Equity Markets continued their positive start to this holiday-shortened week, finishing the day higher, with the Dow and S&P closing at new all-time highs. The Trump administration called on the General Services Administration to assist in the formal transition process, recognising Joe Biden as the winner of the Presidential Election. This erased any real fears of political uncertainty in the coming months. In terms of a COVID-19 vaccine, optimism remains elevated after positive data in the past two weeks. The Food and Drug Administration (“FDA”) said its Vaccines and Related Biological Products Advisory Committee will review the emergency use authorisation (“EUA”) application from Pfizer and BioNTech on December 10. This sparked optimism that rollout could happen before the end of the year. Economic data fell short of estimates, with Consumer Confidence and the Richmond Fed Index missing the mark. But this was overshadowed by the optimism on Wall Street. European Indices again closed higher. European Central Bank Governing Council member Ollie Rehn backed the use of more Quantitative Easing to support the regional economy. Germany’s Ifo Institute said Business Confidence fell in November, adding this likely means the country’s economy will contract in the Fourth Quarter. But the Deputy Head of Germany’s ruling Christian Democratic Union party said the country can “comfortably afford” to provide business aid well into next year. French Business Confidence data for November was better than expected, but hit a five-month low, implying the need for additional stimulus measures. Elsewhere, Gold continued it’s recent sell-off, closing 1.76% lower, as investors rotated into risk assets, like stocks. Meanwhile Oil exploded to the upside, closing 4.18% higher, on hopes that a COVID-19 vaccine would lead to an increase in crude demand.
To mark my 2200th 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 was flat yesterday and is still ahead by 1701 points for November having made 2779 points in October, 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 1.62%% higher at a price of 3635.
The Dow Jones Industrial Average closed 455 points higher for a 1.54% gain at a price of 30,046.
The NASDAQ 100 closed 1.46% higher at a price of 12,079.
The Stoxx Europe 600 Index closed 0.8% higher.
The MSCI Asia Pacific Index fell 0.5%.
Yesterday the Nikkei closed 2.50% higher at a price of 26,165.
The Bloomberg Dollar Spot Index closed 0.3% lower.
The Euro closed 0.4% higher at $1.1882.
The British Pound closed 0.3% higher at $1.3361.
The Japanese Yen closed 0.1% higher at 104.38 per dollar.
The yield on 10-year Treasuries closed two basis points higher at 0.88%.
Germany’s 10-year yield closed two basis points higher at -0.56%.
Britain’s 10-year yield closed one basis point higher at 0.34%.
The Bloomberg Commodity Index closed 0.3% higher.
West Texas Intermediate closed 4.18% higher at $44.54 a barrel.
Gold closed 1.76% lower at $1798 an ounce.
This morning on the Economic Front we have no data of note due from either the UK or the Euro-Zone. At 12.00 pm we have U.S MBA Mortgage Applications. This is followed at 1.30 pm by Weekly Jobless Claims, GDP, Wholesale Inventories, Trade Balance, PCE and Durable Goods Orders. At 3.00 pm we have Personal Income/Spending, New Home Sales and the University of Michigan Consumer Sentiment. Finally, we have the FOMC Minutes at 7.00 pm.
December S&P 500
The S&P has now rallied over 110 Handles since Friday’s late sell-off as the theme of this week being one of the strongest of the year continuing. We are now in nose-bleed territory for most stocks. The S&P has now risen 15% this month alone and is up nearly 23% since the September lows as sentiment hits the roof. Where I am in Florida, property prices have risen almost 30% since March with house sales going under contract within a few days of being listed. People are piling into risk and stocks no matter what the valuation. This will not end well. The Monthly Candle for Small Cap Stocks shows the largest upside Candle in history and is now trading above its Monthly Bollinger Band. If anything, this Candle looks similar to the capitulation Candle we saw last March. This is not normal trading especially given the number of ‘’Open Gaps’’ since the October 30 low at 3200 The S&P has resistance from 3670/3690 where I will be a seller with a 3708 stop. I no longer want to be long the S&P at this time.
I am still flat the Euro as the market rallied from the time I posted early this morning. I will now raise my buy level to 1.1805/1.1855 with a 1.1765 stop.
December Dollar Index
The Dollar traded lower to my 92.20 buy level before falling short of my 92.55 T/P level with a 92.51 high print. I am still long and I will now lower my T/P level to 92.40 with a now higher 91.75 stop.
Promise of more Stimulus saw the DAX rally 250 points yesterday and I am still flat as thankfully we had no sell level in the market. The DAX has resistance from 13470/13550 where I will be a seller with a 13625 tight stop.
The FTSE traded the whole of my sell range for a 6415 average short position. I will leave my 6481 stop unchanged while raising my T/P level to 6380.
Dow Rolling Contract
The Dow has now rallied12,000 points since the March low, closing above 30,000 for the first time as yet again anyone short the market is slammed. I am still flat and I will now raise my buy level to 29550/29750 with a 29395 stop. Ahead of the Thanksgiving Holiday I still do not want to be short the Dow at this time.
Shortly after the US Markets opened the NASDAQ surged and I am now short at an average rate of 12080. I will add to this trade gain at 12180 with a now higher 12235 stop. I will also raise my T/P level to 12020 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 I will now lower my sell level to 175.50/175.90 with a lower 176.25 stop. If I am taken short I will have a T/P level at 175.15.
Gold Rolling Contract
Thankfully we exited any long Gold position for a small loss on Monday at 1833, with Gold continued its recent sell-off, hitting an intra-day low of 1790. Gold has strong support from 1760/1775 where I will be an aggressive buyer with a 1747 stop. If I am taken long I will have a T/P level at 1787.
Silver Rolling Contract
No Change as I am still long at 23.50 with the same 23.75 T/P level. I will add to this position at 22.90 with a now lower 22.65 stop.