U.S. Equities surged to the second 4% rally in three days after Congress authorized nearly $8 billion for virus prevention a day after the Federal Reserve slashed Interest Rates and investors warmed to Joe Biden’s ascendant candidacy. Treasuries fell for just the second time in 10 days. The S&P 500 surged into the close, nearly matching Monday’s rally that was the best in 14 months. Health-care firms led the spike, rising the most since November 2008 as the weak performance in Tuesday’s primaries by Bernie Sanders dented the threat of policies that would upend the industry. Stocks opened higher on speculation other Central Banks and Governments would provide stimulus as the outbreak claimed more lives and new cases piled up. New York reported five new cases yesterday and California had its first related death. The S&P 500 has now surged more than 6% this week, a rebound that began Friday when the Fed pledged support. The S&P 500 is still more than 7% below its February record. Ten-year Treasury yields pushed back above 1%, while two-year dropped to 0.66%. The low rates also helped bring new life into corporate bond deals after a days-long hiatus. Investors are anxious for promised action by the Group of Seven to confront the virus while they’re buying risk assets on dips and watching the world’s biggest bond market move closer to negative yields. The Democratic contest posed a fresh challenge to Trump as nine states went to Biden, who’s positioned as a moderate against a more progressive Sanders in the race for the party’s nomination to take on Trump in November.
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For anyone following my Platinum Service it made 150 points yesterday and is now ahead by 1295 points for March, having made 2223 points in February, 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
Asian stocks extended a global equity rally and European futures pointed higher after an emergency U.S. spending bill to combat the impact of the Coronavirus added to signs of support from policy makers around the world. U.S. Futures Contracts gave back some of Wednesday’s gains. Equities climbed across the region, with the Asian benchmark set to advance for a fourth day. Still, S&P 500 Futures retreated as California called a state of emergency due to the virus. The underlying gauge had surged more than 4% in the wake of Congress authorizing nearly $8 billion for virus prevention. The Bank of Canada joined this week’s wave of global central bank action and Australia’s Finance Minister on Thursday said stimulus will come very soon as speculation grew that governments will provide more help with the outbreak hitting economic growth prospects.
The S&P 500 Index advanced 4.2%, closing on its high at 3130.
The Dow Jones Industrial Average gained 4.5%, for 1173 point gain, closing at 27,090.
The Stoxx Europe 600 Index rose 1.4%.
The U.K.’s FTSE 100 Index added 1.5%.
The MSCI Asia Pacific Index climbed 0.4%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index increased 0.2%.
The Euro decreased 0.6%.
The British Pound rose 0.1%.
The Japanese Yen weakened 0.2%.
Bonds
The yield on 10-year Treasuries rose three basis points to 1.03%.
The yield on two-year Treasuries fell three basis points to 0.67%.
Germany’s 10-year yield fell one basis point to -0.63%.
Commodities
West Texas Intermediate crude fell 0.2% at $47.07 a barrel.
Gold fell 0.2% to $1,637.47 an ounce.
This morning on the Economic Front we have UK BBA Mortgage Approvals at 9.30 am. This is followed at 1.30 pm by U.S. Weekly Jobless Claims, Unit Labour Costs and Nonfarm Productivity. At 3.00 pm we have Factory Orders, Finally, the Bank of England Governor Carney and Bank of Canada Governor Poloz are speaking at 5.00 pm and 5.45 pm respectively.
March S&P 500
The S&P surged almost 130 Handles yesterday to close on its high at 3130. This move higher left a large ‘’Open Gap’’ from Tuesday’s 3003 close to yesterday afternoon’s intra day low at 3032. The S&P moved 40 Handles in the last 25 minutes of trading to hit my sell range at 3112. As the Dow had traded the whole of my sell range and I did not want to have two short positions overnight I covered this position on the Futures closing bell at 3114 and I am now flat. Hopefully you got a better fill than me with the market trading at 3084 this morning. I cannot see such a large Gap from last night’s close left unfilled especially as the Chinese Equity Markets just closed with a solid gain of 2%. There is now doubt that given the scale of the 273 Handle rally in the March S&P since last Friday’s 2855 afternoon low that the Central Banks are buying the markets. However, a lot of trapped long positions will use any further rally from here to go to the sidelines. The goal of second wave retracements in bear markets is to turn investors beliefs to the view that the bull market remains intact. Yesterday’s rally was a big step in achieving that belief. The S&P has strong resistance from 3140/3160 and I will be a seller in this area with a 3175 stop. We have initial support from 3055/3070 and I will be a buyer here with a 3044 stop. If I am taken long and subsequently stopped out of this position I will be a more aggressive buyer from 3002/3022 with a 2989 stop.
EUR/USD
The Euro just missed my 1.1090 buy level with a 1.1095 low print before rallying into the New York close and I am still flat. Given the extent of the 400 point move higher since late January I am reluctant to chase the Euro higher. Therefore, I will leave my 1.1050/1.1090 buy range unchanged with the same 1.1005 stop.
March Dollar Index
No Change as I am still a small seller from 97.70/98.10 with the same 98.45 stop.
March DAX
Expectations of more stimulus from the ECB sees the DAX opening 1% higher this morning, despite the S&P Futures Market trading 1.4% lower. The DAX has strong support from 11950/12020 and I will be a buyer on any dip to this area with a 11885 stop. I still do not want to be short the DAX at this time.
March FTSE
The FTSE has made solid gains since I posted 24 hours ago as it tries to work off its severe oversold condition. The market never cam close to my 6650 buy level as we are now trading at 6820 as I go to press. The FTSE has short-term support from 6680/6730 and I will be a buyer on any dip to this area with a 6635 stop.
Dow Rolling Contract
My Dow plan worked well with the market trading the whole of my sell range. I went short at 27020 and I covered this position too early at 26890 and I am now flat. This morning the Dow is trading over 380 points lower than last night’s 9.00 pm Cash closing. This is a large Gap to fill. As long as the VIX stays above 25 we are going to see these wild swings in the market. Last night after a 13% fall the VIX closed at 32. Today I will be a seller from 27100/27250 with a 27375 stop. The Dow has support from 26350/26510 and I will be a buyer in this area with a 26245 stop.
March NASDAQ
My NASDAQ plan worked well with the market trading higher to my 8860 sell level before selling off to my revised 8820 T/P level and I am now flat. The NASDAQ has strong resistance from 8960/9040 and I will be a seller in this area with a 9105 stop. I still do not want to be long the NASDAQ at this time.
March BUND
I am still flat the Bund and I will now lower my sell level to 178.10/178.50 with a lower 178.85 stop.
Gold Rolling Contract
I am still flat Gold and my only interest in buying this market is from 1605/1615 with the same 1597 stop.
Silver Rolling Contract
Silver traded in a narrow range yesterday and I am still flat. Just like Gold above I do not want to chase this market higher and I will leave my 16.45/16.85 buy level unchanged with the same 16.10 stop. If I am taken long I will have a T/P level at 17.10.
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