After rallying over 6% in just four trading session, the S&P closed 0.63% lower as COVID-19 vaccine concerns weighed on markets. Johnson & Johnson announced that its vaccine trial had been paused after one of the patients came down with an unexplained illness. This is the second high-profile COVID-19 vaccine trial to be paused after AstraZeneca’s (AZN) was halted for the same reason. AZN’s trial has started up again in the U.K. but remains on hold in the U.S. In terms of stimulus, House Speaker Nancy Pelosi shot down the White House’s proposed $1.8 trillion Stimulus Bill, saying that the U.S. needs more relief. Earnings season kicked off yesterday. JPMorgan beat on earnings and revenue, and also surprisingly lowered its loan loss provisions. This indicates that it may have overestimated the amount of loan losses in the past two quarters. Citibank, on the other hand, increased its provisions. European Indices also closed in the red, as Euro-Zone Economic Sentiment data for October were weaker than expected, signalling regional growth optimism may be moderating due to a resurgence in Coronavirus infections. The International Monetary Fund called on the global community to respond to the negative economic impact of the Coronavirus through increased lending to hard-hit countries. The International Energy Agency said it could take as long as 2025 before crude oil demand returns to pre-pandemic levels. Bank of England Governor Andrew Bailey said the central bank is not ready to impose negative interest rates yet. Elsewhere, Oil closed 2% higher after China reported rising crude imports, supporting the demand picture, while Gold closed 1.6% lower on Dollar strength.
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For anyone following my Platinum Service it made 281 points yesterday and is now ahead by 1075 points for October, having made 3042 points in September, 2383 points in August, 3128 points in July, 2580 points in June, 2456 points in May, 4773 points in April, an incredible 9264 points in March, 2223 points in February and 2142 points in January. 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 0.63% lower at a price of 3511.
The Dow Jones Industrial Average closed 157 points lower for a 0.58% loss at a price of 28,679.
The NASDAQ 100 closed 0.04% lower at a price of 12,083.
The Stoxx Europe 600 Index closed 0.4% lower.
The MSCI Asia Pacific Index rose 0.2%%.
This morning the Nikkei closed 0.11% higher at a price of 23,626.
The Bloomberg Dollar Spot Index closed 0.3% higher.
The Euro closed 0.5% lower at $1.1740.
The British Pound closed 0.9% lower at $1.2620.
The Japanese Yen closed 0.1% lower at 105.45 per dollar.
The yield on 10-year Treasuries closed four basis points lower at 0.73%.
Germany’s 10-year yield closed one basis point lower at -0.56%.
Britain’s 10-year yield closed three basis points lower at 0.24%.
The Bloomberg Commodity Index closed 0.1% lower.
West Texas Intermediate closed 2% higher at $40.21 a barrel.
Gold closed 1.6% lower at $1892 an ounce.
This morning on the Economic Front we have a speech from ECB President at 9.00 am and this is followed by Euro-Zone Industrial Production at 10.00 am. Finally, we have U.S MBA Mortgage Applications at 12.00 pm and at 1.30 pm by PPI. It is a busy day for Central Bank speakers with the ECB’s Mersch and Lane speaking at 12.00 pm and 1.00 pm respectively, while later this afternoon it is the turn of the Fed’s Clarida at 2.00pm followed by Quarles at 7.00 pm.
December S&P 500
The S&P closed lower after rallying over 200 Handles in the previous four trading sessions enhanced by the level of complacency building into equity markets ahead of the U.S Election on November 3. I read an interesting article yesterday that asked the question about whether the Electoral College will vote for Joe Biden even if he wins. The article went on to say that if Biden wins a key State like Florida, yet the Republican Governor (Ron DeSantis) and State legislature there decides to cast it’s Electoral College votes for Trump using fraud in the election court as an excuse. There is no such law that says they could not vote for Trump. This would be sent to the Supreme Court which the Republicans control and would cause upheaval ahead of the Electoral College votes which are not cast until December 14. This maybe an unlikely scenario but gives you an idea of what can happen as we know if Trump losses that he will not go quietly. Yesterday, my S&P plan worked well with the market rallying to my 3532 sell level before selling off to an intra-day low of 3491. This move lower saw my revised 3522 T/P level being filled and I am still flat. Today, I will again be a seller from 3530/3545 with the same 3561 stop. Meanwhile, I will raise my buy level to 3475/3490 with a 3463 higher stop.
The Euro traded lower to my 1.1740 buy level. I am still long with a lower 1.1755 T/P level. I will now raise my stop on this position to 1.1695. The 50 Day Moving Average is at 1.1802 and as a result I will now lower my sell range to 1.1800/1.1840 with a 1.1875 tight stop.
December Dollar Index
My latest 93.10 long Dollar position worked well with the market trading higher to my 93.40 T/P level and I am still flat. Today. I will again be a buyer from 92.90/93.30 with a 92.55 stop.
After the DAX traded lower to my 12970 buy level I had too many open positions and I emailed my Platinum Members to exit any long position at 11301 and I am still flat. Today, my buy level will be from 12850/12930 with a 12795 tight stop.
No Change as I am still a buyer on any dip lower to 5870/5915 with the same 5835 stop.
Dow Rolling Contract
The Dow just missed my 28900 sell level be 10 points before falling to a low of 28604 and I am still flat. I am not going o chase the Dow lower and I will leave my 28900/29100 sell level unchanged with the same 29250 stop. The Dow has short-term support from 28350/28500 where I will be a small buyer with a 28195 stop.
The NASDAQ again traded the whole of my sell range for a 12180 average short position before thankfully selling off to my 12110 revised T/P level and I am still flat. The NASDAQ has strong support from 11910/12000 where I will be a small buyer with a tight 11825 stop. The NASDAQ has resistance from 12250/12350 where I will also be a small seller with a 12455 stop.
The BUND yield continues to move lower. I know a lot of US Banks are bearish of 10 Year Treasuries but it is difficult for Yields to rise given the level of Central Bank Intervention. As I have said numerous times both Central Banks and Governments cannot afford for Rates to rise given the extraordinary level of debt across the globe. I will now raise my buy level to 174.20/174.70 with a higher 173.85 stop.
Gold Rolling Contract
My Gold plan worked well with the market trading the whole of my buy range for a 1889 average long position before rallying to my 1894 revised T/P level and I am still flat. Gold has strong support from 1858/1870 where I will again be a buyer with an 1847 stop.
Silver Rolling Contract
Silver traded lower to my 24.20 buy level. I am still long and I will add to this position on any further move lower to 23.60 with a 23.25 stop. I will now lower my T/P level to 24.40 and if any of the above levels are filled I will be back with a new update for my Platinum Members.