The Dow Jones Industrial Average finally broke the 20,000 resistance level for the first time in some style as stocks around the world extended a rally after corporate earnings reignited investors optimism in economic growth. Meanwhile both Bonds and oil sold off to close lower. The Dow rally was led by Boeing which had its best rally in three months to help lift the Dow past the round – number milestone after a handful of rallies fell short in the past month. Financial and Technology shares surged as investors piled into stocks that benefit from economic growth. The Yield on 10 – Year Treasury Notes topped 2.50 percent while oil fell on increased US stockpiles.
To mark my 1250th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2750 for my Platinum Service which includes 1/4 updated emails throughout the trading day. This offer is open to both new and existing members and if anyone is interested can you please contact me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 130 points yesterday and is now ahead by 1488 points for January having made 1351 points in December, 1971 in November and 1582 in October. The previous four months saw gains of 1142, 1782, 1682 and 2550 points respectively. Since I started this Platinum Service in June 2015 it has averaged a monthly gain of over 1900 points.
The Dow is now up 1.7% since Trumps’ Inauguration as he took steps to fulfill pro-growth campaign promises, including identifying possible infrastructure projects, approving two oil pipelines and cajoling American carmakers to build plants in the US. The Dow closed 155 points higher at 20,067 in New York and the Futures Market indicate that the Dow will open at least another 50 points higher when the Cash Market re-opens this afternoon. The rise in the Dow from 19,000 was the second fastest 1000 – point gain in the measure’s history. The Dow is now up 9.5% since Trump’s election victory on November 8, 2016.
The rise in the US stock market helped the DAX to close at its highest level since July 2015 with the market finally breaking the key 11810 resistance level while the EuroStoxx 600 Index closed 1.3% higher led by better results from Logitech International which beat Quarterly profit estimates, surging 16%. Meanwhile in Spain Banco Santander rose 3.4% on better-than-expected Quarterly profits.
In currencies, the US Dollar weakened against all of its Group of 10 peers except the Australian Dollar, as the Bloomberg Dollar Spot Index resumed its slide. It closed 0.3% lower and is poised for a fifth straight weekly decline. The Dollar lost most against the Canadian Dollar and British Pound which surged another 1%. The Mexican Peso gained more than 1% even as Trump took action to advance a border wall. Overnight the Mexican President said that Mexico will not be paying for the construction of the wall.
In other news, UK Prime Minister Theresa May’s Government will publish the Bill to trigger Brexit later this morning and will be debated at a later date. The Government decided to publish the Bill after losing its appeal against a High Court ruling that required PM May to seek a vote among lawmakers before triggering ”Brexit”
This morning on the economic front we already had the release of German GFK Consumer Confidence which came in better than expected at 10.2. Next we have UK GDP, Index of Services and BBA Loans for House Purchase at 9.30 am and CBI Reported Sales at 11.00 am. At 1.30 pm we have the US Weekly Jobless Claims, Chicago Fed National Activity Index, Trade Balance and Wholesale Inventories. This is followed by Markit US Services/Composite PMI and the Bloomberg Consumer Comfort Index at 2.45 pm. Finally on a really busy day for economic data we have New Home Sales and The Leading Index at 3.00 pm followed by the Kansas City Fed Manufacturing Index at 4.00 pm.
March S&P 500
The S&P exploded to the upside as expected with the market within touch distance of my long term target from 2300/2334. Yesterday’s move higher has left a large ”Open Gap” from the Chicago close on Wednesday at 2277 to yesterday’s open at 2284. This move higher sees the S&P trading at the top of both its Bolinger Band and Williams Index but until we get a sell signal it is very difficult to pick a top in what is now a nine year bull trend. Overnight the S&P hit my 2298.50 sell level. Despite the market trading overbought I am not comfortable in being short and I have now decided to exit this position here at 2296.50 and go flat. The next resistance for the S&P is from 2304/2310 and I would prefer to put on a short in this area with a tight 2315 stop. I will look to put on a more long-term short position on any rally higher to 2330 with a wider 2342 stop. I will now raise my buy level to 2283/2288 with a 2278 stop.
EUR/USD
The Euro traded in a very narrow range yesterday. I am still flat and today I will raise my buy level slightly to 1.0650/1.0690 with the same 1.0615 stop. My only interest in selling the Euro is still on a rally higher to 1.0820/1.0850 with the same 1.0890 stop.
March Dollar Index
My Dollar plan worked well with the Dollar trading lower to my 99.90 buy level before rallying to hit my 100.30 T/P level and I am now flat. The Dollar is very oversold and today’s new low in the Dollar for this move was not confirmed by a higher level in the EUR/USD which may be significant. Today I will again look to buy the Dollar on any dip lower to 99.40/99.80 with a 98.95 stop. Given how oversold the Dollar is trading I do not want to be short the Dollar at this time.
March DAX
Thankfully we had no sell level in the DAX which finally broke its July 2015 high at 11810. I am still flat the DAX an in my opinion this break is significant and I will now raise my buy level to 11770/11820 with a 11720 stop. The next target level for the DAX is 11930/11950 and perhaps as far as 12040 on this move. I will be a small seller on any rally higher to 12020/12075 with a 12120 tight stop.
March FTSE
Unfortunately the FTSE just missed my 7070 buy level with a 7085 low print after I posted yesterday morning and I am still flat. The FTSE is struggling to move higher hampered by ”Brexit” and the huge rise in Sterling over the past few trading sessions. Today I will leave my buy level unchanged at 7030/7070 with the same 6995 stop. Despite the FTSE trading below its 10 year trendline at 7140 I do not want to be short the market at this time, especially with the US Indices making new all-time highs.
Dow Rolling Contract
Finally the Dow got some legs and rallied over the 20,000 round number milestone. Thankfully we had no sell level in the Dow preferring instead to look to put on a more macro short position on board if we trade up to the 20350/20500 area over the coming days. The fact that it too five attempts to break 20,000 this level should now act as good support. For this reason I will now look to buy the Dow on any dip lower to 19960/20020 with a 19915 tight stop.
March BUND
The Bund traded lower to my 161.70 buy level before rallying to a 162.00 high. The market spent a couple of hours trading between this range before selling off into the close. I am still long the Bund as due to a system’s failure on my end I was not able to exit this trade. Hopefully you were able to make some points from this call yesterday. This morning the Bund is oversold and trading at the bottom of its Daily Bollinger Band and Williams Index as it follows the US Treasury Market lower. I will look to buy the Bund again on any further dip lower to 161.20 with the same tight 161.10 stop on this position. If I am taken long at my second buy level I will then have an average buy level at 161.45. If this happens I will lower my T/P level to 161.70. Otherwise I will leave my T/P level unchanged at 161.90 on my original long position.
Gold Rolling Contract
My Gold call worked perfectly yesterday with the market hitting my 1193 buy level before trading higher to a 1203 high print and this rally enabled me to cover this position at my 1200 T/P level and I am now flat. Today I will again look to buy Gold on any dip lower to 1182/1189 with a 1175 stop.
Silver Rolling Contract
After I posted yesterday morning Silver traded lower to my second buy level at 16.85 which now puts me long at an average rate of 16.98. I will leave my stop unchanged while at the same time lowering my T/P level to 17.20.
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