U.S. Equity Markets were mixed as investors digested Stimulus headlines, but finished lower after a volatile trading session. White House Chief of Staff Mark Meadows said he is hopeful the GOP and Democrats can reach a Stimulus Agreement by this weekend. But Senate Democrats said they have enough votes to block a $500 billion “skinny” Coronavirus package. And Senate Majority Leader Mitch McConnell urged the White House to hold off on reaching a deal with Democrats until after the November election. House Speaker Nancy Pelosi later said something similar, saying that negotiations are continuing to pass a stimulus package after the election. Earnings were also a theme today, with 16% of S&P 500 companies now having reported. More than 85% of companies have beaten estimates, above the five-year average of 73%. There was vaccine news late in the day, after Bloomberg reported that COVID-19 vaccine trials from AstraZeneca and Johnson & Johnson will be restarting this week. But a volunteer in the AstraZeneca trial in Brazil passed away, raising concerns. The Dow ended yesterday’s session with a loss of 0.35%. European Indices also closed lower. European Central Bank President Christine Lagarde said the recent Coronavirus resurgence is an economic risk, implying the central bank is considering additional stimulus measures. European Union chief Brexit negotiator Michel Barnier said the bloc must consider Britain’s sovereignty and that a trade deal was within reach. European Commission Vice President Valdis Dombrovskis said the EU was ready to provide more aid if a “second wave” of COVID-19 cases hurts the economy. British Prime Minister Boris Johnson enacted strict Coronavirus measures in the city of Manchester. Elsewhere, Oil fell 4% as rising gasoline inventories sparked fears of a decline in future crude demand, while Gold finished 0.6% higher on Dollar weakness.
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The S&P 500 closed 0.22% lower at a price of 3435.
The Dow Jones Industrial Average closed 98 points lower for a 0.35% loss at a price of 28,210.
The NASDAQ 100 closed 0.11% lower at a price of 11,665.
The Stoxx Europe 600 Index closed 0.5% lower.
The MSCI Asia Pacific Index fell 0.2%%.
This morning the Nikkei closed 0.70% lower at a price of 23,474.
The Bloomberg Dollar Spot Index closed 0.2% lower.
The Euro closed 0.3% higher at $1.1865.
The British Pound closed 1.1% higher at $1.3107.
The Japanese Yen closed 0.7% higher at 104.72 per dollar.
The yield on 10-year Treasuries closed one basis point lower at 0.81%.
Germany’s 10-year yield closed one basis point higher at -0.58%.
Britain’s 10-year yield closed four basis points higher at 0.23%.
The Bloomberg Commodity Index closed 0.3% lower.
West Texas Intermediate closed 4% lower at $39.08 a barrel.
Gold closed 0.6% higher at $1915 an ounce.
This morning on the Economic Front we already had the release of German GFK Consumer Confidence which fell 3.1% versus -3.0% expected. At 12.00 pm we have the UK CBI Industrial Trends Survey. This is followed at 1.30 pm by the U.S Weekly Jobless Claims. At 3.00 pm we have Existing Home Sales and Euro-Zone Consumer Confidence. Finally, at 4.00 pm we have the Kansas City Fed Manufacturing Activity Index.
December S&P 500
The S&P fell shy of my initial 3462 sell level with a 3457 high print before selling off overnight to my 3409 buy level. I emailed my Platinum Members to exit any long position at 3418 and I am now flat. As long as the S&P continues to trade below the now key resistance from 3450/3465, I will be a seller of rallies. The 50 -Day Moving Average has now risen to 3395 for the December Contract and this is key as a break and close below here opens up the possibility of a test of the trendline going back to the March lows at 3330. A break and close below 3330 will be a strong sell signal. Today I will be a small buyer from 3385/3398 with a 3373 stop. I will now lower my sell level to 3448/3460 with a tight 3471 stop.
No Change as I am still a buyer on any dip lower to 1.1780/1.1820 with the same 1.1735 stop. I still do not want to be short the Euro at this time.
December Dollar Index
The Dollar traded in a narrow range yesterday and I am still flat. My buy level remains unchanged from 91.80/92.30 with the same 91.45 stop. I will now raise my sell level to 93.30/93.80 with a higher 94.25 stop.
My DAX plan worked well with the market trading lower to my 12590 buy level before rallying to my 12644 revised T/P level and I am now flat. This morning Germany has reported a record 11,287 new Coronavirus cases and this has hit the DAX hard, trading at 12375 as I go to press. The next support level for the DAX is from 11210/11290 where I will be a buyer with a 11145 stop. Ahead of tonight’s Presidential Debate, I do not want to be short the DAX .
My FTSE plan did not work well. I bought the market at an average rate of 5770 before being stopped out of this position at 5695 overnight. Subsequently I bought the FTSE again this morning at 5725. I will add to this trade at 5655 with a 5615 tight stop. I will have a T/P level at 5765 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Frustratingly, the Dow just missed my initial 28520 sell level by a few points before selling off to trade at 28070 as I go to press. I will continue to be an aggressive buyer from 27700/27880 with the same 27595 stop. My only interest in selling the Dow is from 28410/28610 with a 28735 stop.
I had the correct view in selling the NASDAQ at 11770 as the market sold off to trade at 11600 this morning. Unfortunately, I covered this position at my 11750 revised T/P level and I am still flat. Today, I will be a seller from 11740/11840 with a 11925 stop. Meanwhile I will leave my 11300/11400 aggressive buy level unchanged with the same 11195 stop.
Just like the Dollar above, the Bund also traded in a narrow range and I am still flat. I will now raise my sell level slightly to 176.10/176.60 with a higher 177.05 stop. I will also raise my buy level to 174.60/175.10 with a 174.15 tight stop.
Gold Rolling Contract
I am not going to chase Gold higher and I will leave my 1878/1892 buy level unchanged with the same 1865 stop.
Silver Rolling Contract
I am still flat and I will now lower my buy level to 23.80/24.40 with a lower 23.35 stop. If I am taken long I will have a T/P level at 24.75.