Stocks slumped after Apple Inc.’s warning that sales will miss forecasts spooked investors who had hoped for a limited economic impact from the deadly Coronavirus that originated in China. Treasuries rose and the US Dollar strengthened. The S&P 500 Index fell from a record as the iPhone maker warned of production and demand disruptions due to the epidemic, while gains for Microsoft Corp., Amazon.com Inc. and Facebook Inc. provided a slight lift to the Nasdaq 100. Apple suppliers including Dialog Semiconductor Plc and AMS AG helped drag down European stocks. HSBC Plc tumbled the most since 2009 after it said it will slash jobs in a restructuring, while also flagging risks from the virus. Government Bonds climbed, while the Euro weakened after a German Investor-Confidence Index plunged. Gold rallied. Investors are still trying to judge the corporate and economic impact from the Coronavirus, even as the growth rate of cases in China’s Hubei province — the epicenter of the disease — continues to stabilize. It’s a turnaround from Monday, when sentiment was lifted by Chinese policy makers’ moves to support companies hit by the prolonged shutdown of large parts of the country. BHP Group said commodity prices will take a hit if the fallout extends beyond the end of next month. Elsewhere, Equity benchmarks in Tokyo, Seoul and Hong Kong saw declines of over 1%. The Australian Dollar weakened after the Reserve Bank of Australia said it reviewed the case for a further rate cut at its last meeting. Emerging-Market stocks and Currencies fell.
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 113 points yesterday and is now ahead by 874 points 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
The S&P 500 Index declined 0.3%, closing at 3370.
The Nasdaq 100 added 0.1% to close at a new all-time high at 9629.
The Dow Jones Industrial Average fell 166 points to close at 29,232.
The Stoxx Europe 600 Index fell 0.4%.
The MSCI Emerging Markets Index decreased 1.2%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index gained 0.2%.
The Euro decreased 0.4% to $1.0794.
The British Pound slipped 0.1% to $1.300.
The Japanese Yen was little changed at 109.86 per dollar.
Bonds
The yield on 10-year Treasuries declined three basis points to 1.55%.
Germany’s 10-year yield fell one basis point to -0.41%.
Britain’s 10-year yield decreased three basis points to 0.61%.
Commodities
West Texas Intermediate crude was little changed at $52.05 a barrel.
Gold strengthened 1.4% to $1,602.96 an ounce.
This morning on the Economic Front we have Euro-Zone Current Account at 9.00 am. This is followed at 9.30 am by UK by Retail Price Index, PPI and CPI. At 12.00 pm we have U.S. MBA Mortgage Applications and this is followed at 1.30 pm by Housing Starts, Building Permits and PPI. Finally, we have the Minutes from last month’s FOMC Meeting at 7.00 pm.
March S&P 500
One of the best lessons that I learned in 35 years of trading whether working in a Bank trading room or for myself is that a market that does not fall on bad news has to respected. Yesterday the world was doom and gloom over Apple and the Coronavirus but here we are this morning with the S&P trading 15 Handles higher from where I marked prices 24 hours ago while the NASDAQ actually closed 0.1% higher on the day. My S&P plan worked well as the market traded lower to my 3355 buy level before rallying to my too tight 3360 T/P level and I am now flat. This morning we are trading at 3379 as the S&P again closes last Friday’s Open Gap. Today I will be a buyer from 3353/3363 with a 3346 tight stop. I will now raise my sell level to 3397/3412 with a higher 3422 stop.
EUR/USD
My latest 1.0860 long position did not work well as awful ZEW Surveys saw the Euro make a new three-year low by stopping me out at 1.0795 and I am now flat. Despite the DSI at 18- month lows I have to respect the price action in the Euro. Today I will lower my sell level to 1.0860/1.0900 with a 1.0945 stop.
March Dollar Index
The Dollar traded higher to my 99.25 sell level. I am still short and I will now raise my T/P level on this position to 99.10 with a now lower 99.65 stop.
March DAX
No matter how weak the German Economy is the DAX continues to trade at or near all-time highs. I am still flat and today I will raise my sell level to 13820/13880 with a higher 13935 stop.
March FTSE
My FTSE plan worked well yesterday with the market rallying to my 7355 T/P level on my 7325 long position. Subsequently I emailed my Platinum Members to buy the DAX again at 7300 before the market rallied a second time to my 7330 T/P level and I am now flat. Given how weak the Pound is trading I will continue to be a buyer on dips and today my buy level is from 7300/7340 with a 7255 stop.
Dow Rolling Contract
The good news was the Dow traded lower to my 29120 buy level before rallying back above 29300 this morning. The bad news was I cut this long position way too early as I was nervous at the time at a price of 29155 and I am still flat. The 29000/29150 area is key support for the Dow as a break and close below could well see an acceleration lower in the market. This Index is the closest to its 50-day Moving Average which comes in at 28723 this morning. Today I will be a buyer in the above support area with a tight 28895 stop. Meanwhile I will leave my 29580/29730 sell level with the same 29815 tight stop.
March NASDAQ
The current Bull Market will celebrate its 11th anniversary next month. We are now in the melt up phase of this incredible rally, similar to what happened in 1999/2000 before we crashed. The NASDAQ which was leading the charge back in the dot-com era continues to lead this melt up phase higher. The question is when will it end? Remember when the Dow topped in January 2000 the NASDAQ waited until March of that year before it made its high. Subsequently the NASDAQ fell an incredible 80%. The Advance/Decline is one of the main indicators that I look at and this chart is saying that for now we have no worries unlike early 2000 when it was flashing a major warning signal. Internally the market is weak with the McClellan Oscillator again closing negative last night with a print of -20. As long as the NASDAQ does close below 9380 I will continue to be a buyer on dips. Today I will raise my buy level to 9530/9590 with a 9485 stop. I still do not want to be short the market at this time.
March BUND
My latest 174.88 short position worked well with the Bund hitting my 174.63 T/P level and I am now flat. Today I will continue to be a seller from 174.85/175.25 with a 175.55 stop.
Gold Rolling Contract
I am surprised by the strength in Gold especially given how strong the Dollar is trading plus the fact that equity markets are at or close to all-time highs. Gold has resistance from 1635/1650 and I will be a small seller in this area with a 1661 stop.
Silver Rolling Contract
Frustratingly Silver just missed 17.72 buy level with a 17.83 low print before rallying to trade at 18.34 this morning. Today I will raise my buy level to 17.80/18.20 with a higher 17.45 tight stop.
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