U.S. Equity Markets took a breather yesterday, finishing the day mixed. The Dow closed 0.9% higher while the NASDAQ 100 continued Monday’s reversal, closing lower by 1.74%. After Monday’s positive vaccine news, focus shifted to how Pfizer and BioNTech would distribute the vaccine and how soon the general public could get the shot. But there are still COVID-19 concerns… The Federal Reserve warned the country could still face a wave of defaults, and asset prices could weaken should Consumer Sentiment and the economy begin to weaken. Federal Reserve Bank of Dallas President Robert Kaplan also expressed caution on the growth outlook. Kaplan said he anticipates 3.5% economic growth for all of next year. That is slightly below the FOMC’s forecast of 4% growth. He added that growth in the Fourth Quarter of 2020 could be hurt by rising COVID-19 cases. Economic data were positive after Job Openings data showed that businesses are still looking to hire and that layoffs are slowing. This is a good sign for the labour market’s recovery. Meanwhile, European Indices gained. The European Union said it would impose $4 billion worth of tariffs on U.S. imports but was hopeful the trade relationship would improve under President-elect Joe Biden. German Health Minister Jens Spahn said he expected the country to sign an agreement with Pfizer and BioNTech to purchase doses of a COVID-19 vaccine “in the coming days.” French Finance Minister Bruno Le Maire said the government is ready to increase spending to support businesses as it deals with a second lockdown. Oil rallied on speculation the approval of a COVID-19 vaccine will usher in a return to “normal,” supporting demand and prices, closing higher by 2.65%, while Gold closed 0.95% higher after Monday’s sharp $100 sell-off.
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Equities
The S&P 500 closed 0.14% lower at a price of 3545.
The Dow Jones Industrial Average closed 262 points higher for a 0.90% gain at a price of 29,420.
The NASDAQ 100 closed 1.74% lower at a price of 11,624.
The Stoxx Europe 600 Index closed 0.4% higher.
The MSCI Asia Pacific Index rose 0.4%.
Yesterday, the Nikkei closed 0.26% higher at a price of 24,905.
Currencies
The Bloomberg Dollar Spot Index closed unchanged.
The Euro closed 0.1% lower at $1.1808.
The British Pound closed 0.8% higher at $1.3257.
The Japanese Yen closed unchanged at 105.32 per dollar.
Bonds
The yield on 10-year Treasuries closed four points higher at 0.96%.
Germany’s 10-year yield closed four basis points higher at -0.48%.
Britain’s 10-year yield closed three basis points higher at 0.40%.
Commodities
The Bloomberg Commodity Index closed 0.8% higher.
West Texas Intermediate closed 7.89% higher at $41.19 a barrel.
Gold closed 0.95% higher at $1876 an ounce.
This morning on the Economic Front we have very little data on either side of the Atlantic. U.S Banks are closed for Veterans Day while the Stock Market is open with normal trading hours. The ECB’s Lagarde, De Guindos and Lane are speaking this afternoon at 2.00 pm, 2.30 pm and 5.00 pm respectively.
December S&P 500
My S&P plan worked very well with the market trading lower to my 3515 buy level before rallying to my 3542 aggressive T/P level, thus making up for Monday’s large loss on the vaccine announcement. I am still flat. The S&P has strong support from 3498/3518 where I will continue to be an aggressive buyer with a tight 3484 stop. I still do not want to be short the S&P at this time.
EUR/USD
I am still long the Euro at price of 1.1820 with a now lower 1.1855 T/P level. The move higher in US Bond Yields is Dollar supportive. I will continue to add to this position at 1.1770 with the same 1.1745 stop.
December Dollar Index
No Change as I am still a buyer from 92.00/92.40 with the same 91.55 stop.
December DAX
My DAX plan worked well with the market trading higher to my 13200 sell level before selling off to my revised 13148 T/P level and I am now flat. The DAX has further resistance from 13330/13410 where I will be a small seller with a 13505 stop. I still do not want to be long the DAX at this time.
December FTSE
The FTSE traded the whole of my sell range for a now 6210 average short position. News that the UK will roll out a vaccine next month through the NHS saw the FTSE supported all day, despite the move higher in Sterling. I will leave my stop unchanged at 6305 with a now higher T/P level at 6195.
Dow Rolling Contract
The Dow was the strongest of the main US Indices again yesterday as we saw continued rotation out of Technology. I am still flat the Dow. The market has strong support from 28850/29050 where I will be an aggressive buyer with a 28675 stop. I will now raise my sell level to 29780/29950 with a higher 30105 stop.
December NASDAQ
My NASDAQ plan worked well with the market trading lower to my 11590 buy level before rallying above 11700. I used this move higher to exit my long position at my revised 11638 T/P level and I am now flat. Today I will again be a buyer from 11420/11520 with a 11295 wider stop. If I am taken long I will have a T/P level at 11605.
December BUND
The BUND never came close to my buy level as prices got slammed again yesterday, now 250 points lower from Monday’s high. The Bund has small support from 172.70/173.30 where I will be a small buyer with a 172.25 stop. If I am taken long I will have a T/P level at 173.65.
Gold Rolling Contract
Gold rallied yesterday which is no surprise given the fact that we had fallen a hefty $100 on Monday. I am still flat and today I will continue to be a buyer from 1832/1847 with the same 1819 stop.
Silver Rolling Contract
No Change as I am still a buyer on any dip lower to 22.80/23.40 with the same 22.25 stop. If I am taken long I will have a T/P level at 23.85.
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