U.S. Equity Markets surged on vaccine optimism, finishing the day higher but well off the intra-day highs. The Dow led the market higher closing 2.95% higher, while the NASDAQ 100 finished the session with a loss of 2.16%. Vaccine data was the big story. Pfizer and BioNTech said their joint COVID-19 vaccine candidate showed a 90% efficacy rate in late-stage trials. The 90% effectiveness is well above expectations. National Institute of Allergy and Infectious Diseases director Dr. Anthony Fauci has said he is hoping for a COVID-19 vaccine to be 70% to 75% effective. The companies added that the vaccine showed no serious adverse effects. This was the big driver yesterday. An effective vaccine would allow the economy to move toward some sort of normal. This bodes well for the overall economic recovery and future growth. Elsewhere, election uncertainty subsided after Joe Biden was announced as the winner of the 2020 presidential election. Biden is expected to send a deficit-financed economic recovery bill to Congress for approval soon after being sworn into office. European Markets surged led by the French CAC and German DAX which closed higher by 7.6% and 5.35% respectively. German Export data for September were stronger than expected, implying the regional economy may be outperforming low expectations. Euro-Zone Investor Confidence data for November beat estimates, indicating individuals are more optimistic about the growth outlook than previously thought. The Bank of France said the second wave of Coronavirus lockdowns will have a smaller impact on the economy than the first. Italy’s government approved a $6 billion Coronavirus aid package for businesses, while also adding $3 billion in increased government spending. Elsewhere, Oil spiked on growth optimism, closing 7.89% higher, while Gold was slammed, closing 4.45% lower as investors rotated into risk assets like stocks.
To mark my 2175th 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 170 points yesterday and is now ahead by 817 points for November having made 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 1.17% higher at a price of 3550.
The Dow Jones Industrial Average closed 834 points higher for a 2.95% gain at a price of 29,158.
The NASDAQ 100 closed 2.16% lower at a price of 11,830.
The Stoxx Europe 600 Index closed 3.1% higher.
The MSCI Asia Pacific Index rose 0.4%.
Yesterday, the Nikkei closed 2.12% higher at a price of 24,839.
Currencies
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.4% lower at $1.1817.
The British Pound closed unchanged at $1.3151.
The Japanese Yen closed 1.8% lower at 105.32 per dollar.
Bonds
The yield on 10-year Treasuries closed 10 basis points higher at 0.92%.
Germany’s 10-year yield closed ten basis points higher at -0.52%.
Britain’s 10-year yield closed eight basis points higher at 0.37%.
Commodities
The Bloomberg Commodity Index closed 1.1% lower.
West Texas Intermediate closed 7.89% higher at $40.13 a barrel.
Gold closed 4.45% lower at $1858 an ounce.
This morning on the Economic Front we have UK Average Earnings and Unemployment at 7.00 am. This is followed at 10.00 am by German and Euro-Zone ZEW Survey. At 11.00 am we have the U.S NFIB Business Optimism Survey. Finally, at 3.00 pm we have the JOLTS Job Openings.
December S&P 500
Yesterday was a classic example of why I prefer only to be stopped out on a ‘’Closing Basis only’’. I know you need a wide stop but when you see a market ‘’Gap’’ this high on a news announcement you just know we will close some if not all of such large movements. There is nothing that you can do about a surprise announcement but there is no doubt in my mind that some large investment houses new about yesterday’s Pfizer Vaccine news ahead of the 12.00 pm release yesterday. I have never seen the S&P trade 160 Handles higher from the previous day’s close, before reversing 120 Handles of this move into last night’s close. I was short at an average rate of 3557 before getting stopped a few seconds later at a price of 3581. We made a morning high at 3667 before falling to close at 3546. The Dow as higher by 1600 points at one stage before giving up 50% of these gains into the close. The S&P has strong support at Friday’s Gap from 3495/3515 where I will be a buyer with a 3479 stop. If I am taken long I will have a T/P level at 3542.
EUR/USD
The Euro reversed earlier gains to trade lower to my buy range and I am now long at a price of 1.1820. I will add to this position at 1.1770 with the same 1.1745 stop. I will now lower my T/P level to 1.1861.
December Dollar Index
I am still flat the Dollar as the market fell shy of my 91.90 buy level. I will now raise my buy level to 92.00/92.40 with a 91.55 stop. If I am taken long I will have a T/P level at 92.75.
December DAX
Most traders will only have 2/3 maximum open equity positions at the same time as this is enough risk. As I was already short the S&P and FTSE I did not sell the DAX as I had lost enough points on my existing positions and I am still flat the DAX. The DAX is severely overbought having rallied the best part of 2000 points in the last six trading sessions. We have resistance from 13190/13290 where I will be a small seller with a 13405 stop. I still do not want to be long the DAX at this time.
December FTSE
I sold the FTSE at an average rate of 6020 before getting stopped a few seconds later at 6095 and I am still flat. Despite yesterday’s aggressive move higher in the FTSE, I still do not like the price action. The FTSE has resistance from 6180/6240 where I will be a seller with a 6305 stop.
Dow Rolling Contract
The Dow rallied 1610 points higher yesterday to hit an intra-day high in New York at 29,933 and has now rallied nearly 4000 points in six trading sessions from the recent low at 26143 on October 30th. This move higher has left many ‘’Open Gaps’’ which we know will get filled at some stage. In points terms this is the most dramatic move of all-time. Reality set in with the Dow reversing 800 points yesterday’s opening gain into last night’s close. Both the Dow and S&P made new all-time highs yesterday as optimism hit extreme levels. Internally the market was weak for such a dramatic rise with the McClellan Oscillator only closing at positive 144. The Dow has resistance from 29550/29750 where I will be a seller with a 30005 ‘’Closing Stop’’. I still do not want to be long the Dow at this time.
December NASDAQ
My NASDAQ plan worked well with the market trading lower to my 11980 buy level before rallying to my 12105 T/P level and I am now flat. The NASDAQ came within 40 points of the September 4Th all time high of 12440 before reversing a huge 600 points into the close. This should not be happening on a day that the Dow and S&P make new-all-time highs. Today. I will be a seller from 12150/12300 with a 12410 stop which is just above yesterday’s high print. We have support from 11500/11600 where I will be a buyer with a 11395 stop.
December BUND
My Bund plan worked well with the market trading higher to my 176.40 sell level before selling off to my too tight 176.05 T/P level and I am now flat. The break and close below 176.00 is bearish. I will now look to sell the Bund from 175.90/176.40 with a 176.85 stop. If I am taken short I will have a T/P level at 175.45.
Gold Rolling Contract
Gold fell $100 yesterday in what turned out to be another dramatic reversal for the precious metal. This move lower was so fast that I bought Gold at the bottom of my buy range at 1902 before being stopped at 1889. Subsequently I emailed my Platinum Members to buy Gold again at 1850 before we rallied overnight to my 1867 T/P level and I am now flat. Today, I will again be a buyer from 1832/1847 with a 1819 stop. If I am taken long I will have a T/P level at 1859.
Silver Rolling Contract
Silver traded lower to my 24.40 buy level before stopping me out at 23.75 and I am now flat. Silver is higher, trading at 24.10 as I go to press. We have support from 22.70/23.30 where I will be a buyer with a tight 22.25 stop. If I am taken long I will have a T/P level at 23.85.
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