On 23/11/2021 TraderTalent.com is bringing you another guest post from Bryan Noble.
A volatile start to Thanksgiving Week for U.S. Equity Markets, as the Dow sold off 300 points into the close after President Biden announced that Jerome Powell will remain as Fed Chairman. The NDX led the decline, closing lower by 1.13% as the VIX ended yesterday’s session with a gain of 7%. President Joe Biden said he would nominate Federal Reserve Chair Jerome Powell to stay in his post, while promoting current Fed Governor Lael Brainard to Vice Chair. This did away with any uncertainty over the central bank’s future makeup. And it should keep the Fed’s policy decisions in line with what we’ve seen recently. In terms of economic data, Existing Home Sales rose to a nine-month high in October, showing that housing market demand remains resilient. It’s going to be a relatively quiet week – with U.S. markets closed on Thursday and a half day on Friday. But there still are things to look forward to… IHS Markit releases its global preliminary manufacturing purchasing managers’ index (“PMI”) data for November later this week, giving a “real time” update on the health of the supply chain. Meanwhile Biden will give a speech this afternoon on the state of the economy and his plans to lower prices. European Markets closed lower. In its monthly report for October, Germany’s Bundesbank warned fourth-quarter economic activity could significantly weaken and inflation is likely to stay above 3% for some time. German States began to reintroduce COVID restrictions ahead of a meeting of Health Ministers today, as the government was said to consider a vaccine mandate beginning in 2022. Investors are going to be on the lookout for any central bank policy clues this week, as there are a slew of European Central Bank policymakers speaking. In Asia, China’s National Development and Reform Commission said the country’s coal stocks at ports and utilities have increased quickly, easing power supply concerns. The People’s Bank of China removed language regarding “maintaining monetary policy” from its recent quarterly outlook, a move said to signal it may soon increase stimulus. Japan’s Prime Minister Fumio Kishida said the government was considering releasing oil reserves into the open market in an attempt to lower crude prices. South Korea’s preliminary export value for November increased from October, as semiconductor shipments abroad jumped 325%. Elsewhere, Oil rose 0.62% despite the U.S. and several other countries are reportedly considering releasing crude from their emergency reserves to lower oil prices, while Gold fell 2.55% on Dollar strength.
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For anyone following my Platinum Service it made 465 points yesterday, and is now ahead by 1453 points for November, after ending October with a gain of 1028 points, 2866 points in September, 1543 points in August, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, having ended March with an impressive gain of 3769 points, 3286 points in February, 2077 points in January, and 2273 points last December. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
The S&P 500 closed 0.32% lower at a price of 4682.
The Dow Jones Industrial Average closed 17 points higher for a 0.05% gain at a price of 35,619.
The NASDAQ 100 closed 1.16% lower at a price of 16,380.
The Stoxx Europe 600 Index closed 0.9% lower.
Yesterday, the MSCI Asia Pacific Index rose 0.2%.
Yesterday, the Nikkei closed 0.10% higher at a price of 29,774.
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.4% lower at $1.1245.
The British Pound closed 0.4% lower at 1.3391.
The Japanese Yen fell 0.7%, closing at $114.86.
Germany’s 10-year yield closed five basis points higher at -0.29%.
Britain’s 10-year yield closed six basis points higher at 0.94%.
US 10 Year Treasury closed nine basis points higher at 1.63%.
West Texas Intermediate crude closed 0.62% higher at $76.05 a barrel.
Gold closed 2.55% lower at $1,806.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone, UK and U.S. Markit Services PMI at 8.55 am, 9.00 am, 9.30 am and 2.45 pm respectively. Finally, we have the Richmond Fed Manufacturing Index at 3.00 pm.
December S&P 500
The VIX closed above both its 50 and 200-day Moving Averages after rising 7% yesterday, closing at 19.17. This could be significant as the VIX never broke lower despite U.S. Indexes making new high after new high over the past few weeks. The VIX has left an ‘’Open Gap’’ from last year at a price of 45. If the VIX decides to break higher and chase this Gap then we will have a possible Stock Market Crash on our hands. As I have said countless times over the past few weeks, the level of complacency is off the charts and that absolutely no one is expecting a sell-off. Yesterday’s 300- point decline in the Dow in the last 50 minutes of trading could be the start of something nasty. My S&P plan worked well as the market traded the whole of my sell range, hitting a new all-time high of 4738, for a 4717 average short position before selling off to my 4698 T/P level and I am now flat. Seasonally, Thanksgiving Week is one of the strongest for U.S Indexes of the year. The S&P has resistance from 4701/4718 where I will again be a seller with a 4735 ‘’Closing Stop’’. I will now lower my buy level to 4632/4647 with a lower 4617 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 4690. If I am taken long I will have a T/P level at 4659.
The Euro got hit hard again yesterday, making new lows for the year at a price of 1.1230. Bearish sentiment remains extreme which is compatible with a decline that is at or near an end. The Euro hit my buy level at 1.1240. I will continue to look to add to this position at 1.1180 while leaving my 1.1135 stop unchanged. I will now lower my T/P level on this trade to 1.1275.
December Dollar Index
Just before the New York close, the Dollar traded higher to my 96.50 sell level. I will add to this trade at 97.00 while leaving my 97.35 stop unchanged. I will now raise my T/P level to 96.15.
I am still flat the DAX as yet again the market traded heavy for most of yesterday’s session. I will now lower my sell level to 16210/16280 with a 16355 stop. I still do not want to be long the DAX at this time. If I am taken short I will have a T/P level at 16170.
My FTSE plan worked well with the market trading higher to my 7250 sell level before hitting my 7220 T/P level and I am now flat. Today, I will again be a seller from 7290/7340 with a 7375 tight stop. If I am taken short I will have a T/P level at 7260.
Dow Rolling Contract
The Dow rallied to my 35710 T/P level on Friday’s 35610 average long position and I am now flat. The Dow continued to rally, hitting a high at 35930 at 8.10 pm, before falling 300 points into the close. This was a nasty sell-off. If the Dow can break and close below 35500 then we could well see an acceleration to the downside. The Dow has resistance from 35800/35950 where I will be a small seller with a 36105 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 35670.
The NDX rallied to a new all-time high, hitting my second sell level at 16700 for a 16655 average short position. The market subsequently fell almost 300 points, enabling me to cover this position at my 16545 T/P level and I am now flat. The NDX has resistance from 16510/16610 where I will again be a seller with a 16705 ‘’Closing Stop’’. I still do not want to be long the NDX at this time. If I am taken short I will have a T/P level at 16440.
My Bund plan worked well with the market trading higher to my 17250 sell level before selling off to my 172.15 T/P level and I am now flat. The sell-off continued as the market reversed most of Friday’s gains, closing at 171.75. The Bund has resistance from 172.30/172.80 where I will again be a seller with a 173.15 stop. If I am taken short I will have a T/P level at 172.00.
Gold Rolling Contract
My suspicions about buying Gold came through yesterday as the market fell $50, and in the process closed below the key 1825 pivot point. This move lower has me long at an average price of 1819. I will now lower my T/P level to 1824 while also lowering my stop to 1799.
Silver Rolling Contract
Silver hit my 24.20 buy level. I am still long with a now lower 24.45 T/P level. I will now raise my stop on this position to 23.55.
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