U.S. Equity Futures Markets got slammed yesterday morning before rallying throughout the day, finishing the day mixed with the S&P closing lower by 0.39% while the Dow closed 0.19% lower after rallying almost 900 points off it’s morning low. The new strain of COVID-19 found in the U.K. got most of the headlines. The news sparked fears of rising cases, which would likely bring more lockdown measures, hurting the economy’s recovery. But the fears may be overblown. In an interview with CNBC, former FDA chief Dr. Scott Gottlieb said he feels the mutation will not slip past. Another reason for the selling was the agreement on a stimulus package. Markets had been rallying on optimism that a deal would be finalised, so this is a “sell the news” event. This removes a catalyst from markets in the near term. Treasury Secretary Steven Mnuchin gave more details on the bill this overnight, saying that stimulus cheques could make it to people as soon as next week. At 5.30 am Congress finally passed a long-awaited $900 bn Coronavirus package after months of wrangling. Earlier the Bill was passed by the House of Representatives and now will go to President Trump to be signed off into law. European Markets closed lower, led by the DAX which at one stage was off by over 4%. British government officials said significant differences remain with the European Union in trade negotiations, as talks continue ahead of the deadline by the end of the year. There were reports that British Prime Minister Boris Johnson was making a last-minute push to reach an agreement. British travellers faced bans from other nations which sought to prevent the spread of a new strain of Coronavirus that has developed in the country. Italian Finance Minister Roberto Gualtieri said the country needs to continue running a budget deficit in order to spur growth. Russia and Saudi Arabia met over the weekend to discuss oil prices, saying OPEC will keep working to balance oil markets until 2022. Late in the European trading session, the European Medicines Agency (“EMA”) said that Pfizer and BioNTech’s Coronavirus vaccine candidate was safe and effective at preventing COVID-19. Elsewhere, Oil closed 2.67% lower on reports that Russia was in favour of a 500,000 barrel per day output increase in February, while Gold fell 0.40% on Dollar strength.
To mark my 2200th 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 60 points yesterday and is now ahead by 1785 points for December, having finished November with a gain of 2025 points, 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 0.39% lower at a price of 3694.
The Dow Jones Industrial Average closed 55 points lower for a 0.19% loss at a price of 30,122.
The NASDAQ 100 closed 0.38% lower at a price of 12,690.
The Stoxx Europe 600 Index closed 0.8% lower.
The MSCI Asia Pacific Index fell 0.8%.
This morning the Nikkei closed 1.04% lower at a price of 26,436.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% higher.
The Euro closed 0.2% lower at $1.2228.
The British Pound fell 0.8% to close at $1.3398.
The Japanese Yen closed unchanged at 103.35 per dollar.
Bonds
Germany’s 10-year yield closed two basis points lower at -0.59%.
Britain’s 10-year yield closed three basis points lower at 0.21%.
US 10 Year Treasury closed three basis points lower at 0.91%.
Commodities
West Texas Intermediate crude closed 2.67% lower at $46.74 a barrel.
Gold closed 0.40% lower at $1,873.10 an ounce.
This morning on the Economic Front we already had the release of Final UK Q3 GDP which rose 16% and the German GFK Consumer Confidence which fell 7.3% versus -7.6% expected. At 1.30 pm we have U.S GDP and Personal Expenditure. Finally, at 3.00 pm we have Existing Home Sales and the Richmond Fed Manufacturing Index.
March S&P 500
On hour after I posted yesterday morning the S&P traded to an intra-day low of 3596 which was 128 Handles below Sunday’s Futures Open of 3724, before spending the rest of the session reversing most of these losses, closing just 0.39% lower at a price of 3686. I know these moves get be gut- wrenching but it is the ‘’Closing Price’’ which matters. Unfortunately, after I bought the S&P at an average rate of 3663 I was stopped out of this position at 3645. I tried to buy the S&P again in the afternoon at 3615 but the low was 3628 before we had the dramatic move higher into the close and I am still flat. As long as the S&P does not break and close below 3640 I am still happy to be a buyer on dips. Volatility surged yesterday with the VIX trading over 30% higher at one stage before finally settling higher by 16.64% at a price of 25.16. The 50 -Day Moving Average for the VIX is just above yesterday’s close at 25.77. A break and close over 26 will see the 200 Day MA at 31.68 likely to be tested. Any break and close above 32 will see a dramatic fall in the U.S Indices. Internally the market continues to struggle as shown by the McClellan Oscillator which closed with a negative 68 print last night. Today, I will be a buyer from 3638/3655 with a 3623 tight stop. The S&P has resistance from 3708/3721 where I will be a seller with a 3735 ‘’Closing Stop’’.
EUR/USD
My Euro plan worked well with the market trading lower to my 1.2135 buy level before rallying to my 1.2175 T/P level. Just before the close the Euro rebound continued, hitting my 1.2250 sell level before selling off this morning to my 1.2215 T/P level and I am now flat. The 1.2080/1.2130 area is key support for the Euro. Today, I will be an aggressive buyer on any dip to this area with a 1.2045 tight stop. The Euro has short-term resistance from 1.2290/1.2340 where I will be a seller with a wider 1.2405 stop.
March Dollar Index
Lat yesterday the Dollar traded lower to my 90.10 buy level. I am still long and I will add to this trade at 89.70 with the same 89.35 stop. I will now lower my T/P level on this position to 90.45 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
March DAX
Not having a ‘’Closing Stop’’ in the DAX proved costly yesterday. After the DAX traded lower to my 13250 buy level I was stopped out of this position at a price of 13165. Subsequently the DAX fell another 100 points before rallying 300 points on the EMA approval of the Coronavirus vaccine and I am still flat. This morning the DAX is trading at 13360 as I go to press. We have resistance from 13480/13550 where I will be a small seller with a 13625 stop. My only interest in buying the DAX is from 13080/13160 with a 12995 stop.
March FTSE
After the FTSE traded the whole of my buy range for a 6325 average long position I emailed my Platinum Members to say that I had exited this long position at my 6350 revised T/P level and I am still flat. With Sterling rallying on the hopes of a Brexit Agreement the FTSE is struggling, trading unchanged at 6350 as I go to press despite the aggressive rally in the DAX and U.S Indices. The FTSE has support rom 6270/6320 where I will be a buyer with a 6225 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
Incredible volatility in the Dow with the market falling over 1000 points from Sunday’s 30425 opening price. After the Dow bottomed at 29410 we spent the rest of the session trading higher and I am still flat. Today, I will leave my 30380/30580 sell level unchanged with the same 30750 ‘’Closing Stop’’. I still do not want to be long the Dow at this time.
March NASDAQ
My NASDAQ plan worked well with the market trading the whole of my buy range for a 12570 average long position (low 10474) before turning around and trade higher to my 12630 T/P level and I am still flat. Today, I will be a buyer from 12520/12610 with a wider 12395 stop. The NASDAQ has resistance from 12795/12875 where I will be a seller with a 12955 stop.
March BUND
I am still flat the Bund as the market fell shy of my sell level by 10 points. I will now lower my sell level to 178.35/178.85 with a lower 179.21 stop.
Gold Rolling Contract
Gold is trading lower at 1865 this morning and I am still flat. Gold has support from 1830/1845 where I will be a small buyer with an 1819 stop.
Silver Rolling Contract
My Silver plan worked well with the market selling off to my 25.10 buy level before rallying to my 25.55 T/P level and I am now flat. Today, I will be a buyer from 24.70/25.30 with a tight 24.35 stop.
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