U.S. Equity Markets posted the biggest weekly gain since 1974 as investors looked past staggering Jobless Numbers when the Federal Reserve released new measures to cushion the fallout from the Coronavirus. Oil fell as investors saw a supply-curb proposal as insufficient. The S&P 500 Index rallied for the third time in four days, bringing last week’s increase to 12%. The Fed announced another series of sweeping steps to provide as much as $2.3 trillion in additional aid just as data showed the number of claims for unemployment benefits surged for a third week. Anthony Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases, said U.S. fatalities from Covid-19 may be far fewer than earlier projections. Fed Chairman Jerome Powell reiterated that the U.S. Central Bank was committed to using all its powers to help the country recover. The Fed will wade into the municipal-bond market to an unprecedented degree, can now purchase “fallen angel” bonds from companies that have recently lost their investment-grade ratings, and has expanded its Term Asset-Backed Securities Loan Facility to include top-rated commercial mortgage-backed securities and collateralised loan obligations. The surprise pledge from the Fed to buy recently downgraded corporate bonds boosted some of the biggest ETFs tracking the securities. The $14.8 billion iShares iBoxx High Yield Corporate Bond ETF surged the most since January 2009. Yesterday, U.S. stocks fell before the start of one of the most uncertain earnings seasons on record as the Coronavirus pandemic rattles the global economy. The S&P 500 Index pared losses after dropping as much as 2.5%, with gains in consumer discretionary, technology and communication companies offsetting declines in other major groups. Oil slipped as investors weighed whether an unprecedented deal by the world’s biggest producers to cut output could stabilise the market. Treasuries and the US Dollar retreated. With the Coronavirus pandemic sowing chaos across the world, the investment community has been lost in a fog when it comes to corporate profits. As the earnings season kicks off this week, traders might get a sense of how bad the hit to global earnings could be as the outbreak upends the global economy.
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For anyone following my Platinum Service it made 690 points yesterday and is now ahead by 2253 points for April, having made an incredible 9264 points in March, 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
The S&P 500 is trading below the 2,800 level — a major support line in 2019 that served as resistance the prior year. With one of foggy earnings season kicking off this week, there may be few catalysts to push stocks higher.
The S&P 500 declined 1%, closing at a price of 2761.
The Dow Jones Industrial Average fell 1.4%, closing at 23,390.
The NASDAQ 100 Index rose 1.14% to 8332.
The MSCI Asia Pacific Index fell 0.3%.
The MSCI Emerging Market Index declined 0.5%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index dipped 0.2%.
The Euro fell 0.2% to $1.0916.
The Japanese Yen appreciated 0.7% to 107.68 per dollar.
Bonds
The yield on two-year Treasuries gained two basis points to 0.25%.
The yield on 10-year Treasuries climbed four basis points to 0.76%.
The yield on 30-year Treasuries increased five basis points to 1.39%.
Commodities
The Bloomberg Commodity Index decreased 0.1%.
West Texas Intermediate crude decreased 0.4% to $22.68 a barrel.
Gold increased 0.7% to $1,712.30 an ounce.
This morning on the Economic Front we have no data of note from either the Euro-Zone or the UK. The only U.S Data is Import/Export Price Index at 1.30 pm.
June S&P 500
just as data showed the number of claims for unemployment benefits surged for a third week, the Fed announced another series of sweeping steps to provide as much $2.2 Trillion in additional aid. The S&P which had tested a low of 2700 on the Weekly Jobless Claims surged over 100 Handles as traders (the Fed) do everything in their power to have a V-Shaped recovery. If you go back through history, if we have US recession within two years of a Presidential Election, the incumbent is defeated when seeking re-election. So far, the only Leader calling it straight is Canadian PM Trudeau who said there will be no norm until a vaccine is produced and given to the World’s population. For this reason, why in my opinion we cannot have a V-shaped recovery. Social Distancing will stay with us until this vaccine is produced. This will cause massive problems for the Travel and Leisure Industry, especially Airlines, Hotels and Restaurants. Remember the world was slowing down in December and January (especially Europe) ahead of Coronavirus. On Thursday my S&P plan worked well with the market trading higher to my 2782 sell level before selling off to my 2770 revised T/P level. Subsequently, I emailed my Platinum Members to go short again at 2800 before we sold off to my 2782 T/P level and I am now flat. On Sunday night when the S&P Futures Market re-opened we saw a wild 15 minutes of price action with the S&P opening higher at 2817 before falling 100 Handles. Yesterday afternoon the S&P hit a low of 2710, just above Thursday’s 2700 low print before rallying into the close and again overnight. I will now raise my buy level in the S&P to 2695/2715 with a 2679 stop. The S&P has an ‘’Open Gap’’ from March 6, at 2963 and this level could be filled before Phase 2 is over. The S&P has initial resistance from 2840/2860 where I will be a seller with a 2875 stop.
EUR/USD
The Euro rallied to my 1.0930 sell level on Thursday before trading to a low of 1.0893 yesterday afternoon. This move lower enabled me to cover this position at my revised 1.0905 T/P level and I am now flat. Today I will be a small seller from 1.0980/1.1020 with a 1.1065 stop.
June Dollar Index
The Dollar traded the whole of my buy range for a 99.35 average long position before rallying to my revised 99.60 T/P level and I am now flat. The Dollar has support below here from 98.40/98.90 where I will be an aggressive buyer with a 97.95 stop.
June DAX
Thankfully we had no sell level in the DAX on Thursday with the DAX surging to trade at 10750 this morning. I will now raise my buy level to 10350/10500 with a 10240 stop. I still do not want to be short the DAX at this time.
June FTSE
Shortly after I posted on Thursday the FTSE traded lower to my 5710 T/P level on my 5780 short position and I am still flat. This morning the FTSE has traded to a high of 5928 before selling off 100 points in the last hour. Today I will be a seller from 5890/5960 with a 6010 tight stop. I still do not want to be long the FTSE at this time.
Dow Rolling Contract
My Dow plan worked well with the market trading higher to my 23940 sell level on the latest Fed aid programme before selling off to my 23700 T/P level and I am now flat. The Dow as heavy all-day yesterday, trading below 23100 before rallying to trade above 23800 this morning. I will now raise my buy level to 22900/23250 with a 22755 tight stop. The Dow has strong resistance from 24350/24600 where I will be an aggressive seller with a 24765 stop.
June NASDAQ
After the NASDAQ traded lower to my 8120 buy level I stupidly covered this position too early at 8150. The NASDAQ was the strongest of the US Indices yesterday, closing over 1% higher. Overnight the NASDAQ rallied further, hitting my 8470 sell level. I am still short and I will add to this position at 8610 with the same 8720 stop. I will now raise my T/P level on this position to 8690. If any of the above levels are hit I will be back with a new update for my Platinum Members.
June BUND
The BUND traded in a narrow range on Thursday before opening more or less unchanged this morning. The Bund has short-term support from 169.80/170.25 where I will be a buyer with a 169.35 stop.
Gold Rolling Contract
Since Gold made its low on March 16, at 1452 we have rallied $260 to sit at 1720 this morning. Optimism towards Gold is near all-time highs. I have been on the sidelines in Gold for the past three weeks. Gold has resistance from 1742/1758 where I will be a small seller with a 1771 stop.
Silver Rolling Contract
The ratio of Gold-to-Silver reached historic extremes last month. Despite Silver rallying over 30% in the last few weeks the ratio is still near record levels. I am still flat Silver and today I will raise my sell level to 16.20/16.70 with a 17.25 stop. If I am taken short I will have a T/P level at 15.80.
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