U.S. Equity Markets rebounded yesterday, finishing the day higher, despite a late sell-off into the Close. The NASDAQ 100 led the rally ending the day with a gain of 1.51%. The S&P made a new all-time high before a late sell-off saw the rally cut to a gain of 0.37%. Federal Reserve Bank Governor Randal Quarles said he is optimistic about domestic economic growth, but the central bank will remain patient with its “above target” inflation. This continued the recent optimistic commentary from other Fed presidents. President Joe Biden is set to reveal the details for a $2 trillion infrastructure plan. Reports suggest that there will be investments in roads, broadband access, and the electric grid. But the administration said it would pay for the deal by raising taxes for over 15 years with a corporate tax increase from 21% to 28%. Jobs data were positive. ADP employment change data came in above expectations, meaning that private companies added more jobs than expected in March. This is another strong sign for the labour market’s recovery. We will look for more confirmation of this trend with the Non-Farm Payroll data released tomorrow despite Markets closed for the Good Friday Holiday. European Markets closed lower after the French Government announced a new four- week lockdown from Saturday. OPEC’s Joint Technical Committee decreased its oil demand outlook for 2021, suggesting demand could be depressed in April through June. The German government suspended the use of AstraZeneca’s COVID-19 vaccine in people under 60 due to concerns about blood clots. The European Union’s number of COVID-19 vaccinations rose to 71.4 million on Tuesday, with a daily average of 1.67 million doses administered over the past seven days. Elsewhere, Oil closed 2% lower after OPEC revised its 2021 demand outlook lower, while Gold rebounded 1.35% following a small sell-off in the U.S Dollar.
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The S&P 500 closed 0.35% higher at a price of 3972.
The Dow Jones Industrial Average closed 85 points lower for a 0.26% loss at a price of 32,981.
The NASDAQ 100 closed 1.51% higher at a price of 13,091.
The Stoxx Europe 600 Index closed 0.4% lower.
Yesterday, the MSCI Asia Pacific Index fell 0.4%.
Yesterday, the Nikkei closed 0.86% lower at a price of 29,178.
The Bloomberg Dollar Spot Index closed 0.3% lower.
The Euro closed 0.2% higher at $1.1726.
The British Pound closed 0.4% higher at $1.3779.
The Japanese Yen closed 0.4% lower at 110.71 per dollar.
Germany’s 10-year yield closed one basis points higher at -0.29%.
Britain’s 10-year yield closed three basis points higher at 0.85%.
US 10 Year Treasury closed two basis points higher at 1.74%.
West Texas Intermediate crude closed 2% lower at $59.85 a barrel.
Gold closed 1.35% higher at $1,707.80 an ounce.
This morning on the Economic Front we have German Retail Sales at 6.00 am. This is followed by German, Euro-Zone and UK Markit Manufacturing PMI at 8.55 am, 9.00 am and 9.30 am respectively. At 1.30 pm we have U.S Weekly Jobless Claims and Manufacturing PMI at 2.45 PM. Finally, we have ISM Manufacturing and Construction Spending at 3.00 pm.
June S&P 500
The S&P followed the NASDAQ higher, to hit a new all-time high and in the process see my initial 3982 sell level executed. A late sell-off in the Dow saw the S&P hit my 3971 T/P level and I am now flat. Today will be tricky especially as Cash Markets are closed tomorrow for Easter. However, the NFP data will be released at 1.30 pm and the lack of liquidity could see volatile trading tomorrow in the Futures Contracts. The Markets’ upward momentum is waning as pointed out by me over the past few weeks. I expect both volatility to increase and a sell-off in April as valuations are still at extreme levels. Today, I will be a small seller in the S&P from 3990/4005 with a 4018 ‘’Closing Stop’’. I am not going to chase the S&P higher and will leave my 3915/3930 buy level unchanged with the same 3904 ‘’Closing Stop’’.
Quarter one saw the U.S Dollar have its best Quarter in 18 months. Once stocks do finally fall, I expect the Dollar to gather further strength. Yesterday the Euro rallied to my 1.1745 T/P level on my latest 1.1720 long position and I am now flat. The Euro has support from 1.1670/1.1710 where I will be a buyer with the same 1.1645 stop. If I am taken long I will have a T/P level at 1.1745.
June Dollar Index
I am still flat and ahead of the Easter Break, I will now lower my buy level to 92.30/92.70 with a lower 91.95 stop.
The DAX traded in a narrow range yesterday and I am still flat. I will continue to be a small buyer on any dip lower to 14750/14820 with the same 14695 stop. I still do not want to be short the DAX at this time.
The FTSE continues to trade heavy and I am still flat. Ahead of the long week-end I will now lower my buy level to 6550/6610 with a wider 6495 stop. If I am taken long I will have a T/P level at 6645.
Dow Rolling Contract
The Dow did not confirm yesterday’s new all-time high in the S&P with the market again selling off into the close after trading in a narrow range. I will now lower my Dow buy level to 32610/32780 with a lower 32495 wider ‘’Closing Stop’’. Despite the Dow selling off into the close yesterday for the second consecutive trading session, I will not chase the market lower and I will leave my 33340/33500 sell range unchanged with the same 33625 ‘’Closing Stop’’.
The NASDAQ never came close to yesterday’s buy level before rallying to its 50 Day Moving Average (13179) Subsequently the market fell 100 points into the close. I will now raise my buy level to 12780/12880 with a higher 12695 ‘’Closing Stop’’. I still do not want to be short the NASDAQ at this time.
I am still flat. I will stay this way with the Bund closed tomorrow and Monday. As a result I do not want to get caught with a position over the Easter Holidays.
Gold Rolling Contract
Gold rallied $25 yesterday and I am still flat. Gold’s 11.5% decline to start the year, is the worse start since 1982. Everyone I know is long Gold. I am still flat and my only interest in buying the market is still on a dip lower to 1648/1663 with the same 1639 stop. If I am taken long I will have a T/P level at 1675.
Silver Rolling Contract
My latest 24.05 long position worked well with the market finally rallying to my 24.25 T/P level and I am still flat. Today, I will again be a buyer on any dip lower to 23.10/23.70 with a lower 22.55 stop.