U.S. Equity Markets surged to start the week, finishing the day higher, led by the NASDAQ 100 which ended the day with a gain of 2.50%. This huge rally saw the VIX close lower by 8.81%. Stimulus made more headlines. A group of 10 Senate Republicans said they would unveil a $600 billion Coronavirus-aid bill today as a counterproposal to President Joe Biden’s $1.9 trillion plan. And President Biden said that he would meet with the group in order to discuss the proposal, boosting hopes of a compromise. Earnings continue to beat expectations. So far, 82% of S&P 500 companies that have reported have beaten estimates. That is above the 74% five-year average. Economic data was mixed, as the ISM Manufacturing Index fell from the initial reading, while Markit Manufacturing PMI rose from the initial reading. Both measures of manufacturing activity are rooted in expansion territory, a strong sign for the economy. Elsewhere, despite awful German Retail Sales, European Markets closed higher. European Commission President Ursula von der Leyen said AstraZeneca will deliver nine million more Coronavirus vaccine doses in the first quarter than initially promised. Markit Euro-Zone’s final manufacturing purchasing managers’ index (“PMI”) data for January was higher than the preliminary reading, demonstrating the regional economy’s resilience despite ongoing social-distancing restrictions. The Organisation of the Petroleum Exporting Countries and its partners are said to have observed 99% compliance in adhering to output quotas last month. Elsewhere, Oil closed 2.76% higher on reports that OPEC countries were nearly 100% compliant with output cuts, while Gold finished with a gain of 0.6%, as it followed the price of Silver higher.
To mark my 2225th 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 205 points yesterday on the first trading day for February, having finished January with a gain of 2077 points, 2273 points in December, 2025 points in November, 2779 points in October, 3042 points in September, 2383 points in August, 3128 points in July, 2580 points in June, 2456 points in May, 4773 points in April, and an incredible 9264 points in March. 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 1.61% higher at a price of 3773.
The Dow Jones Industrial Average closed 230 points higher for a 0.76% gain at a price of 30,212.
The NASDAQ 100 closed 2.50% higher at a price of 13,249.
The Stoxx Europe 600 Index closed 1.2% higher.
The MSCI Asia Pacific Index rose 0.5%.
This morning, the Nikkei closed 0.97% higher at a price of 28,362.
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.6% lower at $1.2060.
The British Pound closed 0.1% lower at $1.3682.
The Japanese Yen closed 0.2% lower at 104.96 per dollar.
Germany’s 10-year yield closed five basis points higher at -0.51%.
Britain’s 10-year yield closed one four points higher at 0.32%.
US 10 Year Treasury closed five basis points higher at 1.08%.
West Texas Intermediate crude closed 2.76% higher at $53.10 a barrel.
Gold closed 0.61% higher at $1,855.20 an ounce.
This morning on the Economic Front we already had the release of UK Nationwide House Prices which fell 0.3% versus +0.3% expected. At 10.00 am we have Euro-Zone GDP. Finally, we have U.S ISM New York Business Conditions Index at 2.45 pm and a speech from Fed Member Williams at 6.00 pm.
March S&P 500
Incredible volatility in the S&P to start February, with the S&P now trading 120 Handles higher from where we were trading shortly after the Futures Market re-opened on Sunday evening. My S&P plan worked well but you had to be quick as the market will not let you stay short for any length of time. After the S&P hit my 3748 sell level we saw a fall of 24 Handles and this move lower enabled me to cover this position too early at 3741 and I am still flat. This morning we are trading higher at 3793 as I go to press. I am still convinced that this market is an accident waiting to happen but until we take out key support we have to be patient. While the Dow closed again below its 50 Day Moving Average, the S&P’s (3712) held and we saw a subsequent strong rally. I am watching the VIX closely. Although the VIX closed lower by 8.81% yesterday we are still trading well above both its 50 and 200 Day Moving Averages. Last week’s spike in the VIX was the highest in two years which is incredible when you see what happened with the February/March 2020 crash. With sentiment and various valuation measures more extreme than at anytime in history, including the 1929 top, short-term bearish signals such as the VIX are important to heed. The S&P has short-term resistance from 3805/3820 where I will be a seller with a 3835 tight stop which is just above last Wednesday’s 3822 rebound high. We have support from 3728/3745 where I will be a buyer with a 3708 ‘’Closing Stop’’.
After the Euro traded lower to my 1.2075 buy level we saw a small bounce and I emailed my Platinum Members to exit any long position at 1.2095 and I am still flat. The break and close below 1.2110/1.2150 is short-term bearish and today I will be a small seller in this area with a tight 1.2175 stop. I will be a small buyer from 1.1970/1.2010 with a 1.1925 stop.
March Dollar Index
I am still flat and I will now raise my buy level to 90.10/90.50 with a 89.65 higher stop.
At 8.00 pm last night I emailed my Platinum Members to cancel any sell order in the DAX as I did not want to get caught with an overnight position and I am still flat. Today I will raise my buy level to 13560/13630 with a 13485 stop. I no longer want to be short the DAX at this time.
The FTSE just missed my 6360 buy level by a few points before rallying to sit at 6450 this morning. I will now raise my buy level to 6370/6410 with a higher 6325 stop. If I am taken long I will have a T/P level at 6455.
Dow Rolling Contract
Overnight, the Dow rallied to my 30370 sell level before having a small sell-off. I keep emphasising the importance of my Platinum Service as the updated emails are key in my opinion. This morning, I emailed them to exit any short position at my 30330 revised T/P level and I am still flat. In the last 20 minutes the Dow has rallied further to sit at 30450 as I go to press. However, the Dow has underperformed both the S&P and NASDAQ so far this year. We have resistance from 30510/30670 where I will again be a seller with a 30740 tight stop. I will now raise my buy level to 29950/30150 with a 29865 stop.
The NASDAQ is now trading over 600 points higher than where we were when the Futures Market re-opened on Sunday evening as yet again anyone trying to short this market for any length of time is slammed. The NASDAQ has resistance from 13390/13490 where I will be a small seller with a 13555 stop.
I am still flat and I will now lower my buy level to 176.20/176.70 with a lower 175.85 stop. If I am taken long I will have a T/P level at 177.05.
Gold Rolling Contract
I am still flat and today I will now lower my buy level to 1805/1820 with a 1793 stop. Remember a break and close below 1810 is bearish.
Silver Rolling Contract
I was lucky with my Silver call yesterday as after the market sold off to my 28.40 buy level we rallied to my 29.15 T/P level and I am still flat. Yesterday morning Silver made a high at 30.15 before selling off 9% to sit at 27.50 this morning. Silver has strong support from 26.10/26.90 where I will again be a buyer with a 25.65 stop. If I am taken long I will have a T/P level at 27.45.