U.S Markets rose at the open, before falling in a volatile trading session as the S&P closed 1.63% lower. Stimulus headlines were mixed, after Speaker of the House Nancy Pelosi said she is hopeful a Stimulus deal will be signed before the election despite differences between the White House and Democratic leadership. But she also has given a deadline of this evening for a deal, which raised concerns that there are too many issues to be resolved in too short of a time span. Late in the day, Democrats said that they had still not reached a deal. In terms of economic data, Homebuilder Sentiment rose again, setting another new record, as strong housing demand continued to spur optimism in the sector. Coronavirus fears weighed on markets, though. Wisconsin restored restrictions on bars and restaurants to combat a rise in cases. European Indices closed mixed. European Central Bank President Christine Lagarde said there is an increased need for more Stimulus due to heightened uncertainties caused by new Coronavirus restrictions. Britain’s National Health Service said the COVID-19 vaccine candidate from Oxford University and AstraZeneca could be rolled out as soon as December. Italy’s government approved a preliminary stimulus package worth more than $45 billion for its new 2021 budget while introducing more stringent social-distancing measures. Italy also announced new Coronavirus restrictions, including a curfew on events in public spaces. And it was not alone… Switzerland introduced Coronavirus-related restrictions, banning gatherings of 15 people or more and mandating masks be worn in all indoor public places. Elsewhere, the Dollar surprisingly fell 0.4%, while Oil closed 0.64% lower after China’s GDP growth fell short of estimates, raising concerns over the global growth picture.
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The S&P 500 closed 1.63% lower at a price of 3426.
The Dow Jones Industrial Average closed 410 points higher for a 1.44% loss at a price of 28,195.
The NASDAQ 100 closed 1.84% lower at a price of 11,634.
The Stoxx Europe 600 Index closed 0.2% higher.
The MSCI Asia Pacific Index rose 0.2%%.
This morning the Nikkei closed 0.44% lower at a price of 23,567.
The Bloomberg Dollar Spot Index closed 0.4% lower.
The Euro closed 0.5% higher at $1.1770.
The British Pound closed 0.2% higher at $1.2953.
The Japanese Yen closed 0.1% lower at 105.51 per dollar.
The yield on 10-year Treasuries closed one basis point higher at 0.77%.
Germany’s 10-year yield closed unchanged at -0.63%.
Britain’s 10-year yield closed one basis point lower at 0.16%.
The Bloomberg Commodity Index closed 0.3% lower.
West Texas Intermediate closed 0.63% lower at $40.31 a barrel.
Gold closed 0.08% lower at $1894 an ounce.
This morning on the Economic Front we already had the release of German PPI which rose 0.4% versus -0.1% expected. At 9.30 am we have UK CPI, PPI, Public Sector Net Borrowing and Retail Price Index. This is followed at 12.00 pm by U.S MBA Mortgage Applications. Finally, we have a speech from Fed Member Brainard at 1.50 pm and the release of the Beige Book at 7.00 pm.
December S&P 500
With just two weeks to go to the election there is no sign of a breakthrough in Stimulus talks. This news hit the S&P hard falling from an intra-day high of 3495 to a low at 3413 before rallying after the close on news that Moderna expects Covid 19 vaccine results by mid-November. Yesterday’s move lower saw the S&P close below the key 3448/3463 previous support area and this zone should now act as strong resistance. I will be a small seller in this area with a 3475 ‘’Closing Stop’’. After the S&P hit my initial 3470 buy level, I emailed my Platinum Members to exit any long position at 3475. The S&P has support from 3398/3410 where I will be a buyer with a 3389 tight stop.
In a surprising move – given the weakness in equity markets – the Euro rose to a high of 1.1793 before having a small sell-off into the close. I am still flat and I will now raise my buy level to 1.1710/1.1750 with a 1.1679 stop. I no longer want to be short the Euro at this time.
December Dollar Index
The Dollar traded lower to my buy range and I am now long at a price of 93.30. I am not comfortable in being long and I will now lower my T/P level to 93.45. I will also raise my stop to 92.95 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 and today I will lower my buy level slightly to 12580/12650 with a lower 12515 stop. I will also lower my sell level to 12960/13040 with a lower 13105 stop.
Overnight, the FTSE traded lower to my 5830 buy level. I will add to this position at 5790 with the same 5745 stop. I will now lower my T/P level to 5855 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Dow Rolling Contract
The Dow reversed earlier gains as we saw strong selling pressure across the board. Yesterday’s NYSE Advance/Decline Ratio reflected stronger selling pressure than last Friday, with nearly three stocks closing lower for everyone that closed higher. On top of this the McClellan Oscillator closing negative with a -68 print. As long as the Dow does not break the October 12 high at 28,957, then rallies are to be sold. The Dow has near-term resistance from 28380/28530 where I will be a small seller with a 28705 stop. Yesterday, after the Dow traded lower to my 28480 buy level I covered this position at my revised 28545 T/P level and I am still flat. I will continue to be a buyer on any further move lower to 27700/27880 with the same 27595 stop.
The NASDAQ got hit hard yesterday, falling over 350 points from it’s morning high. This move lower saw the NASDAQ hit my 11760 buy level. I was not comfortable with the price action and I covered this position at my revised 11787 T/P level as emailed earlier to my Platinum Members. With two weeks to go to the U.S Election, volatility will pick-up as shown by yesterday’s 6.5% rise in the VIX to sit just below the key 30 level at 29.18. I will now lower my sell level to 11750/11825 with a 11905 stop. My only interest in buying the NASDAQ is from 11300/11400 with a 11195 stop.
I am still flat and today I will continue to be a seller from 176.35/176.85 with the same 177.15 stop.
Gold Rolling Contract
As I am long Silver I will now lower my Gold buy level to 1856/1868 with a 1847 stop.
Silver Rolling Contract
Silver traded lower to my 24.20 buy level. I am still long and I will now lower my T/P level to 24.40 with a now higher 23.95 stop. If any of the above levels are hit I will be back with a new update for my Platinum Members.