U.S. Equity Markets finished the day mixed, despite President Trump being impeached for ‘’inciting’’ last week’s Capitol riot in an historic second charge. Both the S&P and NASDAQ 100 closed higher while the Dow was flat after a quiet trading session. Optimism continued to build around the spending/stimulus package President-elect Joe Biden is slated to roll out this afternoon. Senator Kristen Gillibrand said her party is preparing a large Coronavirus-aid package and expect it to be passed within weeks of President-elect Joe Biden’s inauguration. Expectations are the legislation will be in the $3 trillion to $4 trillion range. That should translate to domestic economic momentum. That came as Federal Reserve Board of Governors member Lael Brainard said monetary support for the economy is not about to change. She stated she anticipates Asset Purchases will remain in place for some time, quelling speculation of the central bank tapering bond purchases sooner than later. In addition, the number of domestic Coronavirus vaccinations continues to rise. The total increased to 9.94 million through yesterday versus roughly 3 million at year’s end. A late rally saw European Indices close higher. They started off in negative territory on concerns Italy’s Governing Coalition may fall apart. That could force another contentious election cycle for the current pro-European government. But the mood quickly changed. Regional economic data showed signs of an economy that is holding up despite Coronavirus social-distancing restrictions. Industrial Production data for November increased 2.5% versus the expectation for 0.2%. It was also better than last month’s 2.3%. In addition, European Central Bank President Christine Lagarde said the regional economy should rebound in the second half of this year as the vaccine rollout gets underway. Already 3.4 million individuals have been inoculated… not bad for a programme that started a little over 10 days ago. Elsewhere, Oil closed 0.56% lower as an increase in gasoline inventories led to speculation of falling oil demand in the coming weeks, while Bitcoin rose 4.68%, after the ECB’s Lagarde called for more regulation, which should improve more widespread adoption of the cryptocurrency.
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The S&P 500 closed 0.23% higher at a price of 3810.
The Dow Jones Industrial Average closed 8 points lower for a 0.03% loss at a price of 31060.
The NASDAQ 100 closed 0.63% higher at a price of 12974.
The Stoxx Europe 600 Index closed 0.3% higher.
The MSCI Asia Pacific Index rose 0.2%.
This morning the Nikkei is closed 0.85% higher at a price of 28,698.
The Bloomberg Dollar Spot Index closed 0.3% higher.
The Euro closed 0.4% lower at $1.2158.
The British Pound closed 0.2% lower at $1.3625.
The Japanese Yen closed 0.3% lower at 104.02 per dollar.
Germany’s 10-year yield closed five basis points lower at -0.53%.
Britain’s 10-year yield closed four basis points lower at 0.31%.
US 10 Year Treasury closed one basis points lower at 1.10%.
West Texas Intermediate crude closed 0.56% lower at $51.98 a barrel.
Gold closed 0.22% higher at $1,860.20 an ounce.
This morning on the Economic Front we have German GDP at 9.00 am. This is followed at 12.30 pm by the Minutes of last month’s ECB Meeting. At 1.30 pm we have Weekly Jobless Claims and the Import/Export Price Index. Finally we have speeches from Fed Members Rosengren, Bostic, Chairman Powell and Kaplan at 2.40 pm, 4.00 pm, 5.30 pm and 6.00 pm respectively.
March S&P 500
Day traders continue to ‘’buy the dip’’ as mentioned in yesterday’s commentary. My S&P plan worked well with the market again trading lower to my 3780 buy level before rallying to my 3792 T/P level and I am now flat. The S&P is trading higher this morning at 3810 as we wait for President Elect Biden’s latest Stimulus plan this afternoon. This announcement comes with US Indices at valuations that are near record levels. The S&P has strong resistance from 3828/3843 where I will be an aggressive seller with a now lower 3855 ‘’Closing Stop’’. I will continue to be a buyer on any dip lower to 3772/3787 with a 3759 stop.
After the Euro traded lower to my 1.2155 buy level I emailed my Platinum Members to exit any long position at 1.2175 and I am now flat. Today I will be a small buyer from 1.2060/1.2100 with a 1.2025 stop. I will now lower my sell level to 1.2230/1.2270 with a lower and tight 1.2305 stop.
March Dollar Index
My latest 89.90 long Dollar position worked well with the market trading higher to my 90.15 T/P level and I am now flat. Today, I will be a buyer from 89.60/90.05 with a tight 89.15 stop. I still do not want to be short the Dollar at this time.
I am still flat the DAX as the market traded in a narrow range during yesterday’s session. I will now raise my buy level slightly to 13760/13840 while leaving my stop unchanged at 13695.
The FTSE continues to struggle. Shortly after I posted the market rallied to my 6720 T/P level on my 6710 average long position and I am still flat. Today, I will be a small buyer from 6630/6670 with a 6585 stop. If I am taken long I will have a T/P level at 6710.
Dow Rolling Contract
No Change. I am still an aggressive buyer from 30550/30780 with the same 30325 wider ‘’Closing Stop’’. I will continue to look to sell the Dow on any further rally to 31340/31520 with the same 31635 tight stop.
My NASDAQ plan worked well with the market trading lower to my 12840 buy level before rallying to my 12900 T/P level and I am now flat. Today, I will again be a small buyer from 12760/12840 with the same 12695 stop. If stopped I will be an aggressive buyer from 12475/12375 with a 12295 ‘’Closing Stop’’.
Frustratingly the Bund just missed my 176.65 buy level before rallying to sit at 177.40 this morning. I will now raise my buy level to 176.40/176.90 with a 175.95 stop. I still do not want to be short the Bund at this time.
Gold Rolling Contract
Overnight, Gold traded lower to my 1825 buy level before having a small rally and I have now exited this long position here at 1833 and I am now flat. The 1800/1815 is key support for Gold and I will be an aggressive buyer in this area with a 1789 stop.
Silver Rolling Contract
Silver is not as soft as Gold and I am still flat. I will now lower my buy level to 24.10/24.70 with a lower 23.65 stop.