U.S. Equity Markets posted their first back-to-back gains since Feb. 12 as investors awaited unprecedented government spending packages aimed at countering the hit from the Coronavirus pandemic. Ten-year Treasury yields were steady. The S&P 500 Index logged its biggest two-day advance since November 2008 after negotiations in Congress paved the way for a vote on the stimulus bill this week. Boeing Co. rallied 24%, lifting the price-weighted Dow Jones Industrial Average toward its best two days since 1987. The blue-chip index is still down about 25% from its February record. Stocks fell from the day’s highs late in the session after Republican senators raised objections to the unemployment benefits section of the stimulus bill, and Vermont Senator Bernie Sanders threatened to hold up the legislation unless those objections were dropped. Apple Inc. was said to be discussing delaying its 5G iPhone, also weighing on sentiment. Despite hopes surrounding the stimulus, James Bullard of the St. Louis Federal Reserve Bank told reporters that he expects Jobless Claims to surge and said the U.S. won’t resume normal life until people feel safe. Equities also gained in Europe, where leaders are inching toward a fiscal package of their own. In Asia, a regional stock benchmark is posting the best one-day increase since 2008. West Texas crude rebounded somewhat after falling below $25 a barrel. The US Dollar dropped for a second day versus its biggest peers. Spot Gold drifted lower after a squeeze of historic proportions pushed its prices to the biggest one-day gain since November 2008 on Tuesday. The closing of refineries and demand for physical gold had caused a disconnect between prices in London and New York.
To mark my 2025th issue of TraderNoble Daily Commentary I am offering a special 2 year rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day To demonstrate this value, a monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. If anyone is interested in this offer can you please email me on firstname.lastname@example.org for details
For anyone following my Platinum Service it made 585 points yesterday and is now ahead by 8542 points for March, having made 2223 points in February, 2142 points in January, 818 points in December, 780 points in November, 1649 points in October, 1620 points in September and 2387 points in August Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Investors are seeing U.S. and global equity indexes posting their first consecutive daily gains since just before the rout began a month ago, even as economies from Milan to Seattle reel from the deepening pandemic. With infections mounting globally and Spain reporting more than 700 deaths in a single day, traders are reminded that the threat to the global economy is well alive. These markets are trading on sentiment. Shifting between panic to optimism. At the macro level, policy keeps evolving, and the economic data we know is going to be bad, but magnitudes are a wild card and there is little certainty on duration.
The S&P 500 Index rose 1.2%, closing at a price of 2475, which was 90 Handles below its afternoon high.
The Dow Jones Industrial Average rose 495 points to close at 21,200 for a gain of 2.4%.
The Stoxx Europe 600 Index gained 3.1%.
The MSCI Asia Pacific Index rose 5.6%.
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index declined 1.2%.
The Euro gained 0.9% to $1.0888.
The British Pound advanced 1.1% to $1.1886.
The Japanese Yen was little changed at 111.18 per dollar.
The yield on 10-year Treasuries was little changed at 0.84%.
Germany’s 10-year yield rose six basis points to -0.262%.
Britain’s 10-year yield slid three basis points to 0.445%.
Gold declined 1.3% to $1,610.41 an ounce.
West Texas Intermediate crude gained 1.5% to $24.37 a barrel.
This morning on the Economic Front we already had the release of UK Retail Sales which fell 0.3% versus +0.2% expected. German GFK Consumer Confidence was also released coming in weaker than expected at 2.7. At 9.00 am we have Euro-Zone Money Supply and the Economic Bulletin. Next, we have the Bank of England Minutes at 12.00 pm, followed at 12.30 pm by U.S. Weekly Jobless Claims, Wholesale Inventories and GDP. Finally, at 3.00 pm we have the Kansas City Fed Manufacturing Activity Index.
