Both the S&P and NASDAQ 100 made new all-time highs on optimism around the timeline for a Coronavirus vaccine. National Institute of Allergy and Infectious Diseases Director Dr. Anthony Fauci said a Coronavirus vaccine could be available earlier than expected if clinical trials prove to be overwhelmingly positive. This follows similar comments from the head of the FDA earlier this week, who said the administration could approve a vaccine before it was finished trials if the rewards outweigh the risks. In terms of economic data, ADP Employment Change data fell short of estimates, but continued a trend of increased hiring. Federal Reserve Bank of New York President John Williams said that Interest Rates will remain low for a long time. And Cleveland Fed President Loretta Mester said the Second Quarter was the trough for the economy and that economic activity would continue to rebound throughout the second half of the year. The Dow led the charge closing with a gain of 455 points at 29,100. European Indices got support following comments from European Central Bank Chief Economist Phillip Lane who said the Euro-Dollar exchange rate does matter, potentially signalling action from the central bank to weaken the currency. That would make European exports more attractive, boosting the growth picture. German Retail Sales unexpectedly fell in July, indicating that the country’s economic recovery will be uneven. Italy’s Economic Minister said the country’s Gross Domestic Product will fall by more than 8% in 2020, but “not much more” than that. Most European Indices ended the day with gains close to 2%. Elsewhere, Oil fell almost 3% on fears the rebound in fuel demand was stalling while Gold decline 1.5% on Dollar strength.
To mark my 2125th 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 153 points yesterday and is now down 181 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 1.54% higher at a price of 3588.
The Dow Jones Industrial Average rose 455 points for a 1.60% gain to close at 29,100.
The NASDAQ 100 rose 1% higher at a price of 12,420.
The Stoxx Europe 600 Index rose 1.8%.
The MSCI Asia Pacific Index rose 0.2%.
This morning the Nikkei closed 0.94% higher at 23,465.
Currencies
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.8% lower at $1.1830.
The British Pound closed 0.6% lower at $1.3301.
The Japanese Yen closed 0.3% higher at 106.22 per dollar.
Bonds
The yield on 10-year Treasuries closed two basis points lower at 0.66%.
Germany’s 10-year yield closed five basis points lower at -0.48%.
Britain’s 10-year yield closed six basis points lower at 0.24%.
Commodities
The Bloomberg Commodity Index fell 0.2%.
West Texas Intermediate closed 2.87% lower at $41.80 a barrel.
Gold closed 1.5% lower at $1,939.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and UK Markit Services PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed at 10.00 am by Euro-Zone Retail Sales. At 1.30 pm we have U.S Retail Sales, Weekly Jobless Claims, Non-Farm Productivity and the Trade Balance. Finally, we have Markit Services and ISM Services at 2.45 pm and 3.00 pm respectively.
September S&P 500
I have witnessed the stock market rally ahead of the 1987 Crash, the Dot Com Bubble ahead of the March 2000 peak, when the NASDAQ subsequently fell 78% and the Global Financial Crisis which began in October 2007, but nothing compares to the current rally that began in the S&P on March 23 when the S&P bottomed at a price of 2170. We have now rallied over 1400 Handles in just over five months where Breadth and Volume remain muted. The CBOE Put/Call Ratio is at its lowest level in 16 years while the Investors’ Intelligence Bull/Bear Ratio is the most extreme since the January 2018 high, while the RSI momentum extreme between the NASDAQ 100 and the Dow has also reached its highest level since January 2018. Meanwhile the VIX continues to diverge relative to the Dow S&P and NASDAQ, closing 1.72% higher at 26.50 last night. The next main event that I await is a trend reversal in the U.S Indices. The S&P was trading below 3300 on August 1 and I have been wrong looking for a top in the market over the past two weeks as any short positions have been slammed. I joined that club yesterday getting stopped out of my latest 3533 short position at 3551. Unfortunately, I emailed my Platinum Members to go short again at a price of 3563 before getting stopped out of this position on the close at 3581 and I am now flat. The S&P is now trading 300 Handles above its 50-day Moving Average – the highest in history- while the top of the Bollinger Band is well below current prices at 3555. In my opinion this is not sustainable and we are due a massive correction. Today I will again look to sell the S&P from 3587/3605 with a wider 3621 stop. Despite the positive price action, I do not want to be long the S&P at this time.
EUR/USD
Following comments from the ECB’s Lane, the Euro is trading 120 points lower from where I marked prices 24 hours ago. This move lower saw the Euro hit my 1.1830 buy level before rallying to my 1.1860 revised T/P level and I am still flat. The Euro has short-term support from 1.1720/1.1760 where I will be a small buyer with a 1.1675 stop. I will now lower my sell level to 1.1860/1.1910 with a 1.1955 stop.
September Dollar Index
Monday’s 91.70 low is now key support for the Dollar. The Dollar was so oversold as shown by the Daily Sentiment Index which closed at 9% bulls last Friday that a reversal was due. This morning, the Dollar is trading at 93.00. We have support from 92.00/92.50 where I will be a buyer with a 91.45 stop.
September DAX
The move lower in the Euro helped the DAX to rally over 500 points off Tuesday afternoon’s 12835 low print. This move lower has me short at 13280 and I will now move my T/P level higher on this position to 13235. I will leave my stop unchanged at 13385. If I am stopped out of this position I will again look to sell the DAX from 13470/13570 with a 13650 stop.
September FTSE
The FTSE continues to trade heavy and I am still flat. Given how oversold the FTSE is trading I still do not want to be short the market at this time. I will now raise my buy level to 5840/5910 with a higher 5795 stop.
Dow Rolling Contract
My Dow plan worked well but you had to be quick. Shortly after the US Indices opened the Dow rallied to my 28900 before selling off to my revised 28818 T/P level and I am still flat. The Dow led the US Markets higher yesterday as the Dow looks to play catchup with the S&P and NASDAQ. The Dow has short-term resistance from 29260/29460 where I will again look to sell with a 29610 stop. If I am taken short, I will have a T/P level at 29110.
September NASDAQ
The NASDAQ traded in a wild range yesterday. After I went short yesterday morning at 12435, the NASDAQ rallied to a high of 12467 before falling almost 300 points to 12170, before rallying back above 12400 into the close. This initial move lower allowed my to cover this position at my 12340 T/P level. Subsequently I emailed my Platinum Members to go short again and I am now short at a price of 12400. I will add to this trade at 12500 with a 12605 stop. My T/P level on this latest short position is at 12310 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
September BUND
As I have said countless times over the past few months that Central Banks will not allow Bond Yields to rise and therefor Bond Markets are a buy on any dip despite the threat of inflation. Yesterday the Bund surged after I posted and I am still flat. I will now raise my buy level to 175.90/176.30 with a 175.45 stop.
Gold Rolling Contract
After Silver hit my buy level I emailed my Platinum Members to lower their Gold buy level to 1895/1915 with a lower 1883 stop. I am still flat and I will leave this new buy range unchanged with a lower 1925 T/P level if executed.
Silver Rolling Contract
Silver traded the whole of my buy range and I am now long at an average rate of 27.45. I will now lower my T/P level on this position to 27.70 whole leaving my stop unchanged at 26.65.
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