Equity Markets surged the most in almost two weeks after the reported death tolls in some of the world’s Coronavirus hot spots showed signs of easing. The Japanese Yen weakened and Treasuries fell. The benchmark S&P 500 Index surged late in the trading session to finish up 7%, closing at the highest level since March 13. New York Governor Andrew Cuomo said earlier that deaths were showing signs of hitting a plateau in the State that has become the epicentre of the U.S. outbreak. Italy had the lowest number of new Coronavirus infections in nearly three weeks and France reported a continued levelling-off of cases, helping to send European and Asian shares higher. The number of deaths in the U.S. is still expected to peak on April 16, though the cumulative number of Americans likely to die from Covid-19 was revised downward to 82,000, from an estimate of 94,000 less than a week ago. But its apex, 3,130 Americans will die per day, up from the previous estimate of 2,644. The Pound weakened after British Prime Minister Boris Johnson was taken into a hospital intensive care unit for treatment for Coronavirus after his condition worsened. The mostly upbeat tone in markets followed another negative week, and the mood among investors remains divided. Bulls are pointing to more attractive valuations, unprecedented stimulus and now slowing death rates in several major countries. Bears are fretting the continued spread of the disease, dismal economic data and the rising corporate costs of the pandemic and subsequent shutdown. In Asia, Japan’s benchmark ended almost 4% higher even as that country moved closer to declaring a state of emergency. The Japanese Yen dropped as haven demand receded. Shares in Hong Kong rose while Shanghai was closed for a holiday. Elsewhere, Crude Oil fell on signals that a glut is growing at America’s key oil storage hub, offsetting earlier support from signs that Saudi Arabia and Russia are making progress toward a supply-curb agreement.
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For anyone following my Platinum Service it lost 120 points yesterday and is now ahead by 1123 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 Index increased 7%, closing at a price of 2664.
The Dow Jones Industrial Average closed 7.7% higher at 22,680.
The Stoxx Europe 600 Index increased 4.5%%.
The MSCI Asia Pacific Index increased 4.7%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index declined 0.1% to 1,268.
The Euro closed 0.1% lower at $1.0798.
The British Pound fell 0.2% to $1.2242.
The Japanese Yen decreased 0.5% to 109.12 per dollar.
Bonds
The yield on 10-year Treasuries rose six basis points to 0.67%.
Germany’s 10-year yield increased one basis point to -0.43%.
Britain’s 10-year yield increased three basis points to 0.34%.
Commodities
Gold advanced 2.8% to $1,665.80 an ounce.
West Texas Intermediate crude declined 7.3% to $2626 a barrel.
This morning on the Economic Front we already had the release of German February Industrial Production which rose 0.3% versus -0.8% expected. At 9.30 am we have UK Halifax Nationwide House Prices. Finally, at 3.00 pm we have U.S. JOLTS Job Openings.
June S&P 500
At 8.15 pm I was comfortable with my 2620 short S&P position. A few minutes later the marked spiked to my 2635 second sell level before in the blink of an eye I was stopped out of this position at 2652 and I am now flat. While I have been calling for a rally to the 2700 area in the S&P, The late fake sell-off on Friday night caught me and I expected some of Friday’s 2485 Chicago closing Gap to be filled which it was not and yet again we have another large ‘’Open Gap’’ left unfilled as the Fed do everything in their power, shy of buying the stock market, to stop the U.S from crashing into a depression. Unless we control the Coronavirus properly and wait to re-open businesses then this virus will come back quickly. The 2720 level in the S&P for the Futures and 2735 in the Cash is critical. The amount of bullishness coming from Wall street and elsewhere is palpable. And not surprising, Bear markets do not end on good news. We either just witnessed the FASTEST Bear Market in history (-38% in 27 trading days) or the Bulls are about to get slaughtered with another massive decline coming up as happened in both 2000 and 2008, History is pointing to a slaughter. The US Indices are making a series of lower highs, despite the big rallies. I am watching Oil closely as it did not rally with the same intensity as stocks yesterday. It is possible the Phase 2 of this unfolding stock market rallies to a rebound high of 2770/2810 before the dreaded Phase 3 begins. Today I will be a seller from 2720/2735 with a tight 2747 stop. The S&P has initial support from 2600/2630 where I will be a strong buyer with a 2585 stop.
EUR/USD
I am still flat the Euro as I continue to be a seller on any rally higher to 1.0930/1.0990 with a 1.1045 stop. The Euro has initial support from 1.0610/1.0670 where I will be a buyer with a 1.0555 stop.
June Dollar Index
This morning the Dollar has sold off to my 100.10 buy level. I am still long and I will now lower my T/P level on this position to 100.50. I will also raise my stop on this position to 99.55.
June DAX
I keep emphasising the importance of my updated emails. Yesterday when the DAX had a small sell-off after falling just shy of my initial 10095 sell level, I emailed my Platinum Members to cancel their sell level in the DAX and I am still flat. The DAX is now trading 450 points higher at 10540 as the market finally broke out of its 9200/10100 trading range which has held for most of the past three weeks. Today I will be a small buyer on any dip lower to 10100/10250 with a 9995 wider stop.
June FTSE
Thankfully we had no sell level in the FTSE yesterday and I am still flat. The FTSE has strong resistance from 5830/5930 where I will be a seller with a 6005 tight stop.
Dow Rolling Contract
As I was already short both the S&P and NASDAQ, I waited to sell the Dow which I did at the top of my sell range at 22700. Subsequently I emailed my Platinum Members late in the session to raise their T/P level to 22450. Thankfully this was filled overnight as the Dow traded to a low of 22415 before surging about 23200 this morning. Again, this proves how important my updated emails are especially given the volatility. Despite the Dow closing 1600 points higher the VIX fell 3.3% to a still very high 45.54. Internally the rally was strong with the McClellan Oscillator closing at +105 last night. The Dow has a massive ‘’Open Gap’’ from March 13 (23185/23891). There is every chance that this Gap will be filled before Phase 2 ends. Today I will be a small seller from 23520/23750 with a 23905 stop. The Dow has strong support from 22450/22600 where I will be a buyer with a 22225 stop.
June NASDAQ
My NASDAQ plan did not work well as after I went short at an average rate of 8060 I was stopped out of this position in the last few minutes at 8180 and I am now flat. The NASDAQ has strong resistance from 8280/8350 where I will be a seller with a 8425 tight stop. I still do not want to be long the NASDAQ at this time.
June BUND
I am still flat the Bund which is selling off this morning on the back of the firmer equity markets. I will now lower my buy level slightly to 170.00/170.60 with a 169.55 lower stop.
Gold Rolling Contract
No Change as I am staying on the sidelines until normal price action returns.
Silver Rolling Contract
Silver has now rallied over 30% off last month’s 11.62 seven year low. Silver has strong resistance from 15.90/16.30 where I will be a seller with a 16.75 stop. My only interest in buying Silver is still from 13.75/14.15 with the same 13.45 stop.
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