U.S. Equity Markets surged for the second consecutive trading session as the market continues to build value from Monday’s intra-day low. The NASDAQ 100 led yesterday’s gains, closing higher by 1.21% as the VIX built value below 20, with a fall of 11%. COVID-19 fears eased again. Studies out of South Africa and Scotland indicated that the Omicron variant has a significantly lower chance of putting people in the hospital than the Delta variant. This helped lower concerns that the surge in cases would be a serious problem. The FDA officially approved Pfizer’s COVID-19 treatment pill, giving the U.S. another treatment option against coronavirus cases. These developments allow investors to feel more comfortable putting their money to work in risk assets like stocks. In terms of economic data, Consumer Confidence rose in December as inflation expectations declined from a 13-year high. Existing Home Sales rose to a 10-month high, showing that demand for housing remains strong. Within the S&P 500, all 11 sectors finished higher. European Markets closed higher. European Central Bank Executive Board member Isabel Schnabel called for a gradual removal of stimulus, saying doing so too quickly could hurt the economic recovery. Other headlines were not as positive… France’s National Institute of Statistics and Economic Studies said Producer Price Index numbers for November rose versus October, marking a new high in data going back to 1995. Portugal’s government said it would reimpose social-distancing restrictions beginning Saturday in an attempt to stem the recent increase in coronavirus infections. In Asia, Stimulus was the main tailwind for Asian equities. The People’s Bank of China added $1.6 billion worth of liquidity to the financial system, bringing the total to roughly $5 billion over the last three days. Bank of Japan minutes from the most recent monetary policy meeting showed members felt the trade benefits of a weaker Yen outweighed the inflation risks. Chinese Ambassador to the U.S. Qin Gang said the two countries should seek common ground to get relations back on a healthy and stable track. Elsewhere, Oil rose 2.53% to a one-month high as easing Omicron fears boosted the growth outlook, while Gold closed 0.93% higher on Dollar weakness.
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For anyone following my Platinum Service it lost 410 points yesterday, and is now down 322 points for December, having made 2466 points in November, 1028 points in October, 2866 points in September, 1543 points in August, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, having ended March with an impressive gain of 3769 points, 3286 points in February, 2077 points in January, and 2273 points last December. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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The S&P 500 closed 1.02% higher at a price of 4696.
The Dow Jones Industrial Average closed 261 points higher for a 0.74% gain at a price of 35,753.
The NASDAQ 100 closed 1.21% higher at a price of 16,180.
The Stoxx Europe 600 Index closed 1.1% higher.
This morning, the MSCI Asia Pacific Index rose 0.3%.
This morning, the Nikkei closed 0.83% higher at a price of 28,798.
The Bloomberg Dollar Spot Index closed 0.4% lower.
The Euro closed 0.4% lower at $1.1325.
The British Pound closed 0.9% higher at 1.3354.
The Japanese Yen fell 0.2%, closing at $114.25.
Germany’s 10-year yield closed three basis points higher at -0.28%.
Britain’s 10-year yield closed two basis points higher at 0.89%.
US 10 Year Treasury closed one basis points higher at 1.48%.
West Texas Intermediate crude closed 2.53% higher at $72.91 a barrel.
Gold closed 0.93% higher at $1,800.10 an ounce.
This morning on the Economic Front we already have German CPI at 10.30 am. This is followed by U.S. Weekly Jobless Claims, Durable Goods Orders, and Personal Income/Spending at 1.30 pm. Finally, we have New Home Sales and the Michigan Consumer Sentiment Index at 3.00 pm.
Cash S&P 500
The S&P built value yesterday above the 4650 area by testing the 4700 resistance level into the close. The S&P has now rallied over 170 Handles since Monday’s 4531 low print as yet again the ‘’Buy the Dip’’ has slammed anyone shorting the market. The S&P is now within touching distance of its 4751 all-time high. Internally, yesterday’s rally was strong as shown by the McClellan Oscillator which improved from Tuesday’s -27 print to close last night at +64. Shortly after I posted yesterday morning the S&P made a low of 4631, just missing my 4623 buy level before surging higher. Both my 4665 and 4683 sell levels were executed. I covered my 4683 position at 4675 before getting stopped overnight at 4701 on my initial 4665 short position and I am now flat. The 50 -day Moving held yesterday with the price now moving higher to 4620. I will now raise my buy level to 4618/4633 with a 4599 higher stop. We have resistance from 4730/4748 where I will be a strong seller with a 4763 stop. If I am taken short I will have a T/P level at 4715. If I am taken long I will have a T/P level at 4651.
The Euro continues to find strong support at 1.1250, testing this level a number of times over the past few weeks. I will now raise my buy level to 1.1210/1.1270 with a higher 1.1165 stop. I will not chase the Euro lower, leaving my 1.1405/1.1455 sell level unchanged with the same 1.1501 stop.
March Dollar Index
The Dollar traded lower to my 96.30 T/P level and I am now flat. I am going to stay flat the Dollar over the Holiday Period, preferring to concentrate on the Euro instead.
The DAX rallied again yesterday hitting my initial 15560 sell level. I am still short with the same 15705 stop. I will now raise my T/P level to 15530 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
I am still flat the FTSE and like the Dollar above I will stay flat the FTSE until I return on January 4 as the FTSE is closed for most of the next week..
Dow Rolling Contract
The Dow has now rallied over 1100 points since Monday’s low print. It is almost impossible to trade this market with a ‘’Fixed Stop’’ as it is almost guaranteed to be hit. You are better off in my opinion trading the Dow in small size with a ‘’Mental Stop’’ only. I WISH I HAD STUCK TO THIS RULE over the past few weeks given the number of times that I had the right view only to be stopped. Yesterday the Dow traded higher to my initial 35610 sell level. I will add to this position at 35810 while leaving my 35945 stop unchanged. There is a fair chance that I will get stopped out of this position given the ‘’Santa Rally’’ and 1100 point rally in the last 48 hours. However, in my opinion I think American Markets will run into trouble in the early part of 2022 before rallying ahead of the November Elections. I do not like this market given the stretched valuations and price action. The Dow has strong support from 34980/35150 where I will be an aggressive buyer with a 34825 stop.
Cash NASDAQ 100
Frustratingly, the NDX sell-off yesterday morning missed my 15850 T/P level by 35 points before rallying to my second sell level at 16040. Subsequently, I was stopped out of this short position at 16105 and I am now flat. The NDX has strong resistance at 16300 which was the break down level last week. As a result I will be a seller from 16280/16380 with a 16505 stop. Meanwhile, I will continue to be an aggressive buyer on any dip lower to 15500/15350 with the same 15225 stop. If I am taken long I will have a T/P level at 15620. If I am taken short I will have a T/P level at 15190 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
The Bund continued Monday’s sell-off and I am still flat. With the Bund closed tomorrow I am going to stay flat this Contract over the Holiday period until I return on Jan 4.
Gold Rolling Contract
I am still flat. My only interest in buying Gold is still on a dip lower to 1752/1767 with the same 1739 stop. If I am taken long I will have a T/P level at 1775.
Silver Rolling Contract
No Change. I am still an aggressive buyer from 21.40/22.10 with a 20.85 stop. If I am taken long I will have a T/P level at 22.50.
Thank You Bryan for all your guidance this year happy Christmas to you and yours .. look forward to next year..
Ken O Brien