U.S. Equity Markets traded sideways to higher for most of yesterday’s trading session before selling off into the close, led by the Dow which closed with a loss of 0.94%, while the Small Cap Russell 2000 fell a hefty 3.58%. Equity Markets did not have much direction in morning trade, but sold off into the close. Some of Monday’s vaccine optimism was tempered, after the National Institute for Allergies and Infectious Diseases questioned whether AstraZeneca’s vaccine data were up to date. This is the latest concern regarding that vaccine. Also, on the vaccine front, reports suggested that Johnson & Johnson will not meet its goal of delivering 20 million doses this month, potentially slowing the pace of vaccinations. Housing Market data continued to show a February slump. New Home Sales fell to the lowest level since last summer, as cold weather hampered demand for newly built homes. Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen both gave testimonies to Congress yesterday. Powell reiterated that policy will remain accommodative, and the Fed will give advanced notice before tapering Asset Purchases. He added that the recent stimulus package is unlikely to cause undesirable inflation. Yellen, in her testimony, said that she sees the U.S. achieving full employment again by 2022. European Markets closed lower. European Central Bank Executive Board Member Philip Lane said the Euro-Zone is still facing a difficult second quarter, but added U.S. stimulus would have a spillover effect on the economy. German Chancellor Angela Merkel and the leaders of the country’s 16 states agreed to extend social-distancing restrictions for another four weeks while calling for a strict lockdown over the Easter holiday. The U.K. instituted a ban on international travel, with a £5,000 fine for anyone leaving the country. Elsewhere, Oil fell 6.50% as new lockdowns in Europe sparked demand concerns, while Gold declined 0.65% on Dollar strength.
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For anyone following my Platinum Service it made 95 points yesterday and is now ahead by 2807 points for March, having closed February with an impressive gain of 3286 points, having made 2077 points in January, 2273 points in December, 2025 points in November, 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, and an incredible 9264 points in March. 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 0.76% lower at a price of 3910.
The Dow Jones Industrial Average closed 308 points lower for a 0.94% loss at a price of 32,423.
The NASDAQ 100 closed 0.53% lower at a price of 13,017.
The Stoxx Europe 600 Index closed 0.5% lower.
The MSCI Asia Pacific Index fell 0.8%.
This morning the Nikkei closed 2.04% lower at a price of 28,405.
Currencies
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.6% lower at $1.1865.
The British Pound closed 1.2% lower at $1.3720.
The Japanese Yen closed 0.1% higher at 108.59 per dollar.
Bonds
Germany’s 10-year yield closed three basis points lower at -0.35%.
Britain’s 10-year yield closed six basis points lower at 0.75%.
US 10 Year Treasury closed two basis points lower at 1.64%.
Commodities
West Texas Intermediate crude closed 6.50% lower at $57.84 a barrel.
Gold closed 0.65% lower at $1,727.80 an ounce.
This morning on the Economic Front we already had the release of UK CPI which rose 0.4% versus +0.8% expected. Next, we have German, Euro-Zone and UK Manufacturing PMI at 8.30 am, 9.00 am and 9.30 am respectively. This is followed by U.S MBA Mortgage Applications at 11.00 am and Durable Goods Orders at 12.30 pm. At 1.45 pm we have U.S Manufacturing PMI followed and the second day of Testimony from Fed Chait Powell at 2.00 pm. Finally, we have Euro-Zone Consumer Confidence and a speech from ECB President Lagarde at 3.00 pm and 3.40 pm respectively.
June S&P 500
The S&P just missed my 3940 sell level before falling 50 Handles into the close. This move lower saw my 3895 buy level executed. As I did not want to have a position overnight, I emailed my Platinum Members to exit any long position at 3901 and I am now flat. The S&P continues to hold the key 3867/3882 support area. Today, I will again be a buyer in this area with a wider 3853 ‘’Closing Stop’’ which is just below the 50 Day Moving Average which comes in at 3856. Remember a break and close below the 50 Day MA opens up the possibility of a move lower to 3795/3810 where I will be an aggressive buyer with a 3783 stop.
EUR/USD
The Euro has traded the whole of yesterday’s buy range and I am now long at an average price of 1.1850. I will leave my stop unchanged at 1.1785 while lowering my T/P level to 1.1875. If any of the above levels are hit I will be back with a new update for my Platinum Members.
June Dollar Index
Just before the New York close the Dollar rallied to my 92.30 sell level. I am still short and I will add to this trade on a further move higher to 92.80 while leaving my stop unchanged at a tight 93.05. I will now raise my T/P level to a price of 92.15.
June DAX
The DAX again traded in a narrow range and I am still flat. Despite the increase in Coronavirus cases which has put Germany into a further lockdown for another four weeks, the DAX refuses to trade lower. Today, I will lower my buy level to 14395/14465 with a 14325 stop.
June FTSE
The weakness in Sterling over the past few days has prevented the FTSE from following the U.S Indices lower. The FTSE has strong support from 6510/6560 and I will now lower my buy level to this range with a lower 6465 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The big question was whether the Dow finally put in at least a meaningful top at last Thursday’s 33227 high print, fuelled by analysts and pundits looking for further upside as they tend to extrapolate incredible further multiples on higher expensive stocks. However, as we have seen over the past year, the buy the dip has surfaced anytime there is potential trouble in the market. With multiples at extreme levels it is hard to justify herd buying but traders feel they have the Fed at their back and that they will support the market no matter what the long-term damage may be. Yesterday, the Dow fell over 450 points from its’ post Powell Testimony high of 32810, hitting my 32410 buy level with a 32350 low print before having a small rally into the close. I bought the Dow at 32410 before exiting this position on the close at 32445 and I am now flat. The Dow has support from 32130/32300 where I will again be a buyer with a 30995 ‘’Closing Stop’’. The Dow has further support from 31625/31450 where I will be an aggressive buyer with a 31295 ‘’Closing Stop’’. The 50 Day Moving Average comes in a 31475 and it will take a break and close below here for 48 hours before I will turn bearish.
June NASDAQ
No Change. I am still a buyer on any further dip lower to 12830/12930 with the same 12745 ‘’Closing Stop’’. I still do not want to be short the NASDAQ at this time.
June BUND
Central Bank buying continue to push the Bund higher and Yields lower as the ECB maintains its yield control. It is insane that Bund yields are trading in negative territory but as I have said countless times over the past few months that both Central Banks and Governments cannot afford yields to rise given the amount of Global Debt. Of course, this will end in tears and massive losses but not yet. I am still flat the Bund and I will now raise my buy level to 171.25/171.75 with a higher and tight 170.88 stop.
Gold Rolling Contract
As I am back long Silver, I will now lower my Gold by level to 1699/1712 with a 1689 stop.
Silver Rolling Contract
Late yesterday, Silver traded lower to my 25.10 buy level. I am still long and I will now lower my buy level to 25.35 while raising my stop on this position to 24.59.
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