U.S. Equity markets surged again, finishing the day higher led by the Dow which closed +2.05% while the S&P finished 1.78% higher. Markets rose as the focus shifted to the 2020 presidential election. Democratic nominee Joe Biden continues to maintain his lead in national polls over President Donald Trump, spurring hopes for a blue wave and a large Stimulus package approval after the election. By the time you read my Daily Commentary you will know who won the election. In terms of Economic Data, Factory Orders beat estimates, driven by demand for computers and other electronic products. This is another good sign for the economic recovery. On the COVID-19 front, Massachusetts introduced new restrictions in an attempt to halt the spread of the virus. Meanwhile, European Indices also closed higher. National governments are adopting mass Coronavirus testing in an effort to isolate and contain the resurgence in infections. The Italian government was said to be readying another $1.76 billion in funding for businesses as it prepared to introduce new regional lockdown measures. Russia’s Oil Minister Alexander Novak met with local companies to discuss the delay of production increases planned for January. Elsewhere, Oil closed 2.74% higher as Crude rose with risk assets, while the Dollar closed 0.5% weaker. Just as I head to bed, Trump has won Florida and is on course to be re-elected. The S&P is trading 60 Handles higher on this news while the Dollar is stronger.
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The S&P 500 closed 1.78% higher at a price of 3369.
The Dow Jones Industrial Average closed 554 points higher for a 2.05% gain at a price of 27,480.
The NASDAQ 100 closed 1.76% higher at a price of 11,279.
The Stoxx Europe 600 Index closed 0.9% higher.
The MSCI Asia Pacific Index fell 0.5%%.
Yesterday the Nikkei closed 1.39% higher at a price of 23,295.
The Bloomberg Dollar Spot Index closed 0.5% lower.
The Euro closed 0.5% lower at $1.1701.
The British Pound closed 0.8% higher at $1.3055.
The Japanese Yen closed 0.2% higher at 104.51 per dollar.
The yield on 10-year Treasuries closed two basis points higher at 0.90%.
Germany’s 10-year yield closed unchanged at -0.62%.
Britain’s 10-year yield closed two basis points higher at 0.29%.
The Bloomberg Commodity Index closed 1.2% higher.
West Texas Intermediate closed 2.31% higher at $37.66 a barrel.
Gold closed 0.83% higher at $1904 an ounce.
This morning on the Economic Front we have German, Euro-Zone and UK Markit Services PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed at 10.00 am by Euro-Zone PPI and at 12.00 pm by U.S MBA Mortgage Applications. At 1.30 pm we have the Trade Balance. Finally, at 3.00 pm we have ISM Services PMI.
December S&P 500
Thankfully we had no sell level in the S&P as market surged as expected to close the ‘’Open Gap’’ from October 27 at 3390. As I head to be Trump has won Florida and the S&P is now trading above its 50 Day MA at 3423, 100 Handles off it’s overnight low. The S&P has strong resistance from 3450/3470 where I will be a small seller with a 3486 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 3428. The S&P has support from 3300/3320 where I will be a buyer with a 3286 stop. If I am taken long I will have a T/P level at 3336.
My latest 1.1625 Euro position worked well with the market trading higher to my 1.1655 T/P level and I am now flat. The Euro hit an overnight high at 1.1770 before selling off on the Trump revival to sit at 1.1650 as I go to press. Today, I will again be a buyer from 1.1580/1.1625 with the same 1.1535 stop.
December Dollar Index
The Dollar rallied 0.5% yesterday. My Dollar plan worked well with the market hitting my 93.50 buy level before rallying to my 94.05 T/P level overnight and I am now flat. Today I will again be a buyer from 93.20/93.60 with a 92.85 stop. If I am taken long I will have a T/P level at 93.95.
I said countless times last week that the DAX was oversold and not to be short as the German Government would introduce more Stimulus. They have done this for businesses affected by Covid and here we are with the DAX trading 700 points higher than last week’s 11375 low print. I am still flat and I will now raise my buy level to 11750/11850 with a 11625 stop. I still do not want to be short the DAX at this time.
The FTSE just missed my 5640 buy level by a few points and I am still flat. I will now raise my buy level to 5630/5680 with a higher 5585 stop.
Dow Rolling Contract
I had the right idea of buying the dip in the Dow but frustratingly I have not been able to get a long position on board and I am still flat. The Dow has strong resistance at 27900 (50 Day MA) and I will be a small seller from 27850/28050 with a 28225 ‘’Closing Stop’’. Ahead of the election result I no longer want to be long the Dow at this time.
My NASDAQ plan worked well with the market trading higher to my 11320 sell level before falling to my 11275 revised T/P level and I am now flat. The NASDAQ has resistance from 11720/11850 where I will be a seller with a 11975 tight stop. I still do not want to be long the NASDAQ at this time.
The boring sideways action in the Bund continues and I am still flat. I will now lower my sell level to 176.45/176.95 with a lower 177.31 stop.
Gold Rolling Contract
I am still flat and I will now lower my buy level to 1850/1865 with a lower 1839 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 to 23.95 with the same 22.65 stop.