June S&P 500
Despite the S&P rallying hard over the past two days the VIX which closed unchanged on Tuesday actually rose 4% yesterday to close at a still extremely high 63.95. However, on the positive side the McClellan Oscillator has been on a tear closing at +90 last night. This is the first positive reading in the MO in many weeks. All eyes will be on the 12.30 pm release of US Weekly Jobless Claims. For decades, these Claims have only exceeded 500,000 in recessions, and that was after rising steadily for months. Recently they have run around the 200,000 mark. Goldman Sachs and many others think today’s report will be over two million – 10 times what is was last month. Jobs are being destroyed at an unprecedented speed, and we should see that in the March Jobs due on Friday week, April 3. The big question is how long so many people will stay unemployed. The answer is up to the virus, but in my opinion it will take at least 18 months for the employment numbers to get back to where they were. Yesterday my S&P plan worked well with the market trading lower to my 2408 buy level before surging 150 Handles. Unfortunately I covered this position too early at 2432. Subsequently I emailed my Platinum Members to re-buy the S&P again at 2414 before covering this position too early as well at 2426 and I am now flat. The S&P made a new recovery high at 2558 as phase two plays out. (please refer to yesterdays’ Dow Commentary for my overall take on the US Indices) Despite the Senate passing the Stimulus Bill overnight the S&P is trading 50 Handles below last night’s Chicago close. If we can make a higher low above 2320 then we should see the S&P eventually hit my 2800/3000 phase two target before the real sell-off in the S&P begins. The S&P has support from 2370/2400 where I will be a buyer with a 2355 stop. Value above 2568 and settling above 2575 shows a move to 2700, 2784 and then my 2800/3000 where I will look to set up a macro short position. Remember all ‘’Open Gaps’’ in the S&P get filled and we have a large Gap left from March 13/16 at 2700 in the June Contract.
I am still flat the Euro and today I will raise my sell level to 1.0980/1.1040 with a higher 1.1075 stop.
June Dollar Index
The Dollar has traded the whole of my buy range for a now average 100.80 long position. I will leave my stop unchanged at 100.05 while lowering my T/P level to 101.05.
Incredible volatility in the DAX with the market falling over 600 points within an hour of posting yesterday morning. This move lower saw the DAX hit the whole of my buy range at 9650 before stopping me out near the low of the day at 9495 and I am now flat. This is why I hate using physical stops especially trading small size. Subsequently the DAX rallied back above 9950 before selling off this morning. The DAX has support from 9410/9560 where I will again be a buyer with a 9335 stop. If I am taken long I will have a T/P level at 9650.
The FTSE spiked to a high of 5705 shortly after I posted yesterday, enabling me to go short at 5650 before the market reversed aggressively to hit my 5570 T/P level and I am now flat. Given the weakness in Sterling it is hard to see the FTSE trade lower at this time especially given how oversold the market is. Today I will be a buyer from 5360/5440 with a 5285 stop.
Dow Rolling Contract.
For the first time in 15 months, the Investors Intelligence Advisors’ Survey turned negative. The Bull/Bear Ratio slipped below 1.00 to a reading of 0.72 this past week (30.1 Bulls vs 41.7 Bears), making a new four-year bearish extreme. For perspective, the Bull/Bear ratio declined to 0.41 in October 2008. This is another reason why we finally saw a relief rally in the Dow which carried to a high of 22019 yesterday afternoon, frustratingly missing my 22100 initial sell level before falling 1200 points. Shortly after I posted the Dow traded the whole of my buy range for an average 20675 long position before I cut this position way too early at 20810 and I am still flat. In points terms I have never seen such volatility with the Dow moving 150/300 points every 30 minutes. Similar to the S&P above the Dow has left an Open Gap at 23185 from its close on March 13. If the Dow can build value and settle of 22100 then we should rally to my 24000 target level over the coming days. The Dow has short-term support from 20370/20620 where I will be a buyer with a 20215 stop.
My NASDAQ plan worked well with the market trading the whole of my buy range for a 7515 average long position before rallying to my revised 7635 T/P level and I am now flat. The NASDAQ has strong support from 7230/7310 which must hold and today I will be a buyer on any dip to this area with a 7165 tight stop.
My 169.80 long Bund position worked well with the market trading higher to my 170.05 T/P level and I am now flat. The Bund has support from 169.00/169.60 where I will be a buyer with a 168.55 stop.
Gold Rolling Contract
No Change as I still staying away from this market until volatility decreases.
Silver Rolling Contract
I am still flat Silver and today I will raise my buy level slightly to 13.50/13.90 with a higher 13.15 stop.