U.S. Equity Markets rebounded after yesterday’s sell-off, finishing the day positive with the S&P 500 closing higher by 1.2% and the NASDAQ 100 +1.87%. Speaker of the House Nancy Pelosi said the terms of a Coronavirus Stimulus Bill could change if the Democrats were to experience a landslide victory in the upcoming election. This falls in line with Wall Street expectations that a Democratic victory could boost the overall value of a Stimulus package. Economic data were positive. Gross domestic product (“GDP”) grew 33.1% in the Third Quarter, topping estimates and marking a record. And Jobless Claims fell more than expected. Both of these data points are positive signals for the broader economy’s recovery. Now, eyes turn to Last night’s earnings reports, with most of the Big Tech companies releasing their quarterly results. These came in weaker than expected. As a result, the NASDAQ Futures have given up all of yesterday’s gain. European Indices closed lower. The German government said it will limit public gatherings, while shutting down bars, restaurants, gyms, and movie theatres for the next month, to contain the Coronavirus resurgence. The French government introduced new lockdown measures that will last at least one month, banning private gatherings, closing bars and restaurants, but allowing schools to remain open. The European Central Bank left Interest Rates and its Asset Purchase Programme unchanged, as expected. Euro-Zone Economic Confidence data for October came in above estimates, in a signal that individuals are more optimistic about the economic recovery than expected. Late in the day, Germany said it plans to begin distributing a COVID-19 vaccine to citizens before the end of the year. Elsewhere, Oil closed a further 2.65% lower continuing Wednesday’s sell-off, while the US Dollar closed higher by 0.7%.
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The S&P 500 closed 1.2% higher at a price of 3310.
The Dow Jones Industrial Average closed 139 points higher for a 0.52% gain at a price of 26,659.
The NASDAQ 100 closed 1.87% higher at a price of 11,350.
The Stoxx Europe 600 Index closed 0.4% lower.
The MSCI Asia Pacific Index fell 0.5%.
Yesterday the Nikkei closed 0.37% lower at a price of 23,331.
The Bloomberg Dollar Spot Index closed 0.7% higher.
The Euro closed 0.7% lower at $1.1675.
The British Pound closed 0.5% lower at $1.2923.
The Japanese Yen closed 0.2% lower at 104.55 per dollar.
The yield on 10-year Treasuries closed five basis points higher at 0.83%.
Germany’s 10-year yield closed unchanged at -0.62%.
Britain’s 10-year yield closed two basis points higher at 0.23%.
The Bloomberg Commodity Index closed 1.2% lower.
West Texas Intermediate closed 2.65% lower at $36.49 a barrel.
Gold closed 0.2% lower at $1869 an ounce.
This morning on the Economic Front we have German Retail Sales and GDP at 7.00 am. This is followed by Euro-Zone GDP, CPI and Unemployment at 10.00 am. At 12.30 pm we have U.S Personal Income/Spending. Finally, at 2.00 pm we have the University of Michigan Consumer Sentiment Index.
December S&P 500
When you get a reading in the McClellan Oscillator north of -250 you can expect a rally in the S&P and that is exactly what we got yesterday from the afternoon low at 3250 to the rebound high of 3333. This initial move lower saw the market hit my 3260 buy level before rallying to my 3278 T/P level and I am still flat. After the close we saw some weak earnings from Apple as iPhone Sales missed estimates and the S&P is now trading lower at 3269 as I go to press. The rebound high just missed my 3338 sell level and I will now lower my sell range to 3320/3340 with a lower 3353 stop. Today, I will again be a buyer from 3235/3253 with a 3219 stop. If I am taken short I will have a T/P level at 3304. If I am taken long I will have a T/P level at 3269.
My 1.1760 long Euro position was stopped at 1.1695 and I am still flat. I am surprised how weak the Euro is trading. The Euro has support from 1.1580/1.1625 where I will be a buyer with a 1.1535 stop. I still do not want to be short the Euro at this time.
December Dollar Index
The rally in the Dollar saw my 94.05 stop hit on my 93.60 short position and I am still flat. I will now raise my buy level to 93.20/93.70 with a 92.85 stop. If I am taken long I will have a T/P level at 94.15.
My DAX plan worked well with the market trading lower to my 11460 buy level before rallying to my 11560 T/P level and I am now flat. Today I will again be a buyer from 11350/11430 with a 11295 stop.
No Change as I am still long at 5570 with the same 5495 ‘’Closing Stop’’. I will now lower my T/P level to 5615.
Dow Rolling Contract
My Dow plan worked well with the market selling off to my 26380 buy level before rallying to my revised 26550 T/P level and I am still flat. The Dow hit a rebound high at 26890 before selling off to trade at 26500 as I go to press. The 200 Day Moving Average comes in at 26214 and I would expect a decent rally on any initial test of this key support. As a result, I will be an aggressive buyer from 26100/26300 with a 25965 stop.
My NASDAQ plan worked well with the market trading higher to my 11350 sell level before selling off on the Apple news to my 11260 T/P level and I am now flat. Today I will again be a seller from 11350/11480 with the same 11605 stop.
No Change as I am still short at 176.35 with the same 175.95 T/P level. I will leave my stop unchanged at 176.81.
Gold Rolling Contract
I was lucky yesterday as after I posted Gold rallied to my 1884 T/P level on my latest 1872 long position and I am still flat. Gold has key support from 1840/1855 which must hold. I will be a buyer in this area with a tight 1829 stop.
Silver Rolling Contract
Unfortunately, I was stopped out of my 23.35 long position at 22.65 and I am now flat. Today, I will be a buyer from 22.20/22.80 with a lower 21.65 stop.