As speculated yesterday, Vaccine optimism boosted markets once again, which finished the day higher, led by Dow which gained 1.13%. We got more positive news on a vaccine. Operation Warp Speed Chief Moncef Slaoui said the U.S. hopes to begin administering Coronavirus vaccinations within the next few weeks. And there were reports that the U.K. could approve Pfizer’s and BioNTech’s COVID-19 vaccine candidate for emergency use authorisation (“EUA”) as early as this week. In terms of Economic data, U.S. PMI data were better than expected, with both the Services and Manufacturing components beating expectations. Manufacturing PMI is now at a 74-month high, with services PMI at a 68-month high. The survey also showed that employment growth was the strongest since the data began being tracked in 2009. This is an encouraging sign for the strength in the broader U.S. economy. European Equity Markets rose after Markit Euro-Zone Preliminary Manufacturing Purchasing Managers’ Index (“PMI”) data for November beat expectations, indicating the region’s economy is holding up despite the reintroduction of social-distancing measures. German Health Minister Jens Spahn said the country could begin rolling out COVID-19 vaccinations as soon as next month. France and Italy were said to be discussing plans for a gradual easing of COVID-19-related restrictions starting in December. European Commission President Ursula von de Leyen expressed optimism regarding progress made in Brexit negotiations but warned there’s still work to be done. And ECB Chief Economist Philip Lane said the central bank’s Quantitative Easing programme will continue as long as COVID-19 pressures persist. AstraZeneca and Oxford University released data for their Coronavirus vaccine, showing 90% effectiveness in some tests, but an average effectiveness of 70%. Elsewhere, Oil rose as OPEC members got set to meet to discuss further production cuts later this week, while Gold got hard, closing over 2% lower on Dollar strength.
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The S&P 500 closed 0.56% higher at a price of 3577.
The Dow Jones Industrial Average closed 328 points higher for a 1.13% gain at a price of 29,591.
The NASDAQ 100 closed unchanged a price of 11,906.
The Stoxx Europe 600 Index closed 0.8% higher.
The MSCI Asia Pacific Index fell 0.5%.
The Nikkei was closed yesterday so I am using last Friday’s close of 25,527.
The Bloomberg Dollar Spot Index closed 0.3% higher.
The Euro closed 0.3% lower at $1.1828.
The British Pound closed 0.3% higher at $1.3323.
The Japanese Yen closed 0.6% lower at 104.52 per dollar.
The yield on 10-year Treasuries closed four basis points higher at 0.86%.
Germany’s 10-year yield closed unchanged at -0.58%.
Britain’s 10-year yield closed two basis points higher at 0.33%.
The Bloomberg Commodity Index closed 0.3% higher.
West Texas Intermediate closed 1.11% higher at $42.75 a barrel.
Gold closed 2.03% lower at $1828 an ounce.
This morning on the Economic Front we have German GDP at 7.00 am and the IFO Survey at 9.00 am. This is followed at 11.00 am by U.S House Price Index, Finally, at 3.00 pm we have Consumer Confidence and the Richmond Fed Manufacturing Index.
Meanwhile the Fed’s Williams and Clarida are due to speak at 5.00 pm and 5.45 pm respectively.
December S&P 500
Frustratingly, the S&P just missed my 3545 buy level before rallying 30 Handles into the close and I am still flat. Since the recent all-time high on November 9, the S&P continues to make lower highs which is no surprise as most of the good vaccine news is already priced into the market. However, as I mentioned in yesterday’s commentary this is traditionally one of the strongest weeks of the year and is why I am reluctant to go short. Just before I post it was announced that President Trump has promised to co-operate with the transition for Joe Biden’s upcoming Presidency. The S&P is surging on this news, trading at 3596. As a result I will now raise my buy level to 3550/3566 with a higher 3539 stop. I will continue to be an aggressive buyer on any dip lower to 3485/3503 with the same ‘’Closing 3469 Stop’’. If I am taken long I will have a T/P level at 3577. If I am taken long a second time I will have a T/P level at 3519.
The Euro rallied to a morning high at 1.1905 before reversing 105 points lower, and this enabled me to buy the Euro at 1.1810. Subsequently we rallied to my 1.1845 T/P level and I am now flat. Today I will be a small buyer from 1.1750/1.1790 with a 1.1715 tight stop.
December Dollar Index
My Dollar plan worked well with the market trading lower to my 92.10 buy level before rallying to my 92.45 T/P level and I am still flat. I will again look to buy the Dollar from 91.80/92.20 with a higher 91.45 stop. If I am taken long I will have a T/P level at 92.55.
The boring sideways action in the DAX continues and I am still flat. I will now raise my buy level to 12980/13070 with a higher 12895 stop. I still do not want to be short the DAX at this time.
I am still flat and I will now lower my sell level to 6395/6435 with a lower 6481 stop.
Dow Rolling Contract
The vaccine news saw the Dow finish the strongest of the US Indices. In my opinion all the good news is priced in and I will now look to take a more macro short position either on Friday or next Monday. I will now raise my buy level to 29180/29380 with a 29005 wider stop. If I am taken long I will have a T/P level at 29525.
My NASDAQ plan worked well with the market trading lower to my 11870 buy level before rallying to my 11910 revised T/P level and I am now flat. The NASDAQ has resistance from 12030/12110 where I will be a seller with a wider 12205 stop. If I am taken short I will have a T/P level at 11955. I no longer want to be long the NASDAQ at this time.
The boring sideways action in the Bund shows no sign of ending and I am still flat. The Bund has resistance from 175.75/176.15 where I will be a small seller with a 176.51 stop.
Gold Rolling Contract
Gold got slammed yesterday with the market accelerating to the downside after we broke 1850. This move lower saw the whole of my buy range being filled for a 1837 average long position. I no longer want to be long and I exited this long position for a small loss at 1833 as emailed earlier to my Platinum Members. Gold has resistance from 1845/1858 where I will be a seller with a 1871 stop.
Silver Rolling Contract
Silver traded lower to my 23.50 buy level. I am still long and I will now lower my T/P level at 23.75 with a now higher 22.95 stop.