U.S. Equity Markets sank, Gold surged and Treasury Yields tumbled as investors took a defensive stance amid renewed concern about the economic impact of the Coronavirus as it spreads outside of China. Tech companies were particularly hard hit, sending the Nasdaq 100 down almost 2%. The S&P 500 Index posted its first weekly decline since January. The yield on 30-year Treasuries fell to a record low amid data showing U.S. business activity shrank for the first time since 2013 as the virus hit supply chains. Overnight, U.S. and European Equity Futures tumbled with Asian shares and Gold surged as the increase in the Coronavirus cases outside of China roiled risk assets. Seoul saw the brunt of losses, down more than 3.5%, with declines also in Hong Kong, Sydney and Shanghai. The slide in S&P 500 Index and Euro Stoxx 50 futures, which fell 2%, also reflected the caution from traders to news over the weekend that finance chiefs and central bankers from the world’s largest economies see downside risks to the global economy persisting. The Australian Dollar chalked up a fresh 11-year low and the offshore Yuan extended its recent slide. Crude oil tumbled more than 2%. Japan is shut for a holiday. Investor sentiment is being knocked as South Korea saw a surge in cases to 763 and Italy cancelled some public events after Coronavirus infections rose to 140. Treasury yields last week reached fresh lows and the recent retreat in global equities continues to show the defensive stance being adopted as new virus cases outside China lift anxiety levels.
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 made 188 points on Friday and is now ahead by 968 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
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Equities
The S&P 500 Index dropped 1.1%, closing at a price of 3337, leaving it down 1.3% for the week.
The Dow Jones Industrial Average fell 228 points to close at 28,992.
The Nasdaq 100 fell 1.9% Friday and 1.8% for the week.
The Stoxx Europe 600 Index fell 0.5%.
The MSCI Asia Pacific Index fell 0.5%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index fell 0.3%.
The Euro rose 0.6% to $1.0848.
The British Pound advanced 0.6% to $1.296.
The Japanese Yen strengthened 0.5% to 111.59 per dollar.
Bonds
The yield on 10-year Treasuries declined five basis points to 1.47%.
The yield on 30-year Treasuries fell five basis points to 1.91%
Germany’s 10-year yield rose one basis point to -0.43%.
Britain’s 10-year yield was little changed at 0.57%.
Commodities
West Texas Intermediate crude sank 0.8% to $53.34 a barrel.
Gold strengthened 1.5% to $1,644.38 an ounce.
This morning on the Economic Front we have the German IFO Survey at 9.00 am and this is followed at 9.30 am by UK BBA Mortgage Applications. At 1.30 pm we have the Chicago Fed National Activity Index, Finally, at 3.30 pm we have the Dallas Fed Manufacturing Business Index.
March S&P 500
The S&P has now fallen over 120 Handles since making a new high at 3396.75, early Thursday morning as the Coronavirus moves to Italy with tragic consequences as at least two people are known to have died. The S&P has left a large ‘’open Gap’’ from Thursday at 3373 while on Friday the market closed at 3337. With the S&P currently trading at 3276, I cannot see such a huge second Gap being left unfilled as we wait for the U.S. Markets to open this afternoon. On Friday after the S&P traded lower to my initial 3338 buy level we had a small rebound to 3349 which enabled me to cover this position at my revised 3343 T/P level. When the Futures Market re-opened last night we quickly traded to the bottom of my second buy range at 3290. I have bought the market here and I will add to this trade at 3270 with a now lower 3259 stop. The 50 Day Moving Average is at 3274 this morning and should lead to a decent recovery on a first test. I will lower my T/P level on this position to 3303 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
EUR/USD
With sentiment towards the Euro in single digits it is no surprise that we saw the first rally in the Euro in a number of days and I am still flat. Today I will raise my buy level to 1.0750/1.0790 with a higher 1.0715 stop.
March Dollar Index
I am still flat the Dollar having got stopped out of this position last Thursday near the high of the week at 99.65. The Dollar is severely overbought as a shown by a number of currencies that are trading at extreme levels versus the mighty Dollar. The Australian Dollar has been slammed, trading at 0.6570 which is a 11 year low. The Dollar Index has strong resistance from 99.70/100.10 and I will be a seller in this area with a 1.0045 stop.
March DAX
As you know the DAX only starts trading at 7.00 am on EUREX. When we opened this morning, the market was below Friday’s buy range and stop and I am still flat. The DAX has strong support from 13050/13120 and this area must hold or else there is every chance we will break the key 13000 level. Today I will be a buyer on any dip to this area with a 12980 stop.
March FTSE
Thankfully the FTSE traded higher to my 7380 T/P level on my latest 7350 long position and I am now flat. This morning the FTSE is trading much lower at 7240. We are now at the bottom of the Daily Bollinger Band and Williams Index. We have nearby support from 7110/7160 and I will be a buyer on any dip to this area with a 7065 wider stop.
Dow Rolling Contract
Just like the DAX above the Dow has also opened below Friday’s buy range and stop and I am still flat. As I go to press the Dow is trading at 28470 which well below its 50 Day Moving Average at 28802. With the Dow closing at 28992 on Friday I would expect a large portion of the Gap to be filled. The Dow has strong support from 28270/28420 and I will be a buyer in this area with a 28160 stop. Given how oversold the market is trading I do not want to be short the Dow at this time.
March NASDAQ
The NASDAQ has fallen 6% since Thursday’s high which is no surprise given its vertical run higher since the end of January. On Friday after the market traded lower to my 9480 buy level we had a small bounce to my revised 9508 T/P level and I am now flat. This morning the NASDAQ is trading over 200 points lower at 9250. The 50 Day MA only comes in at 9035. The Central Banks will have to try and talk the market higher today or else this sell-off can turn nasty. The NASDAQ has strong support from 8980/9050 and I will be an aggressive buyer on any dip to this area with a 8910 stop.
March BUND
The BUND traded lower to my 175.00 T/P level on my latest 175.30 short position and I am now flat. The Bund has resistance from 175.70/176.10 and I will be a seller on any further rally to this area with a 176.45 stop.
Gold Rolling Contract
Gold is rapidly approaching a major high in my opinion. The Daily Sentiment Index closed at 93% bulls on Friday, while Large Speculators are net-long 353,649 Gold Futures Contracts on Comex which is a record net-long position. After Gold traded higher to my 1647 sell level late Friday I emailed my Platinum Members to exit any short position at 1642 as I wanted to be flat over the weekend. With the Coronavirus spreading to mainland Europe Gold is trading $30 higher at 1675 this morning. Gold has initial resistance from 1692/1710 and I will be a seller in this area with a 1722 wider stop. If I am taken short I will have a T/P level at 1678.
Silver Rolling Contract
Silver just missed my 18.20 buy level before trading higher and I am still flat. Silver is overbought and today I will only raise my buy level slightly to 18.00/18.40 with a higher 17.55 stop.
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