U.S. Equities rebounded from the worst week in six months as investors speculated efforts to contain the coronavirus will minimize lasting damage to the American economy. Commodities remained under pressure, with copper dropping a 14th straight day and oil sliding below $50 a barrel. The S&P 500 Index advanced as China added stimulus in an effort to shore up its economy and American manufacturing data topped estimates. It’s still down more than 2% since the virus scare started almost two weeks ago, and ended the session well off highs. Tech shares led the advance, while energy and industrial companies slumped. The risk-on mood in U.S. equities didn’t spread across assets. Treasuries suffered only modest declines, oil plunged and Copper Futures dropped again in London. Stocks in Shanghai — which hadn’t traded since holidays began Jan. 23 — tumbled the most since 2015 as the nation’s economy remained virtually shut down because of the virus. The spread of the cornoavirus kept investors on edge Monday after American equities had the worst week since August on concern economic growth will falter as the virus spreads. U.S. health officials said they were preparing as if the outbreak would be a pandemic. The People’s Bank of China cut rates as it injected cash into the financial system yesterday, part of a slew of measures to shore up their financial markets. Still, the economic toll is becoming clearer, with Beijing reportedly evaluating whether its growth target this year should be softened. A manufacturing reading in the U.S. topped estimates.
To mark my 2000th 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 made 95 points yesterday on the first trading session for February having made 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
In company news, Tesla Inc. surged 20% after a battery unit reported a quarterly profit and the shares got an upgrade. Sysco Corp. sank after delivering disappointing results. Alphabet lost 5%, after reporting results.
The S&P 500 Index increased 0.7% to close at 3249.
The Nasdaq 100 Index gained 1.5%, closing near all-time highs at 9126
The Dow Jones Industrial Average rose 0.5%, to close at 28400.
The Stoxx Europe 600 Index advanced 0.3%.
The MSCI Emerging Market Index lost 0.1%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index advanced 0.3%.
The Euro declined 0.3% to $1.1058.
The Japanese Yen fell 0.3% to 108.67 per dollar.
The offshore Yuan weakened 0.2% to 7.0147 per dollar.
Bonds
The yield on 10-year Treasuries gained one basis point to 1.52%.
The two-year rate rose four basis points to 1.355%.
Germany’s 10-year yield fell one basis point to -0.44%.
Commodities
West Texas Intermediate crude fell 3% to $49.99 a barrel.
Gold Futures weakened 0.4% to $1,581 an ounce.
CMX Copper Futures fell 0.4%.
This morning on the Economic Front we have UK Markit Construction PMI at 9.30 am and this is followed at 10.00 am by Euro-Zone PPI. A 2.45 pm we have ISM New York Business Conditions Index. Finally, at 3.00 pm we have Factory Orders.
March S&P 500
Having tested its 50 Day Moving Average shortly before last Friday’s close normal service resumed yesterday with the S&P closing 0.7% higher. This morning after a rebound overnight in the Chines Equity Markets the S&P is now trading 23 Handles higher at 3272. There is no doubt that the Central Banks will do everything in their power to keep the Equity Party going. On Friday the US Market generated a third Hindenburg Omen and yesterday we closed with a fourth H.O. We now have three concurrent H.O. potential stock market crash signals on the clock. From my experience when a H.O is generated the market tends to rally first before selling off. The fact that the S&P is back above 3250 is positive and if we can build on this rally by close of business this evening then we will see some monies put to work. Today I will move my buy level higher to 3240/3252 with a 3231 stop. The S&P has resistance at last Thursday’s high at 3295 and I will be a small seller from 3292/3305 with a tight 3314 stop.
EUR/USD
I am still flat the Euro which traded in a narrow range yesterday. I will now lower my sell level to 1.1090/1.1130 with a 1.1165 stop. I will also lower my buy level to 1.0970/1.1010 with a 1.0930 stop.
March Dollar Index
This morning the Dollar has traded higher to my 97.78 sell level. I am still short and I will now lower my stop on this position to 98.12. I will also raise my T/P level to 97.40 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
March DAX
When the DAX re-opened this morning at 7.00 am we were trading just above the middle of yesterday’s sell-range at 13135. I went short here and I emailed my Platinum Members to exit and short position at 13110 and I am now flat. The DAX has strong resistance from 13205/13265 and I will be a seller in this area with a 13315 stop. I still do not want to be long the market at this time.
March FTSE
Having led the Equity Markets lower last week the FTSE has reversed course and is leading the markets higher after impressive gains since I posted yesterday morning. This rally is helped by the fact that Cable is trading below 1.30 at 1.2940. It was frustrating to get stopped out of Friday’s 7280 long position at 7215 when you see the market trading at 7335 this morning. Today I will raise my buy level to 7225/7275 with a 7180 stop.
Dow Rolling Contract
My Dow plan worked very well with the market trading higher to my 28610 sell level before falling 250 points. Unfortunately I covered this short position way too early at 28570 and I am still flat. This morning the Dow is back trading at 28610. We have small resistance from 28790/28930 and I will be a small seller in this area with a 29045 stop.
March NASDAQ
It is as if Friday’s 200 point fall never happened in the NASDAQ with the market rallying to close 1.5% higher. This morning the NASDAQ is back to Friday’s level at 9190 as I go to press. The break and close over 9100 is bullish and today I will now raise my buy level to 9100/9140 with a 9055 tight stop. If I am taken long I will have a T/P level at 9180.
March BUND
Shortly after I posted yesterday morning the Bund traded lower to my 174.80 T/P level on my latest 175.10 short position and I am now flat. The Bund has resistance from 175.00/175.40 and I will be a small seller in this area with a 175.75 stop.
Gold Rolling Contract
No Change as my only interest in buying Gold is still on a dip lower to 1545/1557 with the same 1537 stop.
Silver Rolling Contract
No Change as I am still a buyer from 17.10/17.50 with the same 16.70 stop.
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