U.S Equity Markets rebounded after three straight days of sharp sell-offs. There were no clear drivers, though Senate Republicans unveiled a $650 billion Coronavirus Stimulus Bill that will be funded with $350 billion not spent in the earlier Coronavirus package. In another sign of strong housing demand, MBA purchase applications rose to a near three-month high. Vaccine headlines were mixed. On the positive side, Pfizer’s CEO reiterated that its Coronavirus-vaccine trial, which is being jointly developed with BioNTech, remains on track to submit data for regulatory approval by the end of October. But AstraZeneca and Oxford University placed their COVID-19 vaccine late-stage clinical trial on hold after a serious adverse reaction in the U.K. Ahead of the RCB Meeting this morning European Indices surged. German Finance Minister Olaf Scholz said the government will need to borrow a significant amount of money in 2021 to fund stimulus efforts. Euro-Zone Finance Ministers are said to be preparing to pledge lasting fiscal support for the economy during a meeting in Berlin tomorrow. British Prime Minister Boris Johnson will ban public gatherings of more than six people, down from the current limit of 30, to try and contain a resurgence in Coronavirus infections. Elsewhere, Oil rebounded 3.37% after hitting a three-month low on Tuesday, while Gold closed 0.67% higher on hopes of more Global Stimulus.
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The S&P 500 closed 2.02% higher at a price of 3399.
The Dow Jones Industrial Average closed 438 points higher for a 1.6% gain at a price of 27,940.
The NASDAQ 100 closed 2.72% higher at a price of 11,395.
The Stoxx Europe 600 Index gained 1.9%.
The MSCI Asia Pacific Index rose 0.8%.
This morning the Nikkei closed 0.9% higher at 23,235.
The Bloomberg Dollar Spot Index again closed 0.2% lower.
The Euro closed 0.1% higher at $1.1808.
The British Pound closed 0.3% higher at $1.3000.
The Japanese Yen closed 0.2% lower at 106.10 per dollar.
The yield on 10-year Treasuries closed three basis points higher at 0.70%.
Germany’s 10-year yield closed four basis points higher at -0.46%.
Britain’s 10-year yield closed six basis points higher at 0.25%.
The Bloomberg Commodity Index rose 1.1%.
West Texas Intermediate closed 3.37% higher at $37.95 a barrel.
Gold closed 0.7% higher at unchanged at $1,943.10 an ounce.
This afternoon on the Economic Front we have the ECB Rate Decision at 12.45 pm and this is followed at 1.30 pm by the Lagarde Press Conference. At the same time we have U.S Weekly Jobless Claims and PPI. Finally, at 3.00 pm we have Wholesale Inventories.
September S&P 500
As expected, we saw a huge rally of the 3306 50 Day Moving Average following three days of aggressive selling. The S&P traded the whole of yesterday’s sell range for a 3410 average sell level before trading lower to my revised 3404 T/P level with an overnight low so far at 3384. This move higher came within two Handles of closing last Friday’s ‘’Open Gap’’. Ahead of the ECB Meeting and Lagarde Press Conference I would expect markets to be quiet. The S&P has strong resistance from 3412/3427 where I will again be a seller with a 3441 stop. If I am stopped out of this position I will be an aggressive seller from 3485/3502 with a 3521 stop. I will now raise my buy level to 3340/3355 with a 3328 stop.
I am still flat the Euro. As I expect more verbal intervention from ECB President Lagarde at this afternoon’s press conference I will leave my 1.1660/1.1710 buy level unchanged with the same 1.1615 stop. I will also leave my 1.1875/1.1925 sell range unchanged with the same 1.1961 tight stop.
December Dollar Index
I have now rolled to the December Contract which trades at a 15 point Discount to the September Contract. The December Dollar has support from 92.30/92.80 where I will be a buyer with a 91.85 stop.
Thankfully we had no sell level in the DAX yesterday as the market surged on the hope of more stimulus. What would we do without stimulus as Global Central Banks will do everything in their power to keep these false markets from falling. The DAX hit a morning high so far at 13307, 350 points higher from where I marked prices yesterday morning. The DAX has resistance from 13390/13490 where I will be a small seller with a 13555 stop. I will now raise my buy level to 13000/13080 with a 12925 stop.
The FTSE had a long overdue rally and I am still flat. The FTSE is still oversold and today I will raise my buy level to 5880/5930 with a higher 5825 stop.
Dow Rolling Contract
The Dow rallied over 1000 points off yesterday’s morning’s low to hit a rebound high at 28209. Yet again the 50 Day Moving Average proves to act as strong support on a first test. I am still flat. The Dow has initial resistance from 28130/28300 where I will be a small seller with a 28435 stop. I will now raise my buy level higher to 27500/27700 with a 27350 stop.
The NASDAQ also rebounded off its 50 Day MA to close with a gain of 2.72% yesterday. I am still flat. The NASDAQ has support from 11100/11280 where I will be a buyer with a 10985 stop. We have resistance from 11610/11750 where I will be a seller with a 11845 stop.
The BUND hit my buy range yesterday and I am still long at a price of 173.75. I will now lower my T/P level on this position to 173.95 while raising my stop on this position to 173.15.
Gold Rolling Contract
Gold continues to build value above 1900. I am still flat and I will now raise my buy level to 1900/1915 with a higher 1888 stop.
Silver Rolling Contract
No Change as I am still a buyer on any dip lower to 25.40/25.90 with a higher 24.75 stop. If I am taken long I will have a T/P level at 26.45.