U.S Equity Markets ended the week in positive territory on optimism surrounding stimulus negotiations. The White House said it remained open to negotiating a larger Stimulus Bill as Treasury Secretary Steven Mnuchin and Speaker of the House Nancy Pelosi (D-CA) continued discussions. Later in the day, President Donald Trump said he would be in favour of a $1.8 trillion stimulus package, $200 billion more than Senate Republicans had previously proposed. Otherwise, it was a relatively quiet day for markets. Eyes are now turning to this week, when the big banks kick off earnings season. The NASDAQ 100 led the rally, closing 1.51% higher. European Markets also closed higher. British Chancellor of the Exchequer Rishi Sunak was reportedly readying a new furlough scheme to protect workers that have been laid off. The European Medicines Agency said it was unlikely a Coronavirus vaccine would be approved before the end of the year. Spain’s Prime Minister was said to be preparing to enforce a state of emergency in the city of Madrid, as it battles rising Coronavirus cases. Saudi Arabia was said to consider requesting that OPEC rethink plans to boost oil output. Elsewhere, Oil fell 1.6% as OPEC raised concerns over lower crude demand, while Gold consolidated it’s recent break over $1900, closing 2.03% higher.
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The S&P 500 closed 0.88% higher at a price of 3477.
The Dow Jones Industrial Average closed 161 points higher for a 0.57% gain at a price of 28,586.
The NASDAQ 100 closed 1.51% higher at a price of 11,725.
The Stoxx Europe 600 Index closed 0.5% higher.
The MSCI Asia Pacific Index rose 0.5%%.
This morning the Nikkei closed 0.26% lower at a price of 23,558.
The Bloomberg Dollar Spot Index closed 0.4% lower.
The Euro closed 0.7% higher at $1.1830.
The British Pound closed 0.6% higher at $1.3030.
The Japanese Yen closed 0.4% higher at 105.47 per dollar.
The yield on 10-year Treasuries closed one basis point higher at 0.78%.
Germany’s 10-year yield closed one basis point lower at -0.54%.
Britain’s 10-year yield closed two basis points lower at 0.27%.
The Bloomberg Commodity Index closed 0.3% higher.
West Texas Intermediate closed 1.6% lower at $40.08 a barrel.
Gold closed 2.03% higher at $1924 an ounce.
This morning on the Economic Front we already had the release of German Wholesale Price Index which printed 0.0% versus -0.4% expected. This morning, the ECB’s Schnabel and President Lagarde are speaking at 9.45 am and 12.00 pm respectively. Although the U.S Credit Markets are closed for the Columbus Day Holiday, the Stock Market is open with normal trading hours. Finally, UK Governor Bailey speaks at 5.00 pm.
December S&P 500
Last Friday the S&P left it’s third consecutive ‘’Open Gap’’ (3436/3447 in the December Contract) and is now severely overbought. I cannot remember the last time that this has happened while this morning the Futures are again higher, indicating another ‘’open Gap’’. Thankfully, we had no sell level on Friday and are still flat the S&P. We have strong resistance from 3490/3510 where I will be an aggressive seller with a wider 3525 stop. I will now raise my buy level to 3430/3445 with a 3419 stop.
Late Friday, the Euro rallied to my 1.1830 initial sell level before opening lower last night and I covered this position at my 1.1813 revised T/P level and I am now flat. I will now raise my buy level in the Euro to 1.1730/1.1770 with a 1.1685 stop. We have resistance from 1.1870/1.1910 where I will be a seller with a 1.1945 stop.
December Dollar Index
The Dollar sold off after I posted on Friday and I am now long at a price of 93.10. I will add to this trade on any further dip to 92.70 with a now lower 92.35 stop. I will have a lower T/P level at 93.40 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
The DAX did close above the key 13000 resistance level on Friday and is now on a ‘’buy signal’’. The DAX is trading at 13080 as I go to press. The 12940/13010 area should act as strong support and I will be a buyer in this zone with a 12865 stop.
With Cable trading over $1.30 it is difficult to see the FTSE rallying further despite all the talk of UK Interest Rates going negative. This morning the FTSE is trading at 5989 as I go to press. I will now raise my buy level slightly to 5880/5930 with a higher 5835 stop. Despite my concerns about the FTSE I still do not want to be short the market at this time.
Dow Rolling Contract
The Dow is now trading 1000 points higher from where I marked prices this time last Monday. The Dow is overbought and overvalued and due a correction. We have strong resistance from 28820/29020 where I will be a seller with a wider 29250 stop. I will now raise my buy level slightly to 28150/28350 with a higher 27985 stop.
Last night the NASDAQ opened in my sell range from Friday and I am now short at a price of 11735. I will add to this trade at 11835 with the same 11905 stop. I will have a T/P level at 11650 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
The boring sideways action in the Bund continues and I am still flat. The Bund has now closed over the key 174 pivot point for the last two weeks. As a result. I will be a small buyer on any dip lower to 174.05/174.45 with a 173.75 tight stop. I no longer want to be short the Bund at this time.
Gold Rolling Contract
The weakness in the Dollar saw Gold consolidate its recent break above 1900, trading at 1936 as I go to press. Gold has short-term support from 1897/1910 and I will now raise my buy level to this area with an 1885 stop.
Silver Rolling Contract
Silver never came close to my 23.85 buy level on Friday as the market rallied hard to sit at 25.25 this morning. We have short-term support from 24.30/24.80 where I will be a buyer with a 23.85 stop.