Equity Markets rallied around the globe and Treasuries fell as better-than-expected data bolstered confidence in the world’s largest economy. The S&P 500 Index extended its advance into a third day after reports showed payrolls jumped 266,000 — the most since January — as wages beat estimates while consumer sentiment increased. Energy, financial and industrial shares led gains in the equity gauge, which posted its biggest rally in five weeks. The US Dollar rose, and Treasury 10-year yields traded above 1.8%. Oil surged. Investors pushed up the value of risk assets on the assumption that the American economy is not close to signalling a recession — a fear that’s been lurking amid a trade war. While negotiators are near phase one of a broader accord and “progress has been made,” they haven’t yet put anything in writing, said White House economic adviser Larry Kudlow. Strong economic reports may reduce the urgency for a deal, given that escalating levies have failed to significantly dent growth. They also validate Federal Reserve Chairman Jerome Powell’s view that Interest Rates can stay on hold after three cuts. The European Repo market may have escaped the kind of turmoil that engulfed the U.S. financial system this year, but that doesn’t mean all is calm. The 8 trillion-euro ($9 trillion) market is becoming increasingly fragmented, according to the Bank for International Settlements. While this hasn’t caused harm yet, it raises the risk that cash may not flow through the system properly, BIS said in its Quarterly review. That’s what caused chaos in the U.S. almost three months ago. This is something to keep an eye on.
To mark my 1950th 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 13 points on Friday and is now ahead by 155 points for December, having made 780 points in November, 1649 points in October, 1620 points in September, 2387 points in August, 1153 points in July, 1346 points in June,1722 points in May, 955 points in April and 1027 points in March. 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
Stocks got whipsawed this week on conflicting signs of progress in trade negotiations between the world’s two largest economies. China said Friday it is in the process of waiving retaliatory tariffs on imports of U.S. pork and soy by domestic companies — a procedural step that may also signal a broader trade agreement is drawing closer. President Donald Trump has threatened to impose tariffs on Chinese imports if an accord isn’t reached by Dec. 15, which Kudlow said could still happen.
The S&P 500 climbed 0.9% to close at 3,145.91.
The Dow Jones Industrial Average rose 337 points to close at 28,015.
The Stoxx Europe 600 Index increased 1.2%.
The MSCI Asia Pacific Index rose 0.5%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index added 0.1%.
The Euro dipped 0.4% to $1.106.
The Japanese Yen appreciated 0.2% to 108.55 per dollar.
Bonds
The yield on 10-year Treasuries rose three basis points to 1.84%.
Germany’s 10-year yield climbed one basis point to -0.29%.
Britain’s 10-year yield fell less than one basis point to 0.772%.
Commodities
Oil climbed after Saudi Arabia surprised the market by promising significant additional production cuts beyond what was agreed with fellow OPEC+ members
The Bloomberg Commodity Index added 0.2%.
West Texas Intermediate crude climbed 1.3% to $59.20 a barrel.
Gold declined 1.2% to $1,465.10 an ounce.
This morning on the Economic Front we already had the release of the German Trade Balance which printed Euro 21.5 billion version 19.5 Euro expected. At 10.00 am we have the Euro Sentix Investor Confidence. We have no U.S Data due today as the market waits for the FOMC Rate decision on Wednesday. The only on other data due on either side of the Atlantic is Canadian Housing Starts and Building Permits which will be released at 1.30 pm.
December S&P 500
What an incredible week with the market getting tanked last Monday and Tuesday only to spend the rest of the week recovering most or the previous sell-off as yet again the ‘’Buy the Dip’’ are the winners. Thursday and Friday’s positivity surprised me and as a result I have to respect the price action of the U.S Indices as it looks like the ‘’melt up’’ in the S&P may have stated at last Tuesday’s 3069.50 low print. The McClellan Oscillator closed positive with a +30 print on Friday night. I have written consistently over the past two years there was every chance the S&P could trade as high as 3180 and possibly 3300/3350. The price action last week suggests we could see the latter before the mega crash then begins. I am nearly always flat going into the NFP data and after the much stronger 266K print I waited to sell the S&P which I did at 3142. I am not comfortable in being short and I have now cut this position here at 3144 for a small loss and I am now flat. Today I will be a buyer from 3130/3140 with a 3119 stop. I no longer want to be short the S&P at this time. If I am taken long I will have a T/P level at 3149.
EUR/USD
After the Euro traded lower to my 1.1040 buy level I emailed my Platinum Members to exit any short position at 1.1050 and I am now flat. Today I will again look to buy the market from 1.1000/1.1040 with the same 1.0965 stop.
December Dollar Index
I am still flat the Dollar and today I will raise my sell level to 97.90/98.30 with a higher 98.65 stop.
December DAX
With all my U.S indices trading into my sell range on Friday I did not sell the DAX as two open Equity positions at the same time is enough risk to have on board. For anyone who did sell, the DAX is thankfully trading lower this morning and you can now exit any short position here. Today I will be a small buyer from 13030/13090 with a 12985 tight stop. Despite the awful economic data out of Germany I no longer want to be short the DAX at this time.
December FTSE
The FTSE rallied as expected on Friday as indicated by the market moving back into its Daily Bollinger Band while at the same time the Williams Index gave a buy signal. Unfortunately my aggressive buy level for the FTSE failed as the market rallied as soon as I posted and I am still flat. Today I will move my buy level higher to 7140/7185 with a 7095 stop.
Dow Rolling Contract
As I was already short both the S&P and NASDAQ, I emailed my Platinum Members to cancel any sell level in the Dow and I am still flat. The high volume price has also moved up in the Dow suggesting that we could see a move to 28500 over the coming weeks and today I will now be a buyer on any dip lower to 27800/28940 with a 27690 stop. If the Dow does rally to my target level of 28500 I will be an aggressive seller with a 28620 stop.
December NASDAQ
The NASDAQ traded higher to my 8390 sell level. I am still short and I will now raise my T/P level on this position to 8380. I will also look to buy the market from 8310/8365 with an 8255 stop. If I am taken long a second time I will have a T/P level at 8420.
March BUND
I have now rolled to the March Contract which trades at a Premium of 180 points to the December Contract which has now expired. Thankfully after I posted on Friday the December Contract traded higher to my 170.50 T/P level on my 170.38 average long position and I am now flat. This morning the Bund is trading at 172.30 and I will be a buyer on any dip lower to 171.40/171.85 with a 170.98 tight stop.
Gold Rolling Contract
After Gold traded lower to my 1460.50 buy level I emailed my Platinum Members to exit any long position at 1462.50 as I did not want to hold a long Gold position in Gold over the weekend after Silver got hit for over 3% on Friday and I am now flat. Gold is trading at 1463 as I go to press and today I will be a small buyer from 1442/1452 with a 1435 stop.
Silver Rolling Contract
My long 17.00 Silver position did not work well as I was stopped out of this position at 16.65 shortly after the NFP was released and I am now flat. Despite Friday’s aggressive sell-off I am still looking for both Gold and Silver to bottom this month. Today my Silver buy level will be from 16.05/16.45 with a 15.70 stop.
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