U.S. Equity Markets rebounded strongly from the early afternoon lows, finishing the day higher, led by the NASDAQ 100 which closed higher by 1.02%. Markets opened sharply lower as Senator Joe Manchin (D-WV) reiterated his opposition to the size of the White House’s $3.5 trillion budget legislation, saying it risks overheating the domestic economy. But markets rebounded strongly off these low levels throughout the rest of the day. Economic data was positive, with the National Association of Home Builders’ Housing Market Index showing homebuilder optimism because of continued strong demand for housing. Investors continue to keep an eye out for earnings this week, with Eighty S&P 500 Index companies and eight of the 30 Dow Jones Industrial Average members reporting. European Markets closed lower. German political parties agreed to begin talks to form a coalition government, potentially bringing 16 years of Christian Democratic Union control to an end. Russia’s Deputy Prime Minister Alexander Novak said the country is ready to boost natural gas supplies to Europe to help ease the recent jump in prices. Investors await a slew of speeches from European Central Bank governing council members for clues on its thoughts regarding the pace and timing of winding down pandemic bond purchases. In Asia, People’s Bank of China Governor Yi Gang said the economy is doing well and the government can contain the risks posed by China Evergrande’s financial problems. China’s third-quarter gross domestic product (“GDP”) data disappointed expectations, matching the slowest rate of growth since the pandemic drop last year. Japan’s Prime Minister Fumio Kishida said the government is keeping an eye on petroleum prices and it’s important to encourage companies to increase oil output. The Bank of Korea said it’s unlikely China Evergrande’s debt issues will cause a financial crisis, given the low exposure of local lenders and China’s ability to manage the matter. Elsewhere, Oil closed 0.07% lower while Bitcoin fell 1% after surging above $61,000 last week.
To mark my 2400th 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 email@example.com for details
For anyone following my Platinum Service it made 51 points yesterday and is now ahead by 729 points for October after making 2866 points in September, having closed August with a gain of 1543 points, 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 0.34% higher at a price of 4486.
The Dow Jones Industrial Average closed 36 points lower for a 0.10% loss at a price of 35,258.
The NASDAQ 100 closed 1.02% higher at a price of 15,300.
The Stoxx Europe 600 Index closed 0.4% lower.
Yesterday, the MSCI Asia Pacific Index rose 0.2%.
Yesterday, the Nikkei closed 0.15% lower at a price of 29,025.
The Bloomberg Dollar Spot Index closed 0.1% higher.
The Euro closed 0.1% higher at $1.1610.
The British Pound closed 0.2% lower at 1.3726.
The Japanese Yen fell 0.1%, closing at $114.36.
Germany’s 10-year yield closed two basis points lower at -0.14%.
Britain’s 10-year yield closed five basis points higher at 1.15%.
US 10 Year Treasury closed two basis points higher at 1.59%.
West Texas Intermediate crude closed 0.07% lower at $82.79 a barrel.
Gold closed 0.15% lower at $1,763.10 an ounce.
This morning on the Economic Front we have Euro-Zone Construction Output at 10.00 am. This is followed by U.S. Housing Starts and Permits at 1.30 pm. Next, we have speeches from the ECB’s Lane at 3.00 pm and the FED’s Bowman at 6.15 pm. Finally, we have the Monthly Budget Statement at 7.00 pm.
December S&P 500
My latest 4457 short S&P position worked well with the market trading lower to test its 50-Day MA, hitting a low at 4436, allowing me to cover this position at my 4449 T/P level. Subsequently, the S&P soared 40 Handles. I went short again at a price of 4470. I am still short and I will add to this trade at 4490 with a 4501 ‘’Closing Stop’’. It is too obvious to expect the S&P to soar from here, driven by Liquidity and Seasonality and that nothing matter but these two. On top of this Goldman Sachs came out with a report over the weekend saying that 2021 will see a total of $230bn in buybacks. The melt up scenario is popular and an easy case to make while he sell case is harder, but often the hardest trade is the best trade. Five Year Treasury Yields have broken up and a move above 1.80% in the 10-Year will make it difficult for stocks to rally further in my opinion. However, the S&P needs to break yesterday’s low for a more sustained sell-off. I will have a T/P level on my 4470 short position at 4458. I will be a small buyer on any further dip to 4418/4433 with a 4405 ‘’Closing Stop’’ and a 4445 T/P level if executed.
No Change. I am still a seller from 1.1648/1.1688 with the same 1.1725 stop. Meanwhile, I will leave my 1.1495/1.1545 buy level unchanged with the same 1.1459 stop.
December Dollar Index
I am still flat the Dollar as I continue to be a small seller from 94.30/94.70 with the same 95.01 stop.
Frustratingly, the DAX just missed my initial 15400 buy level by 16 points before rallying 100 and I am still flat. I will now lower my DAX buy level to 15280/15360 with a lower 15215 stop.
I am still flat and today, I will lower my buy level to 7030/7080 with a lower 6985 stop.
Dow Rolling Contract
My Dow plan worked well yesterday. After the Dow hit my 35160 T/P level on my 35230 short position, I emailed my Platinum Members to go short again at 35320 before we traded lower to my second T/P level at 35270 and I am now flat. Some of the strongest rallies occur in bear markets as we have seen with the 200 Handle rally in the S&P over the past week. However, the NYSE Advance/Decline Ratio again closed negative. The Dow has resistance from 35410/35570 where I will again be a seller with a 35705 ‘’Closing Stop’’. I still do not want to be long the Dow at this time.
It was a frustrating day for me on the NASDAQ as the market fell shy of my 15005 T/P level with a 15036 low print before stopping me out late in the day at a price of 15205 for a 165 point loss and I am still flat. I am going to stay flat the NASDAQ today as I want to observe the price action after the recent 800 point rally since last week.
My Bund plan worked well with the market hitting my 168.70 buy level before rallying to my 168.91 revised T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 168.00/168.50 with a 167.65 tight stop.
Gold Rolling Contract
No Change. I am still a buyer from 1730/1745 with a 1719 stop.
Silver Rolling Contract
No Change. I am still a buyer on any dip lower to 22.10/22.70 with the same 21.55 stop.