U.S. Equity Markets ended the week on a positive note, finishing the week higher, with the $&P 500 + 1.60%, the Dow +1.34% and the NASDAQ +2.34% after a volatile trading session. Markets opened lower before rallying throughout the day. There were no clear-cut catalysts. Stimulus headlines were back in the news after House Democrats were said to be preparing to vote on a scaled-down stimulus package worth between $2.2 trillion and $2.4 trillion as soon as this week. But there are still concerns that there will still be no agreement. Economic data were mixed, as Durable Goods Orders fell short of estimates, while core capital goods beat expectations. Vaccine developments were positive, with Novavax (NVAX) announcing that it launched a 10,000-person Phase 3 trial of its Coronavirus vaccine candidate in Britain. Meanwhile, European Indices fell on growing Coronavirus fears. French Prime Minister Jean Castex suggested the country could return to lockdowns once more if individuals did not do a better job observing Coronavirus social-distancing measures. The City of Madrid extended Coronavirus restrictions to eight more districts as a result of rising case numbers. Italian Business and Consumer Confidence rose in August to the highest level since the pandemic hit, signalling optimism about the economic rebound. British Chancellor of the Exchequer Rishi Sunak unveiled a slimmed-down job protection scheme, which aims to prevent a wave of unemployment. Elsewhere, Oil closed 0.62% lower after the head of commodity-trading firm Mercuria said demand was still weaker than previously expected. The Dollar closed higher for the seventh day out of the last nine while the Euro closed at a two-month low.
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For anyone following my Platinum Service it made 375 points on Friday and is now ahead by 2672 points for September, having made 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 1.6% higher at a price of 3299.
The Dow Jones Industrial Average closed 358 points higher for a 1.34% gain at a price of 27,173.
The NASDAQ 100 closed 2.34% higher at a price of 11,151.
The Stoxx Europe 600 Index closed 1.2% lower.
The MSCI Asia Pacific Index rose 0.5%%.
This morning the Nikkei closed 1.32% higher at 23,511
Currencies
The Bloomberg Dollar Spot Index closed 0.3% higher.
The Euro closed 0.4% lower at $1.1622.
The British Pound closed unchanged at $1.2745.
The Japanese Yen closed 0.2% lower at 105.54 per dollar.
Bonds
The yield on 10-year Treasuries closed two basis points lower at 0.65%.
Germany’s 10-year yield closed two basis points lower at -0.52%.
Britain’s 10-year yield closed two basis points lower at 0.20%.
Commodities
The Bloomberg Commodity Index fell 0.5%.
West Texas Intermediate closed 0.6% lower at $39.85 a barrel.
Gold closed 0.5% lower at $1856 an ounce.
This morning on the Economic Front we have no data of note from either the UK or the Euro-Zone, while the only U.S release is the Dallas Fed Manufacturing Business Index at 3.30 pm. Remember, we do have the Non-Farm Payrolls this coming Friday.
December S&P 500
Yet another trading session when the ‘’buy the dip’’ paid a nice dividend with the S&P hitting a morning low at 3206, before surging almost 90 Handles from this price level into the close. My S&P plan worked well with the market hitting my 3220 buy level before rallying to my revised 3230 T/P level as seven of my Friday calls got hit within one hour of each other. Friday’s rally saw the McClellan Oscillator improve from Thursday’s -209 print, to end the week at -104 as thankfully we had no sell levels in any of the Indices as yet again anyone shorting the market got slammed. It is still premature to turn bearish on US Indices as the Fed will continue to support the market especially with only six weeks to go to the Presidential Elections. There is a worry that a disputed election will rock the markets but, in my opinion, this is overstated. Wednesday’s aggressive sell-off my have been started after Interactive Brokers said they were raising margin requirements ahead of the election, to protect itself and clients against a potential increase in volatility over the election. However, the US system is designed to force a result within weeks of the election. If President Trump loses, he will not able to cling onto office. The 50-Day MA for the S&P comes in at 3339 and we need to break this level for a more sustained rally to gain further momentum. I will be a seller from 3322/3335 with a 3351 stop. Short-term, we have support from 3270/3285 where I will be a buyer with a 3259 stop.
EUR/USD
Late Friday, the Euro traded lower to my 1.1615 buy level. I am still long with a now lower 1.1655 T/P level. I will add to this trade at 1.1570 with the same 1.1535 stop. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December Dollar Index
The Dollar has now closed higher for seven of the past nine trading sessions and is short-term overbought. The Dollar has resistance from 95.10/95.50 where I will be a seller with a 95.85 stop. I will not chase the market higher and I will continue to be a buyer from 93.60/94.00 with the same 93.25 stop.
December DAX
After the DAX traded the whole of my buy range for a 12445 average long position we came close to my 12319 stop with a 12321 stop. Subsequently the market rallied and I cut this long position for a small loss at 12435 and I am still flat. This morning the DAX is opening higher at 12610. Even though the Coronavirus cases are increasing at a worrying rate in Europe, I still would not sell the DAX as German Government will step in with more Stimulus as necessary. The DAX has support from 10370/10470 where I will be a buyer with a 10295 stop.
December FTSE
My FTSE plan worked well with the market trading lower to my 5770 buy level before rallying to my 5805 T/P level and I am still flat. The FTSE is oversold and today I will be a buyer from 5775/5825 with a 5735 stop.
Dow Rolling Contract
The Dow got hit hard shortly after I posted on Friday morning, trading the whole of my buy range for a 26670 average long position. The Dow made an intra-day low at 26550 before surging over 650 points into the close as yet again anyone shorting this market for any length of time gets slammed. This move higher enabled me to cover this position at my too tight 26750 T/P level and I am still flat. The Dow has near-term resistance at its 50 Day MA which comes in this morning at a price of 27527. As a result, I will now be a seller from 27470/27650 with a 27785 stop. The Dow has support from 26850/27050 where I will be a buyer with a 26675 stop.
December NASDAQ
Friday’s 2.34% rally in the NASDAQ sees the market very close to testing is 50 Day MA (11225). Shortly after I posted the NASDAQ traded lower to my 10850 buy level before rallying to my too tight and revised T/P level at 10910 and I am now flat. Subsequently the NASDAQ spent the rest of the day trading higher. I will be a small seller from 11250/11350 with a tight 11425 stop. We have near-term support from 10970/11070 where I will be a buyer with a 10895 stop.
December BUND
Even though Equity Markets rallied on Friday, the Bund also closed higher. As I have said consistently since March, Central Banks will not allow Bond Yields to rally as they need to keep Interest Rates low/negative so Governments can fund their massive debt cheaply. I am still flat the Bund and today my buy level will be from 173.55/174.05 with a 173.15 tight stop.
Gold Rolling Contract
My Gold plan worked well with the market trading lower to my 1850 buy level before rallying to my 1858 T/P level and I am still flat. Gold has now fallen from the August 7 High of 2072 to last Friday’s 1847 low. Gold is oversold and due a bounce. Today I will be a buyer from 1833/1845 with a 1821 stop.
Silver Rolling Contract
After Silver hit my 22.50 buy level we rallied to my 22.80 revised T/P level and I am now flat. Silver is even more oversold than Gold, having fallen over 25% in the last few weeks. Today I will be an aggressive buyer from 21.80/22.50 with a wider 21.25 stop. If I am taken long I will have a T/P level at 23.25.
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