U.S. Equity markets bounced around once again near all-time highs, closing the day mixed as we wait for the Employment data at 1.30 pm. Economic data were positive. Jobless Claims fell, beating estimates. This marked the first decline in three weeks. Continuing Claims, which represent those who have filed for Unemployment for at least two weeks, were 5.52 million, below the expectation for 5.8 million and a revised 6.1 million in the week prior. ISM Non-Manufacturing data also beat estimates, highlighting continued strength in the U.S. services sector. Stimulus negotiations also began to heat up again. Senate Majority Leader Mitch McConnell said progress was being made after talks started up again. This echoed comments from other Senators earlier in the day. Meanwhile, European Indices also closed mixed. The German government and the heads of its 16 states were said to be planning an extension of COVID-19-related social-distancing restrictions until January 10. Markit Euro-Zone’s final composite Purchasing Managers’ Index (“PMI”) data for November increased versus the preliminary reading, indicating the economy is faring better than feared. Euro-Zone Retail Sales came in well above expectations in October, highlighting consumer strength in the region. In the U.K., the government has ranked those most at risk into a nine-tier system for receiving the vaccine, according to the Wall Street Journal. The top two tiers consist of those in long-term care facilities, their care providers, people over 80, and frontline health workers. None of the nine tiers would see the general population receive the vaccine. The only way someone younger than 50 could receive the vaccine in the U.K. would be if they are a health care worker (Tier 1 or Tier 2) or have underlying health conditions (Tier 6). So, it will be a while before the general population receives the shot. That means the “work-from-home” trend still has room to run. Elsewhere, Oil closed 0.57% higher as the market gained along with other Risk Assets, while Gold rose 0.81% on Dollar weakness.
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For anyone following my Platinum Service it lost 90 points yesterday and is now ahead by 55 points for December, having finished November with a gain of 2025 points, 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, an incredible 9264 points in March, 2223 points in February and 2142 points in January. 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 0.06% lower at a price of 3666.
The Dow Jones Industrial Average closed 85 points higher for a 0.29% gain at a price of 29,969.
The NASDAQ 100 closed 0.09% higher at a price of 12,467.
The Stoxx Europe 600 Index closed 0.3% lower.
The MSCI Asia Pacific Index rose 0.3%.
This morning the Nikkei closed 0.22% lower at a price of 26,751.
Currencies
The Bloomberg Dollar Spot Index fell 0.3%.
The Euro closed 0.4% higher at $1.2142.
The British pound rose 0.8% to close at $1.3446.
The Japanese yen rose 0.4% to 103.91 per dollar.
Bonds
Germany’s 10-year yield fell four basis points to -0.56%.
Britain’s 10-year yield closed two basis points lower at 0.33%.
US 10 Year Treasury closed two three points lower at 0.92%.
Commodities
West Texas Intermediate crude increased 0.57% to $44.48 a barrel.
Gold closed 0.81% higher at $1,836.10 an ounce.
This morning on the Economic Front we already had the release of German Factory Orders which came in higher than expected with a gain of 2.9%. At 1.30 pm we have U.S Non-Farm Payrolls including the Unemployment Rate and Average Earnings. The Trade Balance will be released at the same time, Finally, at 3.00 pm we have Factory Orders.
December S&P 500
The S&P traded in a narrow range near all-time highs as we wait for the NFP data at 1.30 pm. Optimism remains at extreme levels driven by both more Stimulus expectations and a vaccine that will soon be approved by the FDA and rolled out in January. On top of this we have the December Seasonal factor. Generally, December is a positive month with only the years 2000 and 2018 seeing sizeable downside. In my opinion most of the above good news is now priced into the market after a vertical move higher in many stocks since the end of October. Everything is now crowded in one direction, including the explosion higher in Bitcoin and of course Dollar Shorts which no one is really talking about. The one stock that stands out is Telsa which is due to join the S&P this month. This stock has jumped 10 times in 2020 and has nothing to do with fundamentals. On top of this we have seen most ‘’Open Gaps’’ in recent memory with close to double digit alone since the beginning of November, which is not healthy. Internally the market continues to weaken which is a warning sign for me. I am still flat the S&P and today I will continue to be a seller on any further rally to 3693/3710 with the same 3721 stop. It is difficult to try and go short on a Friday as the last six Monday sessions have started with a large ‘’Open Gap’’. However, given all of the above this move is not sustainable in my opinion without at least having some sort of correction. I am not going to chase the S&P higher and I will leave my 3631/3647 buy level unchanged with the same 3619 stop. My second buy level from 3590/3610 will still stand with the same 3573 ‘’Closing Stop’’.
EUR/USD
My Euro plan worked well with the market trading higher to my 1.2170 sell level before trading lower to my 1.2135 T/P level and I am now flat. Given how overbought the Euro is trading I will again be a seller from 1.2185/1.2235 with a 1.2271 stop. If I am taken short I will have a T/P level at 1.2150.
December Dollar Index
My 91.35 long position was stopped out at the close at 90.85 and I am still flat. The Dollar is severely oversold and due a bounce. The next support level for the Dollar is from 89.80/90.30 where I will be an aggressive buyer with a 89.45 stop.
December DAX
The surge in the Euro is weighing on the DAX. The ECB will not be happy with the strength of the Euro and it is only a matter of time before they try and talk the Euro lower. I am still flat the DAX and today I will lower my sell level to 13360/13440 with a lower 13505 stop.
December FTSE
As the UK looks to roll-out its vaccine next week the FTSE rallied strongly yesterday, stopping me out of my 6400 short -position at 6475. Subsequently I went short the market again at 6477. I will add to this trade at 6537. I will have a T/P level at 6440 while my stop will be a 6581.
Dow Rolling Contract
The Dow again missed my buy level by 50 points before rallying over 250 points and I am still flat. Ahead of the NFP data I will raise my buy level to 29600/29800 with a higher 29445 stop. I still do not want to be short the Dow at this time.
December NASDAQ
I am still flat as the market trades above 12500 this morning. We have resistance from 12570/12650 where I will be a small seller with a 12735 stop. I am not going to chase the NASDAQ higher and I will continue to be a buyer on any dip lower to 12310/12390 with the same 12195 wide stop.
December BUND
The BUND traded higher to my sell range yesterday and I am now short in small size at 175.03. I will add to this trade at 175.43 with the same 175.71 stop. I will now raise my T/P level on this position to 174.70.
Gold Rolling Contract
Gold has now risen over $80 off last week’s low and I am still flat. Obviously, the weak Dollar is helping to drive Gold higher. Today my buy level will be from 1780/1795 with a higher 1769 stop.
Silver Rolling Contract
Silver just missed my 23.50 buy level with a 23.57 low print before rallying to trade at 24.10 this morning. Today, I will raise my buy level to 23.10/23.70 with a higher 22.65 stop.
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