U.S. Equity Markets fought off a late-session swoon to close at fresh heights Tuesday, amid reports that the Federal Trade Commission is looking into acquisitions by some of the country’s biggest tech companies. The S&P 500 Index faded from session highs after the FTC news, with Facebook Inc. and Microsoft Corp. among the decliners. Health-Care and Consumer-discretionary shares led the day’s advancers. The Dow Jones Industrial Average and Nasdaq 100 were little changed. Ten-year Treasury yields rose, while the dollar dropped for the first time in five sessions. Investors have been more bullish lately despite the coronavirus outbreak, signalling some confidence that central banks could ease policy in the event growth slows down. In remarks to Congress Tuesday, Federal Reserve Chairman Jerome Powell, while positive about the American economic outlook, said the central bank is keeping a close eye on fallout from the epidemic, which continues to disrupt travel and trade. Oil bounced back from Monday’s swoon and Gold fell. Bitcoin surged back above $10,000. European and Asian equity benchmarks closed higher.
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Earnings season continues with reports including MGM Resorts International and Softbank on Wednesday; Thursday will bring Alibaba, Nissan, Credit Suisse, Airbus, Nestle and AIG.
The S&P 500 Index increased 0.2% to close at a price of 3358.
The Dow Jones Industrial Average closed unchanged at 29,276.
The Nasdaq 100 closed unchanged after a late 80 point sell-off from yet another new all-time high.
The Stoxx Europe 600 Index gained 0.9%, the highest on record.
The MSCI Emerging Market Index climbed 1.1% to 1,099.
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot closed 0.2% lower.
The British Pound climbed 0.3% to $1.2956.
The Euro gained 0.1% to $1.0993, the first rise in a week.
The Japanese Yen was little changed at 109.79 per Dollar.
The yield on 10-year Treasuries advanced five basis points to 1.59%.
Britain’s 10-year yield gained one basis point to 0.57%.
Germany’s 10-year yield gained two basis points to -0.39%.
West Texas Intermediate crude advanced 0.9% to $50.00 a barrel.
Gold weakened 0.2% to $1,568.20 an ounce.
Copper rose 0.1%.
This morning on the Economic Front we have Euro-Zone Industrial Production at 10.00 am and this is followed at 12.00 pm by U.S. MBA Mortgage Applications. Finally, at 3.00 pm Fed Chairman delivers his semi-annual Testimony to the Senate.
March S&P 500
In a volatile trading session the S&P just fell shy of my 3385 sell level before trading to an intra-day low of 3353 Subsequently we saw some late buying into the close and this move higher has continued overnight with the market trading at a price of 3367 as I go to press. The S&P is severely overbought as shown by the 50 Day Moving Average which comes in nearly 130 Handles lower at 3239. This key average has not bee broken since early October and even then this break only lasted a few days. Today I will continue to be an aggressive seller from 3385/3410 with the same wider 3425 stop. I am not going to chase the S&P higher and therefore I will leave my 3335/3345 buy range unchanged with the same 3327 tight stop.
Frustratingly the Euro just missed my 1.0880 buy level with a low of 1.0889 before we saw a late rally after six consecutive trading sessions of lower prices. I will now raise my buy level to 1.0850/1.0890 with a higher 1.0805 stop.
March Dollar Index
No Change as I am still a seller from 98.95/99.25 with a 99.55 stop. Given how overbought the Dollar is trading, I still do not want to be long the market at this time.
I am still flat the DAX. Yesterday the Euro-Stoxx closed at a new all-time high with the DAX also close to a break-out. This makes no sense given the economic backdrop but as I have said consistently over the years that ‘’ a market that does not fall on bad or weak news has to be respected’’. With this in mind I will now raise my sell level to 13730/13790 with a higher 13845 stop.
Very late yesterday the FTSE traded lower to my 7415 buy level before rallying to my revised 7437 T/P level and I am now flat. This morning the FTSE is opening slightly higher at 7450. The FTSE has strong support from 7360/7400 and I will be a buyer in this area a 7325 stop.
Dow Rolling Contract
The Dow also mad a new intra-day high yesterday at 29,437 before falling nearly 200 points into the close. We still have a slight negative divergence between the Dow and both the S&P and NASDAQ. However with the Dow only trading 650 points below round number resistance of 30,000 it would seem to me that the bulls will not give up until we test this now key resistance level. Yesterday’s late sell-off saw the Dow fall just shy of my 29020/29170 buy range before rallying into the close and again overnight. I am not going to chase the Dow higher and today I will leave my buy range unchanged with the same 28920 stop. I will still be a seller from 29650/29800 with the same 29905 stop.
Frustratingly the NASDAQ missed my 9620 sell level by 13 points before falling over 100 points into the close. Even though the market reversed it is a brave trader who will chase the NASDAQ lower and today I will continue to be an aggressive seller from 9620/9680 with the same 9725 stop. I will now raise my buy level to 9390/9460 with a 9345 stop.
The BUND has opened lower this morning and is now trading at a price of 173.85 which is 70 points below yesterday’s high. Today I will be a small seller from 174.30/174.70 with a 175.05 stop. I will also lower my buy level to 172.80/173.25 with a 172.45 stop.
Gold Rolling Contract
No Change as I am still a small buyer from 1538/1548 with the same tight 1532 stop.
Silver Rolling Contract
Silver continue to underperform Gold and I am still flat. Today I will lower my buy level to 16.90/17.30 with a lower 16.55 tight stop. If I am taken long I will have a T/P level at 17.52.