U.S. Equity Markets fell for a fifth day, the longest losing streak since August, while Treasury 10-year note yields dropped to another record low as investors weathered a barrage of reports on the widening Coronavirus outbreak. The S&P 500 closed down 0.4%, after plunging more than 3% each of the previous two days. The Dow Jones Industrial Average dropped 122 points after tumbling almost 2,000 points on Monday and Tuesday, while the Nasdaq Composite rose. European shares pared losses to close mostly higher, while Asian equities finished in the red. Oil dropped below $50 a barrel and Gold edged higher. President Donald Trump and Federal Health Officials plan to brief the U.S. public Wednesday on efforts to prevent the spread of the coronavirus. Health officials in Nassau County on New York’s Long Island are monitoring 83 people who have visited mainland China or may have come in contact with the virus. Earlier, German and American officials warned of a pandemic. Diageo Plc and Danone SA said that the outbreak will hit sales in China. The first cases in Greece and in South America emerged, while Spain locked down a seaside resort hotel with about 1,000 guests and workers inside. Risk assets are struggling to rebound as Coronavirus cases steadily climb outside the epicenter in China. South Korea said its national total rose to more than 1,000, while American health officials Tuesday warned that they expect the epidemic to spread in the U.S. Traders may be looking out for further signs of policy accommodation after American central bankers said they are closely monitoring the spreading virus, though it’s “still too soon” to say whether it will change the outlook. Elsewhere, a gauge of high-yield credit risk for European issuers rose for a fifth day. Industrial metals and minerals mostly dropped, including copper and iron ore. Bitcoin slumped for a third day.
The wrenching stock sell-off extended overnight, sending a global benchmark heading for its lowest close since October, while government bond yields sank to record levels. The MSCI All-Country World Index fell for a sixth straight day, with Japan leading losses at over 2.5% down. Futures on the S&P 500 tumbled 1.5%, after declines in the index had eased some on Wednesday. The Japanese Yen rose, and 10-year U.S. and Australian yields hit fresh record lows Thursday. With the number of Coronavirus cases mounting outside China, investors have yet to see the signs of a peak that had helped spur a recovery in Chinese shares. Oil dropped further
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For anyone following my Platinum Service it made 780 points yesterday and is now ahead by 1583 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 decreased 0.2% to 3116, hitting its lowest in eleven weeks on its fifth consecutive decline.
The Dow Jones Industrial Average fell 0.5%, closing at 26,957.
The Nasdaq 100 rose 0.45% to close at 8873.
The Stoxx Europe 600 Index closed unchanged at 404.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index climbed 0.2%.
The Euro was little changed at $1.0884.
The British Pound dipped 0.8% to $1.2901.
The Japanese Yen weakened 0.2% to 110.45 per dollar.
Bonds
The yield on 10-year Treasuries declined four basis points to 1.35%, which is the lowest level on record.
The yield on 30-year Treasuries closed unchanged at 1.83%.
Germany’s 10-year yield rose one basis point to – 0.51%.
Britain’s 10-year yield fell two basis points to 0.50%.
Commodities
West Texas Intermediate crude sank 2.9% to $48.72 a barrel, the lowest level in fourteen months.
Gold strengthened 0.2% to $1,639 an ounce.
This morning on the Economic Front we have Euro-Zone Money Supply, Business Climate and Economic Sentiment Indicator. This is followed at 1.30 pm by U.S. GDP Durable Good Orders and Weekly Jobless Claims. Finally, we have Pending Home Sales at 3.00 pm and the Kansas City Fed Manufacturing Activity Index at 4.00 pm.
March S&P 500
I deliberately waited to post late yesterday morning as the Stock Markets were getting hit hard. As I have said countless times when trying to envisage at least a temporary bottom in the S&P, the McClellan Oscillator is best signal for this event. The MO may only close at -250 or lower a few times a year and generally after this happens the S&P is materially higher over the next couple of weeks. After the S&P hit my 3098 buy level we rallied to an afternoon high at 3181 which enabled me to cover this position at my 3130 T/P level and I am now flat. After the Coronavirus extended to every Continent except Antartica the S&P got slammed into the close. The sell-off continued overnight with the S&P trading to a low of 3059.50 before bouncing to 3090 as I go to press. Last night the MO closed at -298 which is one of the lowest on record. I am now bullish based on this indicator. Today my buy level will be from 3055/3075 with a 3042 stop. If I am taken long and stopped out of this position I will be an aggressive buyer from 3005/3025 with a 2989 wider stop.
EUR/USD
Yet again the Daily Sentiment Indicator proves its worth with the Euro now 150 points higher than last week’s low. I am still flat and today I will raise my buy level to 1.0835/1.0875 with a 1.0795 stop.
March Dollar Index
I will now lower my sell level in the Dollar to 99.20/99.60 with a 100.05 stop.
March DAX
My DAX plan worked really well with the market trading lower to my 12400 buy level before rallying to my 12505 T/P level with an afternoon high at 12840 and I am now flat. The DAX is extremely oversold and my buy level today will be from 12350/12420 with a 12280 stop. If I am taken long I will have a T/P level at 12495.
March FTSE
Just as I posted the FTSE dropped from my 6870 buy level to a low at 6822 before rallying to my 6930 revised T/P level and I am now flat. With the Pound falling yesterday I would expect the FTSE to hold in even if the US Indices get hit hard initially when the markets open there this afternoon. Today I will be a buyer from 6800/6850 with a 6745 stop.
Dow Rolling Contract
The volatility in the Dow is astonishing with the market falling over 1000 points from yesterday’s 27530 rebound high. My Dow plan worked well with the market trading lower to my 26800 buy level before rallying to my 27020 T/P level and I am still flat. With the MO closing at -298 last night I am looking for the Dow to put in a more sustainable bottom. Today I will be a buyer from 26420/26580 with a wider 26265 stop. If I am taken long I will have a T/P level at 26790.
March NASDAQ
My NASDAQ plan also worked well with the market trading lower to my 8750 buy level before bouncing to my revised 8840 T/P level and I am now flat. Although the NASDAQ closed higher last night it is opening lower this morning in London. We have good support from 8650/8730 and I will be a buyer in this area with a 8580 tight stop.
March BUND
Thankfully the Bund traded lower to my 175.50 T/P level on my latest 175.80 short position and I am now flat. Today I will be a small seller from 176.45/176.85 with a 177.25 stop.
Gold Rolling Contract
The 96% DSI reading for Gold last Friday saw weakness in Gold despite the Stock Markets getting slammed over the past few days. If Gold cannot rally on this news then traders who are long will start to exit these positions before Gold also crashes. Today I will lower my sell level to 1672/1687 with a 1698 stop.
Silver Rolling Contract
I was stopped out of my 18.30 long position at 17.85 yesterday afternoon and I am now flat. I will stay flat Silver until I have a better edge in this market.
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