U.S. Equity Markets rallied the most since August, while Treasuries plunged as investors speculated the global economy will withstand any impact from the still-spreading coronavirus after China’s market sell-off eased. The S&P 500 pushed its two-day gain to 2.2% and the Nasdaq 100 Index hit an all-time high as investors piled back into risk assets after last week’s rout. European and Emerging-Market shares rallied. Shanghai stocks rebounded from a record $720 billion wipeout. Treasuries tumbled with Gold. Copper in London halted a 14-day slide. Oil bucked the trend, erasing gains that topped 2%. In company news, Tesla Inc. extended its torrid run. President Donald Trump, on the eve of his likely acquittal in the Senate impeachment trial, delivered his third State of the Union address — and added to the drama with a handful of stage-managed surprises. His 78-minute remarks to a Congress never mentioned the word impeachment yet partisanship loomed over his visit on Tuesday to Capitol Hill. Republicans chanted “four more years” after the president was introduced at the podium and a swath of Democratic women were dressed in all white to honour suffragettes. Trump spent the first half hour of the speech lauding his record on the economy, calling it the “best it’s ever been” and pointing to a “blue collar boom” in a sign of how much he will lean on the issue heading into the November election. Without looking their way, Trump criticized the “one hundred thirty-two lawmakers in this room” who “have endorsed legislation to impose a socialist takeover of our health-care system.” He said another 130 Democrats would “bankrupt our nation by providing free taxpayer-funded health care to millions” of undocumented migrants. But Pelosi got the final say. As the president finished his speech, she picked up her copy of his remarks and tore it in half.
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 121 points yesterday and is now ahead by 216 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
Investors appear to be taking some comfort from the measures Beijing has taken to contain the virus to Hubei province and to support economic growth. Still, travel restrictions continue and business shut-downs mount, with Macau closing casinos for another two weeks. Bulls have focused on strong corporate earnings and assurances of support from central banks. Meanwhile, traders are also waiting for the outcome of the Iowa Caucuses, as the 2020 Democratic presidential race kicks off. Problems with the reporting process have delayed the results.
The S&P 500 jumped 1.5% to close at 3297.
The Nasdaq 100 added 2.3% to a record closing high of 9335.
The Dow Industrial Averages closed 408 points higher at 28,007.
The Stoxx Europe 600 Index surged 1.6%.
The MSCI All-Country World Index rose 1.6%.
The MSCI Asia Pacific Index surged 1.4%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index edged lower.
The British Pound gained 0.4% to $1.304.
The Euro dropped 0.2% to $1.1043.
The Japanese Yen weakened 0.7% to 109.50 per dollar.
The offshore Yuan strengthened 0.3% to 6.9944 per dollar.
Bonds
The yield on 10-year Treasuries gained seven basis points to 1.60%.
The two-year yield added six basis points to 1.41%.
Germany’s 10-year yield climbed three basis points to -0.41%.
Commodities
West Texas Intermediate crude fell 0.9% to $49.68 a barrel.
Gold Futures weakened 1.5% to $1,558.20 an ounce.
LME copper surged 2.2% to $5,648 per metric ton.
Arabica coffee surged 1.7% to $1 a pound.
This morning on the Economic Front we have German, Euro-Zone and UK Markit Services PMI at 8.55 am, 9.00 am, and 9.30 am respectively. This is followed at 10.00 am by Euro-Zone Retail Sales. At 12.00 pm we have U.S MBA Mortgage Applications and the ADP Employment Change at 1.15 pm. Next, we have the Trade Balance at 1.30 pm and the Markit Services PMI at 2.45 pm. Finally, at 3.00 pm we have the ISM Non-Manufacturing PMI.
March S&P 500
An incredible rally in the US Indices as in my opinion Central Banks just came in and supported Global Indices over the past two days to prevent the markets from breaking key technical levels. The rally was so strong that the NASDAQ closed at yet another all-time high. Yesterday’s move high saw the S&P trade the whole of my sell range for a 3298 average short position before the market sold off overnight to my revised 3293 T/P level and I am now flat. Both the Dow and S&P remain below their January highs. It is interesting to compare what happened in 2000. Back then the Dow hit their all-time nominal high on January 17, while the NASDAQ continued to make one new high after another before topping on March 31. Subsequently markets crashed for years with the NASDAQ falling over 80% from its March 2000 high. Yesterday’s aggressive move higher in the S&P has left a large ‘’Open Gap’’ from Monday’s 3249 Chicago close to yesterday afternoon’s 3278 low print. However, I have to respect the price action in the S&P which I know did not work last Friday but the fact we have again closed over 3250 is at least short-term bullish. Today I will move my buy level higher to 3265/3280 with a wider 3252 stop.
EUR/USD
The boring sideways action in the Euro continues with little or no movement in this currency pair for most of the last four years. I am still flat and today I will leave my 1.0970/1.1010 buy level unchanged with the same 1.0930 stop. I will still be a seller on any rally higher to 1.1090/1.1130 with a 1.1165 stop.
March Dollar Index
I am still short at 97.78 from Monday with the same 98.12 stop. I will now raise my T/P level on this position to 97.60.
March DAX
With three of my Indices hitting my sell levels within a short space of time I took the following action. After the DAX hit my average 13250 sell level I had enough risk on board by being short both the S&P and Dow and I emailed my platinum Members to exit any short position for a small loss at 13274 and I am still flat. For those of you still short the DAX is thankfully trading lower this morning at 13225 and I would look to exit here and go flat. Today I will be a small buyer from 13090/13150 with a 13045 stop.
March FTSE
I am still flat the FTSE s the market never came close to my buy range. I will now raise my buy level to 7275/7305 with a higher 7240 stop.
Dow Rolling Contract
As I was already short the S&P at two different prices I waited to sell the Dow which I did in small size at a price of 28870. Thankfully the Dow is trading lower this morning and I have now covered this position at my revised 28775 T/P level and I am now flat. The Dow has now risen over 700 points since last Friday’s low with the market now comfortably above its 50 Day Moving Average (28,464). Today I will be a buyer from 28570/28720 with a 28450 wider stop. We still have one outstanding Gap above the market from January 24 at 28990 and if the Dow can break and close above this I would look to move my buy level higher.
March NASDAQ
Incredible bullish action in the NASDAQ with the market closing 2.3% higher yesterday after Monday’s 1.5% rise. Thankfully we had no sell levels in this market yesterday. It is so difficult to be short equity markets for any length of time as shown with the short sellers in Telsa who have lost a lot of money ($6 BILLION) in shorting this stock over the past six weeks. Today I will move my buy level higher to 9170/9230 with a 9125 stop.
March BUND
I am still flat the Bund. I am not going to chase this market lower and I will leave my 175.00/175.40 sell level unchanged with the same 175.75 stop.
Gold Rolling Contract
Gold traded the whole of my buy range before having a small rally overnight to currently trade at 1562. I bought Silver instead of Gold but if you did buy Gold in my buy range then you are sitting on a nice profit this morning. I would take your gain here and go flat. Today I will be a small buyer from 1538/1546 with a 1531 stop.
Silver Rolling Contract
I bought Silver at 17.55 as emailed to my Platinum Members yesterday. I am still long with an unchanged 17.75 T/P level. I will now raise my stop on this trade to 17.10.
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