Technology shares pushed U.S. stocks to records in a week expected to be dominated by the start of earnings season and the signing of a partial China trade deal. Apple, Tesla and Microsoft sent the S&P 500 and Nasdaq Composite Index to closing all-time highs. Gains extended after the U.S. was said to plan to lift its designation of China as a currency manipulator. Earnings from some of the biggest U.S. banks kick off the season Tuesday, amid forecasts that overall corporate profits will show the smallest growth in three years. The Pound led declines among Group-of-10 currencies after another Bank of England official pointed to a potential vote for a U.K. interest-rate cut this month and data showed the economy unexpectedly shrank. Germany’s benchmark Bund Yield had its least negative closing level since May. The offshore Yuan strengthened past 6.9 per dollar for the first time since July. The US Dollar edged higher and Treasuries fell across the curve as the completion of the first trade deal nears; President Donald Trump has said the U.S. and China will sign the accord on Wednesday. The U.S. in August first formally labelled China a currency-manipulator, a move that further escalated the trade war with Beijing after the country’s central bank allowed the yuan to fall in retaliation to new U.S. tariffs. Elsewhere, Equities fell in Europe and advanced in all major Asian markets except Japan, where there was a holiday, and Australia. Oil fluctuated after last week posting its steepest loss since July.
To mark my 1975th 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 50 points yesterday and now ahead by 912 points for January, having made 818 points in December, 780 points in November, 1649 points in October, 1620 points in September, 2387 points in August, 1153 points in July, 1346 points in June,1722 points in May, 955 points in April and 1027 points in March. 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 advanced 0.7% to close at a new all-time high of 3288.
The Dow Jones Industrial Average advanced 0.3%, closing at 28,905.
The NASDAQ Composite advanced 1% to 9274, the highest on record after its largest climb in more than one week.
The Stoxx Europe 600 Index fell 0.2%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index closed unchanged.
The British Pound dropped 0.5% to close at $1.2994, after its fifth consecutive decline.
The Euro rose 0.1% at $1.1137.
The Japanese Yen depreciated 0.4% to 109.94 per dollar.
Bonds
The yield on 10-year Treasuries climbed two basis points to 1.84%.
Britain’s 10-year yield fell two basis points to 0.75%.
Germany’s 10-year yield increased four basis points to -0.16%, the highest in more than eight months.
Commodities
West Texas Intermediate crude dropped 1.6% to $58.07 a barrel.
Gold rose depreciated 0.9% at $1,549 an ounce.
This morning on the Economic Front we have a speech from ECB Member Mersch at 8.30 am. This is followed at 11.00 am by the U.S. NFIB Business Optimism Index. At 1.30 pm we have CPI. Finally, at 2.00 pm we have a speech from Fed Member Evans.
March S&P 500
Late in the New York session I emailed my Platinum Members to raise their sell level in the S&P to 3294/3304 as I was already short the NASDAQ. I will leave my sell level unchanged with a now higher 3313 stop. Just as I go to press the S&P has hit my 3295 sell level. I will now raise my T/P level on this position to 3289. Both the NASDAQ and S&P closed at new all-time highs while the Dow remains below Friday’s 29,009 high so for now we have a small negative divergence between the main Indices. Sentiment remains at extreme levels meaning a reversal can occur at any time. If I am stopped out of this short position I will continue to be an aggressive seller from 3320/3340 with the same 3355 wider stop. I will also raise my buy level to 3260/3272 with a higher 3251 stop.
EUR/USD
I am still flat the Euro which closed 0.1% higher. The rise in Bund Yields tells me that it is only a matter of time before we see a higher Euro and therefore a weaker Dollar. Today I will raise my buy level to 1.1075/1.1115 with a higher 1.1040 stop.
March Dollar Index
No Change as I am still a seller from 97.30/97.70 with the same 98.05 stop.
March DAX
In contrast to the US Indices, European Equities closed lower yesterday. Weaker than expected UK GDP did not help. I am still flat the DAX which just missed my sell level. Today I will lower my sell range to 13560/13630 with a lower 13675 stop. I still do not want to be long the DAX at this time.
March FTSE
No Change as I continue to be a small seller from 7585/7625 with the same 7665 stop.
Dow Rolling Contract
With earnings season upon today we may see a pick – up in volatility. The biggest American financial institutions kick off earnings season, including JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co., Bank of America Corp., Goldman Sachs Group Inc., Morgan Stanley and BlackRock Inc. I am still flat the Dow and even though the Dow underperformed the other major Indices I will now raise my sell level to 29080/29230 with a higher 29305 stop. I will also raise my buy level to 28550/28700 with a higher 28445 stop.
March NASDAQ
The NASDAQ traded the whole of yesterday’s sell range for a now 9060 average short position. The rally over the past week in the NASDAQ shows the market well out if front of the Dow. This is similar to 2000 when the Dow topped in January while the NASDAQ waited until March to put in its top above 5000 before the market fell nearly 80%. Technology stocks are on a tear at the moment, which is a key component of the NDX. I will leave my stop unchanged at 9130 while I will now raise my T/P level on this position to 9040. If any of the above levels are hit I will be back with a new update for my Platinum Members.
March BUND
I was stopped out of my latest 171.25 long position at 170.75 and I am now flat. Yesterday the Bund closest at its lowest level in eight months. I am going to stay flat the Bund today as I do not have an edge in the Bund at this time.
Gold Rolling Contract
Gold continues to subdivide lower. This is no surprise as the Weekly Commitment of Traders Report shows large speculators are net- long 357,496 Futures and Options Contracts. This is just shy of the number of long contracts held at the September 2019 high. As I am now long Silver I will lower my buy level to 1518/1528 with a 1509 stop. If I am taken long I will have a T/P level at 1534.
Silver Rolling Contract
Overnight Silver traded lower to my 17.75 buy level. I am still long and I will now lower my T/P level on this position to 17.95. I will also look to add to this long position on any further move lower to 17.20 with a lower 16.85 stop.
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