results from AXA SA and Telefonica SA weighed on European equity gauges. Asia stocks traded mixed. Oil gained in New York.
To mark my 2000th 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 100 points yesterday and is now ahead by 780 points for February, having made 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
I have a YouTube Channel which contains recent interviews I have given. This can be viewed by clicking HERE Please subscribe to this for new interview notification
Equities
The S&P 500 Index fell 0.4%, closing at 3373. However, this was well off it’s intra-day low at 3340.
The Dow Jones closed 128 points lower at 29,220.
The NASDAQ fell 1% from Wednesday’s record close.
The Stoxx Europe 600 Index fell 0.9%.
MSCI Asia Pacific Index sank 0.7%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index jumped 0.5%.
The Euro slipped 0.2% to $1.0787.
The Japanese Yen weakened 0.6% to 112.08 per dollar.
Bonds
The yield on 10-year Treasuries sank five basis points to 1.52%.
Germany’s 10-year yield declined three basis points to -0.45%.
Britain’s 10-year yield dipped two basis points to 0.57%.
Commodities
West Texas Intermediate crude gained 0.9% to $53.78 a barrel.
Gold strengthened 0.5% to $1,619.80 an ounce.
This morning on the Economic Front we have German, Euro-Zone and UK Markit Manufacturing PMI at 8.30 am, 9.00 am and 9.30 am respectively. This is followed at 10.00 am by Euro-Zone CPI. At 2.45 pm we have U.S. Markit Manufacturing PMI. Finally, at 3.00 pm we have Existing Home Sales.
This afternoon the Fed’s Brainard, Mester and Clarida speak at 3.15 pm, 6.30 pm and 6.45 pm respectively.
Over the weekend the Group of 20 Finance Ministers and Central Bank Chiefs are due to meet in Riyadh, Saudi Arabia, and are expected to discuss efforts to support growth amid the Coronavirus threat.
March S&P 500
Yesterday was a wild ride for the S&P with the market falling 50 Handles to an intra-day low at 3339.25 before buyers returned, with a late two-hour rally into the close. It is almost impossible to have a physical stop in the market because as soon as you are stopped out of a trade you know we are going to see the buy the dip hit the market. To overcome this problem you are better having a mental stop and trade in smaller size. Yesterday after the S&P hit my 3368 average buy level I was stopped out at 3355. Subsequently the S&P made its 3339.25 low before rallying to close at 3373. The VIX exploded over 16% at one stage to 17 before closing 8% higher at 15.56. Incredibly the McClellan Oscillator closed in positive territory with a +8 print. The S&P has strong support from 3325/3338 and I will be a buyer in this area with a 3317 stop. If I am taken long and subsequently stopped out of this position I will be an aggressive buyer from 3290/3305 with a 3278 stop.
EUR/USD
Despite the US Dollar rallying hard against most currencies yesterday, the Euro traded in a narrow range and I am still flat. Today I will leave my 1.0715/10755 buy range unchanged with the same 1.0680 stop. Ahead of the weekend I no longer want to be short the market as I want to see this evening’s sentiment reading for both the Euro and Dollar Index.
March Dollar Index
The Dollar closed at its highest level in 34 months after rising for 11 of the past 14 trading sessions. Although the Euro is the biggest part of the Dollar Index at 57%, the Japanese Yen is the second biggest with a weight of 13.6%. Yesterday the Yen got hit hard following news that the economy is sliding into recession. This move so my latest 99.25 short position stopped out at 99.65 and I am now flat. As I have no edge in the Dollar at this time I am going to stay flat over the weekend and take another look on Monday.
March DAX
Thankfully we had no buy level in the DAX yesterday with the market trading 220 points lower from where I marked prices 24 hours ago. I will now lower my sell level to 13710/13780 with a 13840 stop. The DAX has initial support from 13420/13490 and I will be a buyer on any further dip to this area with a 13375 stop.
March FTSE
This morning the FTSE has traded lower to my 7350 buy level. I am still long and I will now lower my T/P level on this position to 7380. Given how weak Sterling is I will look to add to this trade at 7310 with a 7270 stop. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Dow Rolling Contract
When the Dow hit an afternoon low at 28945 this was almost 500 points off its early Thursday morning high at 29440. Subsequently the Dow rallied hard into its 29220 closing print. However overnight more nervousness in Asia had led to a further sell-off in the Dow with the market sitting at 29000 as I go to press. Yesterday’s Dow plan worked well with the market hitting my 29050 buy level before rallying to my 29120 revised T/P level and I am now flat. The 50 Day Moving Average comes in at 28781 and I would expect any test of this level to be followed by a nice move higher, before eventually this key technical level gets broken. Today I will be a buyer from 28750/28880 with a 28670 stop.
March NASDAQ
The NASDAQ has got hit hard, trading 200 points lower from where I marked prices 24 hours ago. We have strong support from 9420/9480 and I will be a buyer on any dip to this area with a 9375 stop.
March BUND
This morning the Bund has rallied into my sell level and I have gone short in small size here at 175.30. I will add to this position at 175.70 with a now higher 176.05 stop. I will also raise my T/P level on this position to 175.00. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold has exploded to a seven-year high after Goldman Sachs came out with a report that if the Coronavirus worsens we could see Gold hit $1850. This morning the market is trading at 1634 as I go to press. We are above the top of the Daily Bollinger Band and at the top of the Williams Index. I am still flat and I will now tighten my sell range to 1645/1658 with a higher 1668 stop. If I am taken short I will have a T/P level at 1633.
Silver Rolling Contract
I am still flat Silver which again just missed my buy level. Today I will raise my buy level to 17.80/18.20 with a higher 17.45 stop.
Recent Comments