U.S. Equity Markets were mixed as investors digested stimulus, economic data, and the Federal Reserve. Although the Dow closed lower, the NASDAQ 100 finished the day at a new all-time high with a gain of 0.57%. For the most part of yesterday markets bounced around as investors digested a slew of headlines. In the early morning, markets rose on stimulus optimism as Republican and Democratic leadership met to discuss a government funding bill, which they hoped would include Coronavirus aid, ahead of the deadline later this week. And lawmakers were reportedly nearing an agreement that included another round of Stimulus Cheques. Markets soon gave up their gains as Retail Sales for November fell below estimates. This sparked fears of slowing economic activity as U.S States reintroduce COVID-19 restrictions. In the afternoon, the sell-off continued as the Federal Reserve’s December policy decision disappointed, with nothing new really coming out of it. But the Fed did say it would continue these purchases until “substantial further progress has been made toward the Committee’s maximum employment and price stability goals.” Markets ripped higher during Fed Chair Jerome Powell’s press conference, as he said the Fed would increase Asset Purchases if the recovery slows. He added that it’s reasonable to expect solid economic growth in the second half of next year. European Markets closed higher for the fourth consecutive trading session. Markit Euro-Zone’s preliminary manufacturing purchasing managers’ index (PMI) data for December rose more than expected, highlighting regional economic strength despite lockdown measures. The European Central Bank said banks could resume paying limited dividends again next year. This is a sign that it is more optimistic about the economic growth outlook. The German government called on the European Union to provide more fiscal support for businesses to help them survive the pandemic. German health officials said a COVID-19 vaccine could receive approval from the European Medicines Agency before Christmas. Elsewhere, Bitcoin has surged 17% since I posted 24 hours ago, trading at $22,200 as I go to press, while Oil closed 0.46% higher on growth optimism as it looked like progress has been made on a Stimulus Bill.
To mark my 2200th 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 18 points yesterday and is now ahead by 1278 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 0.18% higher at a price of 3701.
The Dow Jones Industrial Average closed 44 points lower for a 0.15% loss at a price of 30,154.
The NASDAQ 100 closed 0.57% higher at a price of 12,668.
The Stoxx Europe 600 Index closed 0.5% higher.
The MSCI Asia Pacific Index rose 0.3%.
This morning the Nikkei closed 0.18% higher at a price of 26,806.
Currencies
The Bloomberg Dollar Spot Index closed 0.2% lower.
The Euro closed 0.2% higher at $1.2183.
The British Pound rose 1.1% to close at $1.3485.
The Japanese Yen closed 0.1% higher at 103.42 per dollar.
Bonds
Germany’s 10-year yield closed six basis points higher at -0.55%.
Britain’s 10-year yield closed one basis point higher at 0.28%.
US 10 Year Treasury closed two basis points higher at 0.93%.
Commodities
West Texas Intermediate crude closed 0.46% higher at $46.83 a barrel.
Gold closed 0.66% higher at $1,859.10 an ounce.
This morning on the Economic Front we have Euro-Zone CPI at 10.00 am and this is followed at 12.00 pm by the Bank of England Rate decision including its latest Bond Purchasing announcement. At 1.30 pm we have U.S Weekly Jobless Claims, Building Permits and Housing Starts. Finally, at the same time we have the Philly Fed Manufacturing Survey.
March S&P 500
The S&P fell shy of my buy level before surging overnight to yet another all-time high. This move higher comes despite the fact that the McClellan Oscillator closed with a -1 print last night. This latest move higher was fuelled by European Central Banks and the Fed buying Bonds at a record pace. The level of intervention is so high that the Indices have risen vertically since March despite the fact we had no earnings growth in 2019 and negative earnings growth this year. News that a Stimulus Bill will finally be announced this week where most Americans will receive a Stimulus Cheque for $600 has added to the rally. On the Monthly Chart the S&P is now trading an unprecedented 900 Handles above its 50 Day Moving Average which comes in at a price of 2813. The S&P has now rallied over 1500 Handles since its March 23 low. In my opinion, the charts across all US Indices are stretched to breaking point and reversion risk continues to build. Although markets may rally further as we are in the seasonally strongest period of the year, this is a dangerous time to be caught long without a tight stop. This latest move higher has me short the March S&P here at 3714. I will add to this trade at 3730 with a now higher 3741 ‘’Closing Stop’’. The March contract closed at 3692 last night so yet again we are due to open leaving a large ‘’Gap’’ from yesterday’s Chicago close. My only interest in buying the S&P is from 3665/3680 with a 3653 tight stop. I will now raise my T/P level on this short Position to 3703. If I am taken long I will have a T/P level at 3689.
EUR/USD
My Euro plan worked well with the market trading higher to my 1.2210 sell level before falling to a post FOMC low of 1.2125. As I wanted to be flat ahead of the Powell press conference, I covered this position at 1.2192. This morning the Euro is trading higher at 1.2235. The Euro is severely overbought and due a correction. This correction will coincide with a sell-off in the Equity Markets. The Euro has short-term support from 1.2080/1.2130 where I will be a small buyer with a 1.2035 stop. We have resistance from 1.2280/1.2330 where I will be a seller with a 1.2375 stop.
March Dollar Index
The Dollar fell shy of my 90.65 T/P level with a 90.58 high print before selling off this morning to my second buy level at 89.80. I am now long at an average rate of 90.05 with the same 89.45 tight stop. I will now lower my T/P level on this position to 90.30.
March DAX
I emailed my platinum Member to raise their sell level in the DAX yesterday morning. As a result I am now short this morning at 13660 with the market trading higher at 13705 as I go to press. Despite Germany Reporting a record number of COVID 19 cases this morning the DAX does not care as more and more Stimulus will be forthcoming. I will raise my T/P level on this position to 13640 while leaving my 13745 stop unchanged. This ‘’stop’’ will probably be executed later this morning and if any of the above levels are hit, I will be back with a new update for my Platinum Members.
December FTSE
I am still flat the FTSE as the market continues to lag the gains made by the other main Indices. This is no surprise with Cable trading at 1.3580 this morning. As I am already short both the DAX and S&P, I will now raise my FTSE sell level to 6590/6650 with a higher 6705 stop.
Dow Rolling Contract
The Dow traded in a narrow range yesterday and I am still flat. With the NASDAQ and S&P trading at new all-time highs it is only a matter of time before the Dow joins them. I will leave my 30450/30630 sell level unchanged with the same 30755 tight stop. I no longer want to be a buyer of the Dow at this time.
March NASDAQ
Frustratingly, the NASDAQ just missed my 12540 buy level before surging to trade at another new all-time high of 12735 as I go to press. The NASDAQ has strong resistance from 12775/12850 where I will be an aggressive seller with a 12945 stop.
March BUND
The BUND got hit for 100 points yesterday and I am still flat. The break and close below 178 is bearish. As a result, I will now lower my sell level to 177.90/178.40 with a wider 178.85 stop.
Gold Rolling Contract
I am still flat as the precious metals trade higher on the back of the weaker Dollar and the 17% rally in Bitcoin. Gold has resistance from 1895/1910 where I will be a small seller with a 1921 stop.
Silver Rolling Contract
Silver has exploded to the upside since I posted yesterday morning with a gain of 6%. The break above 25.00 is bullish. I will now raise my buy level to 24.60/25.20 with a 23.95 stop. If I am taken long I will have a T/P level at 25.65.
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