U.S. Equity Markets rebounded for most of the day, but finished Friday weak, after their sell-off over the previous few days. Economic data was mixed. Retail Sales rose by more than expected, in a positive note for consumer spending. That is the fifth straight month of retail sales growth after sales plummeted 15% in April. Consumer Confidence also rose above estimates as people turn more optimistic on the economy in the year ahead. But Industrial Production unexpectedly fell in September. On the vaccine front, Pfizer said that it should have data on its Coronavirus vaccine candidate’s effectiveness by the end of this month. Pfizer added that it could have enough safety data to apply for emergency use authorisation (“EUA”) in the U.S. by late November. The Dow led the rally closing 0.4% higher while the NASDAQ 100 finished with a decline of 0.39%. Meanwhile European Indices closed higher as German Chancellor Angela Merkel said the European Union and Britain have made some headway on post-Brexit trade negotiations and an agreement was in everyone’s best interest. British Foreign Secretary Dominic Rabb said a trade deal with the EU is still possible. But Prime Minister Boris Johnson warned that the U.K. must still prepare for a no-deal Brexit. European Central Bank President Christine Lagarde said the central bank stands ready to support the European economy if it deteriorates further. The International Monetary Fund said cooperation and rapid deployment of a COVID-19 vaccine could add $9 trillion to the global economy by 2025. Elsewhere, Oil closed 0.54% lower after OPEC raised concerns that a COVID-19 second wave could cause a supply glut.
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The S&P 500 closed 0.02% higher at a price of 3483.
The Dow Jones Industrial Average closed 112 points higher for a 0.39% gain at a price of 28,606.
The NASDAQ 100 closed 0.39% lower at a price of 11,852.
The Stoxx Europe 600 Index closed 1.2% higher.
The MSCI Asia Pacific Index rose 0.2%%.
This morning the Nikkei closed 1.11% higher at a price of 23,671.
The Bloomberg Dollar Spot Index closed unchanged.
The Euro closed 0.1% higher at $1.1720.
The British Pound closed 0.2% higher at $1.2924.
The Japanese Yen closed 0.1% lower at 105.40 per dollar.
The yield on 10-year Treasuries closed three basis points higher at 0.76%.
Germany’s 10-year yield closed one basis point lower at -0.63%.
Britain’s 10-year yield closed one basis point lower at 0.17%.
The Bloomberg Commodity Index closed 0.3% lower.
West Texas Intermediate closed 0.54% lower at $40.57 a barrel.
Gold closed 0.29% lower at $1896 an ounce.
This morning on the Economic Front we have a speech from ECB Member De Guindos at 8.15 am. This is followed at 10.00 am by Euro-Zone Construction Output and a speech from ECB’s Mersch at 12.30 pm. Next, we have the NAHB Housing Market Index at 3.00 pm. It is a busy day for Fed speakers with Powell, Williams and Clarida speaking at 1.00 pm, 2.00 pm and 6.45 pm respectively, while ECB President Lagarde speaks at 1.45 pm.
December S&P 500
Plenty of two-way price action on Friday with the S&P just missing my initial 3512 sell level before selling off to a low of 3464 and I am still flat. Hopes of a vaccine approval by the end of November has the S&P trading higher at 3485 this morning. I am not going to chase the S&P lower and I will continue to be a small seller from 3512/3527 with the same 3541 stop. I will now raise my buy level to 3455/3470 with a higher 3443 stop.
My latest 1.1700 long Euro position worked well with the market trading higher to my 1.1730 T/P level and I am now flat. This morning I will be a buyer from 1.1650/1.1690 with a lower 1.1615 stop. The Euro has resistance from 1.1795/1.1835 where I will be a seller with a 1.1881 stop.
December Dollar Index
No Change as I m still a buyer on any dip lower to 93.00/93.40 with the same 92.79 tight stop.
The DAX reversed most of Thursday’s loss again emphasing why a ‘’Closing Stop’’ works better after I was stopped out of my long position at 12595. This morning the DAX is trading higher at 12900. We have resistance from 12995/13075 where I will be a small seller with a 13145 tight stop. My only interest in buying the DAX is from 12600/12700 with a 12530 stop.
I am still flat as the FTSE just missed my initial 5820 buy level. I will now raise my buy level to 5790/5840 with a 5745 stop.
Dow Rolling Contract
I am still flat as the Dow opened higher on Friday and never came close to my buy range . Today I will raise my buy level to 28330/28480 with a 28225 stop. I will continue to be an aggressive buyer any move lower to 27700/27900 with the same 27595 stop. I still do not want to be short the Dow at this time.
My NASDAQ plan worked well with the market trading higher to my 12000 sell level before selling off to my 11925 T/P level and I am still flat. Today, I will again be a small seller from 12030/12130 with a 12205 stop. I am not going to chase the NASDAQ higher and I will leave my 11680/11760 buy range unchanged with the same 11595 stop.
I am still flat the Bund as the market continues to trade at near record lows in Yield terms at -63 basis points. The Bund has strong resistance from 176.30/176.80 where I will be a seller with a 177.15 stop.
Gold Rolling Contract
I am still flat and I will now raise my buy level to 1868/1880 with a 1859 stop.
Silver Rolling Contract
Silver closed 2% higher on Friday and I am still flat. Silver has strong support from 23.60/24.20 and I will now raise my buy level to this support zone with a higher 23.15 tight stop.