U.S Indices finished the week on the lows of the Day, as a resurgence in new Coronavirus infections halted the re-opening of the American Economy. The Dow closed 2.8% lower at 25,015, which was the lowest close for the month. Both Texas and Florida announced the closing of bars while after a 7.8% report in new cases in Florida on Saturday, Miami announced the closure of its beeches over the coming 4th July Holiday Weekend. The markets reacted negatively, as fears mounted that States would have to impose more restrictions once again to stop the spread of the Virus, thus hampering the economic rebound. Since the June peak on June 8th, the S&P is down 7% while the Banking Index is down a whopping 20%, with Goldman Sachs the biggest Dow loser on Friday at -8.6%. To make matters worse, the S&P closed below its 200-Day Moving Average. This brings the 50-Day MA into focus at 2968. Volume was heavier than normal due to the re-balancing of the Russell Indexes. European Indices closed higher, helped by a stronger than expected French Consumer Confidence. Meanwhile, Spain’s Government said it would continue supporting businesses by extending its salary support for workers through September. ECB President Christine Lagarde said the Euro-Zone economy has ‘’probably’’ passed its low point unless it experiences a second wave of CODID-19. Elsewhere, Treasuries rose, Gold was flat while Crude Oil closed 1.25% lower.
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The S&P 500 closed 2.42% lower at a price of 3009.
The Dow Jones Industrial Average fell 730 points for a 1.84% fall to close at 25,015.
The NASDAQ 100 closed 2.5% lower at 9849.
Stoxx Europe 600 Index closed with a gain of 0.7%.
The FTSE 100 closed 0.40% higher.
This morning the Nikkei closed 2.30% lower at 21,995.
Here is a summary of the main Changes in F.X. Markets:
The Euro increased 0.1% to $1.1228.
The Japanese Yen closed little changed at $107.21.
The British Pound closed 0.8% lower at 1.2335 per Dollar.
The yield on 10-year Treasuries closed four basis points lower at 0.64%.
Germany’s 10-year yield fell two basis points to -0.48%.
Britain’s 10-year yield fell two basis points to 0.13%.
West Texas Intermediate crude fell 1.4% to $38.17 a barrel.
Gold closed basically unchanged at $1765.
This morning on the Economic Front we have UK Money Supply, Mortgage Approvals, Net Lending to Individuals and Consumer Credit at 9.30 am. This is followed at 10.00 am by Euro-Zone Business Climate and Consumer Confidence. At 10.30 am we have a speech from Bank of England Governor Bailey and this is followed at 1.00 pm by German CPI. Finally, we have U,S. Pending Home Sales at 3.00 pm and the Dallas Fed Manufacturing Business Index at 4.00 pm.
September S&P 500
The S&P plunged for the second time within three trading sessions, on very high volume. While the S&P closed below its 200 Day Moving Average, the 50 Day MA (2968) has held for now. I am not expecting a massive sell-off in the S&P as the Fed will step in to prevent another crash. I still believe that the market is a buy on dips. Given the volatility I am trading in small size. If the market trades lower from here we have support levels at 2950, 2925 and 2880. The S&P has strong resistance at 3045. Building value and settling above this key pivot point is bullish for a move back to Tuesday’s Open Gap at 3119. On Friday my S&P plan did not work well as after the S&P traded the whole of my buy range for a 3035 average long position I was stopped out of this trade at 3015 and I am still flat. Overnight the S&P hit a low of 2984 before rallying to a high so far at 3020 and is currently trading at 3010 as I go to press. Today I will be a small seller from 3042/3055 with a 3065 tight stop. I will be a buyer on any dip lower to 2973/2988 with a 2958 wider stop.
I am still flat the Euro which traded In a narrow range on Friday. Despite the equity sell-off the Euro held the 1.1200 support level. I will now raise my buy level to 1.1180/1.1220 with a higher 1.1135 stop. I will also raise my sell level to 1.1340/1.1390 with a 1.1435 stop.
September Dollar Index
No Change as I am still short at 97.20 with the same 97.75 stop and unchanged 97.10 T/P level. If any of the above levels are hit I will be back with a new update for my Platinum Members.
My DAX plan did not work well as after the market traded the whole Friday’s buy range for a 12080 average long position I was stopped out of this trade this morning at 11975, which is extremely frustrating with the DAX now trading higher at 12120 as I go to press. For me to turn bearish of the DAX we need to break and close below 11850. Given the Euro 130 billion stimulus from the German Government, it is difficult to see a meaningful sell-off in the market and for this reason I will continue to be a buyer on dips. Today my buy level will be from 11820/11940 with a 11735 tight stop.
The FTSE finally entered my buy rage this morning and I have gone long at a price of 6080. I will add to this trade at 6010 with a now lower 5955 stop. I will lower my T/P level on this position to 6140 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Dow Rolling Contract
The Dow plunged 730 points on Friday, following its 710 point loss on Wednesday, with the market so far holding its 50 Day Moving Average which comes in at 24925 this morning. Just like the S&P above I will continue to be a buyer on dips as I believe that the Fed will do whatever it takes to prevent the stock market from crashing again. The Dow has major support from 24600/24350 where I will be an aggressive buyer with a 24165 stop. The Dow has resistance at 25500 and a break and close over this level will see me moving my buy level higher. I still do not want to be short the Dow at this time. On Friday, my Dow plan did not work well as after the market traded the whole of my buy range for a 25320 average long position I was stopped out of this trade at 25035.
The NASDAQ also traded the whole of my buy range for a 9945 average long position. I am still long as we did not close below 9835 on Friday. This morning the NASDAQ is trading at 9860 as I go to press. I will add to this position at 9720 as I look for a move back to 9900/9950 and higher. For now, I will lower my T/P level on my 9945 existing long position to 9980 and if any of the above levels are hit I will be back with an update for my Platinum Members. I will also lower my stop on this position to 9685.
No Change as I am still a seller from 176.95/177.45 with the same 177.85 stop.
Gold Rolling Contract
I am still flat and today I will raise my buy level to 1725/1735 with a higher 1716 stop.
Silver Rolling Contract
Silver just missed my 17.30 buy level on Friday before rallying to trade at 17.80 this morning. I will now raise my buy level to 17.20/17.60 with a higher 16.75 stop.