U.S. Equity Markets continued their post-election rally, finishing the day higher, led again by the NASDAQ which gained 2.58%, while S&P closed 1.94% higher. Weekly Jobless Claims were in line with last week but remained below 1 million for the tenth straight week. This points to a recovery in the job market, albeit a slow one. The Federal Reserve left Interest Rates unchanged but announced an increase in its Treasury purchases over the coming months. That should help keep Interest Rates low and support spending and growth. In addition, it said it remains ready to use its full range of tools to support the economy as necessary. Fed Chairman Jerome Powell echoed this in his post-policy meeting press conference, adding that the U.S. Economy’s recovery has moderated in recent weeks. He also expressed concern over rising case numbers in the U.S. and the impact they could have on growth. European Indices closed higher for the fourth Consecutive trading session. The British government is said to be telling doctors to prepare for a potential Coronavirus vaccine roll out before Christmas. The Bank of England increased its Quantitative Easing target by $196 billion, while leaving Interest Rates unchanged. British Chancellor of the Exchequer Rishi Sunak extended the U.K.’s programme to help furloughed workers until the end of March, as the country is going back under lockdown. Organisation of Petroleum Exporting Countries officials said Saudi Arabia and Russia are pushing members to delay production increases scheduled for January. Elsewhere, the Euro closed 1% higher versus the US Dollar, helping Gold to rally $40 for a 2.92% gain on Dollar weakness.
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Equities
The S&P 500 closed 1.94% higher at a price of 3510.
The Dow Jones Industrial Average closed 542 points higher for a 1.95% gain at a price of 28,390.
The NASDAQ 100 closed 2.58% higher at a price of 12,078.
The Stoxx Europe 600 Index closed 1.1% higher.
The MSCI Asia Pacific Index rose 0.9%.
Yesterday the Nikkei closed 1.73% higher at a price of 24,105.
Currencies
The Bloomberg Dollar Spot Index closed 0.9% lower.
The Euro closed 1.0% higher at $1.1831.
The British Pound closed 1.2% higher at $1.3145.
The Japanese Yen closed 0.8% higher at 103.52 per dollar.
Bonds
The yield on 10-year Treasuries closed one basis point lower at 0.77%.
Germany’s 10-year yield closed unchanged at -0.64%.
Britain’s 10-year yield closed two basis points higher at 0.23%.
Commodities
The Bloomberg Commodity Index closed 1.2% higher.
West Texas Intermediate closed 1.69% lower at $38.52 a barrel.
Gold closed 2.92% higher at $1943 an ounce.
This morning on the Economic Front we have German Industrial Production at 7.00 am and this is followed at 9.30 am by the UK Halifax House Price Index. At 1.30 pm we have the U.S Non-Farm Payrolls including the Unemployment Rate and Average Earnings. Finally, we have Wholesale Inventories at 3.00 pm.
December S&P 500
My S&P plan worked well with the S&P trading the whole of my sell range for a 3500 average short position before trading to an afternoon low at 3485. This move lower enabled me to cover this position at my revised 3494 T/P level and I am still flat. Yesterday’s aggressive move higher has the S&P trading 300 Handles above Last Thursday’s 3219 low print. The S&P left another large ‘’Open Gap’’ from Wednesday’s Chicago close at 3440 to yesterday afternoon’s 3480 low print. This week’s huge rally has left a number of ‘’Gaps’’ and the market is now overbought again. The S&P has strong resistance from 3535/3551 where I will be a seller with a 3465 ‘’Closing Stop.’’ My only interest in buying the market is on a dip lower to 3445/3462 with a 3429 stop. If I am taken short I will have a T/P level at 3522. If I am taken long I will have a T/P level at 3475.
EUR/USD
Thankfully, we had no sell level in the Euro yesterday with the market rallying 1% to sit at 1.1830 as I go to press. I will now raise my buy level to 1.1740/1.1785 with a higher 1.1695 stop. I still do not want to be short the Euro at this time.
December Dollar Index
My latest 93.40 long Dollar position did not work well as I was stopped out of this trade at 92.85 and I am still flat. The Dollar has support from 91.50/92.10 where I will be a buyer with a 91.15 tight stop.
December DAX
Just like the US Indices, the rally in the DAX has been spectacular, with the market trading 1200 points higher from where we were last week. I have called this move higher correctly but unfortunately I have not been able to get long over the past few days and I am still flat. The DAX is overbought again and has resistance from 12750/12850 where I will be a seller with a 12925 tight stop. If I am taken short I will have a T/P level at 12685.
December FTSE
The FTSE has rallied but the strength in Sterling is preventing it from having the same move higher as the other European Indices. I am still flat. The FTSE has resistance from 5910/5960 where I will be a small seller with a 6005 tight stop.
Dow Rolling Contract
My Dow plan worked well but you had to be quick. After the Dow traded higher to my 28280 sell level we saw a quick move lower to 28085, and this move lower enabled me to cover this position at my 28130 T/P level. The Dow made an intra-day high of 28495, which is 2400 points higher than where we were trading last week. The Dow has further resistance from 28700/28900 where I will be a seller with a 29105 stop. My only interest in buying the Dow is from 27850/28050 with a 27695 stop.
December NASDAQ
Frustratingly, the NASDAQ just missed my 11760 T/P level before rallying to close at 12075. This move higher saw my 11905 stop triggered on my 11815 short position and I am now flat. The NASDAQ has been the strongest market all week and is within touching distance of all-time highs. The NASDAQ has support from 11650/11785 where I will be a buyer with a 11525 stop. Ahead of the weekend I do not want to be short the market at this time.
December BUND
No Change as I am still a seller from 176.70/177.20 with the same 177.71 stop. If I am taken short I will have a T/P level at 176.35.
Gold Rolling Contract
The renewed weakness in the Dollar was the catalyst for the huge 3% rally in Gold yesterday as thankfully we were not short. I will now raise my buy level to 1900/1912 with an 1889 stop.
Silver Rolling Contract
I am still flat and today I will raise my buy level to 24.20/24.70 with a higher 23.75 stop. If I am taken long I will have a T/P level at 25.15.
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