Global Equity Markets rose on positive vaccine news. Pfizer and BioNTech proposed boosting the size of their Coronavirus vaccine trial from 30,000 to 44,000, increasing scope and diversity, as they remain on track to submit data by late October. And Pfizer’s CEO said it could begin distributing hundreds of thousands of doses before the end of the year. This sparked optimism that the economy could return to normal quicker than expected. Meanwhile, AstraZeneca and Oxford University said they restarted Coronavirus vaccine clinical trials in the U.K. after receiving regulatory approval but have yet to do so in other countries. European Central Bank Chief Economist Philip Lane said a rising Euro hurts the outlook for inflation, implying the need for additional monetary easing. The World Health Organisation’s European head warned the continent will see a surge in Coronavirus deaths in October and November, but this was largely ignored by equity markets with the Dow and S&P closing higher by 1.18% and 1.27% respectively. Credit Suisse and UBS Group were said to explore a merger, with a deal potentially closing early next year. The CEO of Irish budget airline Ryanair, Eddie Wilson, said he expects the European Commission will unveil a new travel advisory this week to open – up borders across Europe. Elsewhere, the US Dollar was weak, resulting in the Euro testing $1.19 this morning, while Gold closed 1% higher.
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The S&P 500 closed 1.27% higher at a price of 3383.
The Dow Jones Industrial Average closed 327 points higher for a 1.18% gain at a price of 27,993.
The NASDAQ 100 closed 1.72% higher at a price of 11,277.
The Stoxx Europe 600 Index fell 0.1%.
The MSCI Asia Pacific Index rose 0.8%.
This morning the Nikkei closed 0.44% lower at 23,455.
The Bloomberg Dollar Spot Index again closed 0.4% lower.
The Euro closed 0.3% higher at $1.1875.
The British Pound closed unchanged at $1.2805.
The Japanese Yen closed 0.3% higher at 105.78 per dollar.
The yield on 10-year Treasuries closed one basis point higher at 0.67%.
Germany’s 10-year yield closed unchanged at -0.49%.
Britain’s 10-year yield closed two basis points higher at 0.20%.
The Bloomberg Commodity Index rose 0.3%.
West Texas Intermediate closed 0.15% lower at $36.98 a barrel.
Gold closed 1% higher at $1,959.10 an ounce.
This morning on the Economic Front we already had the release of UK Jobless Claims for August which came in at 73.7K versus 94.4K in July. At 10.00 am we have the German and Euro-Zone ZEW Survey. This is followed at 1.30 pm by the New York Empire State Manufacturing Index and the Import/Export Price Index. Finally, at 2.15 pm we have Industrial Production and Capacity Utilisation.
September S&P 500
My S&P plan worked well with the market trading higher to my 3400 sell level before selling off to an overnight low at 3376. This move lower enabled me to cover this position at my 3392 revised T/P level and I am still flat. With the FOMC Meeting tomorrow and the expiration of the September Contracts on Friday, the S&P is firm. Yesterday’s move higher saw the S&P leave a large ‘’Gap’’ from Friday’s 3340 Chicago low to yesterday’s 3365 intra-day low print. As a result, I will now raise my buy level to 3345/3360 with a higher 3329 stop. The S&P has resistance from 3421/3435 where I will be a small seller with a 3449 stop.
I am still flat the Euro with the market trading higher at 1.1890 this morning despite the bearish comments from ECB Member Lane. I will now raise my sell level slightly to 1.1925/1.1965 with a higher 1.2005 stop. I will also raise my buy level to 1.1780/1.1820 with a 1.1735 stop.
December Dollar Index
The Dollar is trading 0.3% lower from where I posted yesterday morning and I am still flat. The Dollar has strong support from 92.00/92.50. I will now lower my buy level to this area with a 91.55 stop. If I am taken long I will have a T/P level at 92.90.
Every dip in the DAX is met by strong buying. This is happening against a background of a rising Euro which is unusual. However, the price action has to be respected. As the DAX is selling off as I go to press, I will now lower my buy level to 12990/13070 with a lower 12915 stop. If I am taken long I will have a T/P level at 13130.
After the FTSE hit my 6015 buy level we traded in a narrow range for the rest of the day. This morning the FTSE has opened higher and I have now exited this long position at 6040. Given the weakness of Sterling I will continue to buy the dip and today my buy level will be from 5970/6010 with a 5935 tight stop.
Dow Rolling Contract
My Dow plan also worked well with the market trading higher to my initial 28050 sell level before selling off to my revised 27995 T/P level and I am still flat. The week of Expiration tends to be a positive one for the markets. As a result I will now raise my buy level to 27580/27780 with higher 27445 stop. The Dow has initial resistance from 28300/28500 where I will be a small seller with a 28625 stop.
Although the NASDAQ closed 1.72% higher yesterday, Breadth continues to deteriorate, with the 10-Day Daily Advances minus Declines now at its lowest level since March. While the NASDAQ may pop higher ahead of Friday’s Quadruple Expiration, the waning Breadth points to further weakness. I am still flat and today I will raise my buy level to 11100/11200 with a 10995 stop. I will continue to be an aggressive buyer from 10850/10650 with the same 10535 wider stop. Ahead of the FOMC Statement and Powell press conference tomorrow, I still do not want to be short the NASDAQ at this time.
The BUND traded in a narrow range yesterday and I am still flat. The Bund has support from 173.10/173.50. I will now lower my buy level to this range with a lower 172.75 stop.
Gold Rolling Contract
The renewed weakness in the Dollar is supporting Gold and I am still flat. I will now raise my buy level to 1928/1940 with a higher 1915 stop.
Silver Rolling Contract
I am still flat and today I will again raise my buy level to 26.00/26.70 with a higher 25.35 stop.