U.S. Equity Markets declined again on Friday and in the process registering its worst week since March. The S&P closed 1.21% lower while following the weaker than expected earnings from Apple, the NASDAQ 100 led the declines with a loss of 2.62%. COVID-19 trends continued to dominate headlines. American Coronavirus infections hit a new daily high, and the seven-day average of cases also hit the highest level on record. Weak iPhone revenue from Apple (AAPL) weighed on its shares, pulling markets down (as Apple is the largest component in the S&P 500). But Economic data were positive. Consumer Confidence rose in October, with both Current Conditions and Consumer Expectations posting gains compared to September. Chicago PMI rose, marking the third increase in four months. And it hit the highest level since December 2018. Now, all eyes are on this week. Between the Presidential Election tomorrow and another wave of earnings (25% of the S&P 500), there are lots of potential catalysts for markets. European Indices were mixed after a volatile week. Euro-Zone Third-Quarter Gross Domestic Product data were much stronger than expected, indicating the economy is recovering quicker than previously thought. European Central Bank President Christine Lagarde said the bank will expand stimulus in December after warning the region’s economy will slow in the coming months. French Finance Minister Bruno Le Maire said the government was looking to limit the pending downturn in economic output to 15% versus the 30% experienced in the first lockdown. German Chancellor Angela Merkel said the European Union’s leaders must learn from their mistakes, responding quickly enough to stop any future Coronavirus resurgence. Over the weekend UK PM Johnson announced a month-long lockdown from this Thursday. Elsewhere, Oil continued to decline as rising COVID-19 cases dented the global growth picture, closing 1.5% lower, while Gold closed 0.5% higher as ECB president Christine Lagarde signalled more stimulus.
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For anyone following my Platinum Service it made 725 points on Friday to finish October with a gain of 2779 points, having made 3042 points in September, 2383 points in August, 3128 points in July, 2580 points in June, 2456 points in May, 4773 points in April, an incredible 9264 points in March, 2223 points in February and 2142 points in January. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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The S&P 500 closed 1.21% lower at a price of 3270.
The Dow Jones Industrial Average closed 157 points lower for a 0.59% loss at a price of 26,501.
The NASDAQ 100 closed 2.62% lower at a price of 11,052.
The Stoxx Europe 600 Index closed 0.4% lower.
The MSCI Asia Pacific Index fell 0.5%%.
On Friday the Nikkei closed 1.22% lower at a price of 22,977.
The Bloomberg Dollar Spot Index closed 0.1% higher.
The Euro closed 0.3% lower at $1.1645.
The British Pound closed 0.2% higher at $1.2951.
The Japanese Yen closed 0.2% lower at 104.71 per dollar.
The yield on 10-year Treasuries closed five basis points higher at 0.88%.
Germany’s 10-year yield closed unchanged at -0.62%.
Britain’s 10-year yield closed four basis points higher at 0.27%.
The Bloomberg Commodity Index closed 1.2% lower.
West Texas Intermediate closed 1.5% lower at $35.42 a barrel.
Gold closed 0.5% higher at $1878 an ounce.
This morning on the Economic Front we have German, UK, Euro-Zone and U.S Markit Manufacturing PMI at 8.55 am, 9.00 am, 9.30 am and 2.45 pm respectively. Finally, we have Construction Spending and ISM Manufacturing PMI at 3.00 pm.
December S&P 500
Friday turned out to be a volatile trading session with plenty of two-way trading which is no surprise with VIX closing 1% higher at 38.45. My S&P plan worked well with the market trading lower to my 3242 buy level before rallying to my 3269 T/P level. Subsequently I emailed my Platinum Members to buy the S&P again at 3240 before exiting this position too early at 3251 and I am now flat. The S&P saw a strong rally into the close before selling off after the Futures Market opened last night. The S&P is trading at 3250 as I go to press. So far, the September Low of 3206 is holding the market. Today. I will again be a buyer on any dip lower to 3212/3228 with a tight 3199 ‘’Closing Stop’’. I will now lower my sell level slightly to 3308/3325 with a 3341 tight stop.
No Change as I am still a buyer from 1.1580/1.1625 with the same 1.1535 stop. Ahead of tomorrow’s U.S Election I still do not want to be short the Euro at this time.
December Dollar Index
The Dollar traded in a narrow range on Friday and I am still flat. I will continue to be a buyer from 93.20/93.70 with the same 92.85 stop.
My DAX plan worked well with the market trading the whole of my buy range for a 11390 average long position. Subsequently we rallied to my 11495 T/P level and I am now flat. The DAX is severely oversold after falling over 15% in October. With Merkel announcing more stimulus I would expect the DAX to be supported at or near current prices. Today, I will again be a buyer from 11310/11400 with a 11245 stop. If I am taken long I will have a T/P level at 11490.
I have now been stopped out of my 5570 long FTSE position here at 5495 and I am now flat. The FTSE is trading lower at 5485 as I go to press. The market is now severely oversold with strong support from 5380/5450 where I will be an aggressive buyer with a 5325 stop If I am taken long I will have a T/P level at 5520. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Dow Rolling Contract
My Dow plan worked well, as we finally made up for last Wednesday’s drubbing. Shortly after the European Markets opened the Dow traded the whole of my buy range for a 26200 average long position before rallying to my 26475 T/P level and I am still flat. The 200 Day Moving Average (26200) continues to support the market but a break and close below here will be near-term bearish. Today, I will be a buyer from 26030/26230 with a 25975 tight stop. If I am taken long I will have a T/P level at 26415.
I am still flat and I will now lower my sell level to 11250/11400 with a 11525 stop. I still do not want to be long the NASDAQ at this time.
Gold Rolling Contract
Gold fell shy of my 1855 buy level and I am still flat. I will now lower my buy level to 1835/1852 with 1823 stop.
Silver Rolling Contract
I am still flat and I will now raise my buy level to 22.60/23.20 with a 21.95 stop. If I am taken long I will have a T/P level at 23.65.