With Congress agreeing an unprecedented spending bill to prop up the slumping economy, U.S. Equity Markets had their best day in almost twelve years as investors rediscovered their appetite for risk. The US Dollar halted a 10-day winning streak. The S&P 500 rebounded from the lowest level since 2016, notching a third straight Tuesday turnaround — and the biggest one-day gain since October 2008 — after starting the week with a rout. The Dow Jones Industrial Average rose more than 11% to clock its biggest advance since 1933. Lawmakers finally agreed the final sticking points in a roughly $2 trillion stimulus bill to help the U.S. economy get through the Coronavirus pandemic. The Stoxx Europe 600 Index also surged, led by health-care and industrial companies, even as data began to show the extent of economic damage to the region from the Coronavirus. Benchmarks across Asia jumped, with Korea’s Index soaring almost 9% after the government announced measures to stabilise markets. The US Dollar slumped against developed and Emerging Currencies alike, in a tentative sign of reduced stress after the greenback’s steepest appreciation since the Global Financial Crisis and longest winning streak since 2012. European bonds tracked Treasuries lower. About $26 trillion has evaporated from equity markets since mid-February, and investors have been left sifting the wreckage and weigh the chances of a lasting rebound. On the one hand, Wall Street has begun to argue that liquidations are nearing an end with real-money investors like pension funds ready to step in, and there are signs of improvement in some of world’s regions that were hardest-hit by the virus. On the other, the number of infections globally continues to accelerate and many of the largest economies are grinding to a halt. Tuesday’s gain in risk assets follows an unprecedented move by the Federal Reserve to backstop large swaths of the financial system. Still, key gauges of U.S. Manufacturing and Services in March fell the most on record, suggesting the deep toll the pandemic has already taken.
To mark my 2025th 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 firstname.lastname@example.org for details
For anyone following my Platinum Service it lost 170 points yesterday and is now ahead by 7957 points for March, having made 2223 points in February, 2142 points in January, 818 points in December, 780 points in November, 1649 points in October, 1620 points in September and 2387 points in August 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 Index gained 9.4%, closing at a price of 2447 after rising 210 Handles.
The Dow Jones Industrial Average had its best day since 1933 closing 2113 points higher (+11.37%) at 20,705.
The German DAX had its best day since 2008 closing 10.1% higher at 9650.
The Stoxx Europe 600 Index increased 8.4%.
The MSCI Asia Pacific Index surged 4.9%.
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index sank 0.7%.
The Euro increased 0.4% to $1.0772.
The British Pound climbed 1.7% to $1.1743.
The Japanese Yen slipped 0.3% to 111.51 per dollar.
The yield on 10-year Treasuries increased six basis points to 0.85%.
Germany’s 10-year yield advanced five basis points to -0.322%.
Britain’s 10-year yield rose five basis points to 0.479%.
Gold increased 4.6% to $1,625.32 an ounce.
West Texas Intermediate crude gained 2.3% to $23.89 a barrel.
This morning on the Economic Front we already had the release of UK CPI which came in as expected with a rise of 1.7%. At 9.00 am we have the German IFO Survey. This is followed at 12.30 pm by U.S. Durable Goods Orders, Finally, at 1.00 pm we have the Housing Price Index.
June S&P 500
Thankfully we had no sell level in the S&P yesterday with the market trading 225 Handles higher from where I marked prices 24 hours ago. If you compare this crash to 1929 then it looks like Monday’s 2170 low in the S&P is the initial low. Back then we had a 70% rally before we got the real Crash in 1932. A 50% rally off the 2170 low will see the S&P rebound to 2782 while a 70% rally gives a target level of 3026. For members who are offside on their pensions I would suggest lightening your portfolio on any move higher to 2800/3000, because if history repeats itself then we should see a more aggressive move lower to at least 1650/1800 after this rally plays out. Today I will move my buy level higher to 2390/2420 with a 2368 stop. The next major resistance for the S&P is from 2640/2700 where I will look to set shorts with a tight 2725 stop.
No Change as I am still a seller on any rally higher to 1.0940/1.1010 with a 1.1055 stop. The Euro just missed my initial 1.0720 buy level yesterday before rallying overnight. Today I will raise my buy level slightly to 1.0680/1.0730 with a higher 1.0635 stop.
June Dollar Index
I am still flat the Dollar. We have support from 100.50/101.10 where I will be a buyer with a 100.05 stop.
The DAX is now trading almost 25% higher from its 8100 low last week. After having its best day since 2008, closing 10.1% higher yesterday, the DAX is up 4% already this morning as we are back trading above 10,000. Looking at the Monthly Chart the DAX has strong resistance from 10330/10550. I will be a seller in this area with a 10650 stop. The DAX has short support from 9580/9730 where I will be a buyer with a 9495 stop.
The FTSE also had its best trading day since 2008, closing 7.5% higher last night. It is up another 3.5% this morning. Bear Market rallies are sharp as I have outlined in my Dow Commentary below. The FTSE has resistance from 5630/5730 where I will be a seller with a 5825 stop. My only interest in buying the market is on a dip lower to 5150/5230 with a 5085 stop.
Dow Rolling Contract
Bear Markets have three stages – Sharp Down, Reflexive Rebound and a drawn-out Fundamental Downtrend.
1.Bear Markets often start with a sharp and swift decline or plunge as we have just witnessed over the past five weeks.
2.After this decline, there is an Oversold Bounce following that decline. This is the phase that we are now in.
3.The longer-term Decline then continues, at a slower and more grinding pace, as the fundamentals deteriorate.
The Dow Theory also suggests that Bear Markets consist of three Down legs with Reflexive Rebounds in between.
Phase one of this sell-off has been brutal.
We are now in phase two reflexive bounce. For many individuals, they will feel like they are safe and the worse is over. This is how Bear Market rallies lure investors back in just before they are mauled again in Phase three.
The Dow closed February with a bearish outside month at the all time high. It has been above the 55 Month Moving Average on a monthly closing basis for 8 ½ years. This level is at 22,562 and a monthly close below here next Tuesday, if seen would suggest a test of the 200 month moving average which comes in at 15,149. I expect that after whatever retracement is put in that the market will test long-term support at 15,300/16000 before we see a more sustainable bottom.
Short-term the Dow has resistance from 22100/22500 where I will be a seller with a 22750 stop. The Dow left a huge ‘’Open Gap’’ yesterday and is on course to leave another one today as we are already trading 650 points above last night’s 20,705 close. Today I will be a buyer from 20600/20750 with a 20445 stop. Yesterday my Dow plan did not work well as after I sold the market at 20025, I was stopped out of this position at 20305 and I am now flat.
My NASDAQ plan worked well as after the market hit my 7500 sell level, we sold off to my 7390 T/P level and I am now flat. The break and close over 7450 is short-term bullish and today I will be a buyer from 7450/7580 with a tight 7370 stop. The NASDAQ has strong resistance from 7950/8100 where I will be an aggressive seller with a 8230 stop.
In the last 20 minutes the Bund has sold off to my buy range. I have gone long at 169.75. I will look to add to this trade at 169.15 with a now lower 168.80 stop. I will lower my T/P level to 170.25 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
No Change as I am still staying away from this market until volatility decreases.
Silver Rolling Contract
Silver has now rallied 25% since last week’s 11.62 low. I am still flat and today I will raise my buy level to 13.40/13.80 with a 12.95 tight stop.