On 29/11/2021 TraderTalent.com is bringing you another guest post from Bryan Noble.
U.S. Equity Markets got slammed on Friday after a new COVID 19 strain named Omicron emerged in South Africa, causing the British government to ban flights from the region, and sparking global growth concerns. The Dow led the decline as stocks suffered their worst ‘’Black Friday’’ selloff in 70 Years, closing lower by 2.53%. The VIX surged 54% on this news, closing at a price of 28.62. The World Health Organisation said the new variant has more spike protein mutations, which could make it more resistant to vaccines. This warning stoked global growth concerns, so investors sold out of risk assets. There was also negative news on COVID-19 treatments – in its final analysis, Merck said that its COVID-19 treatment pill was only 30% effective. That is below the 50% efficacy rate seen in earlier trials. So, these fears that COVID-19 treatments may not work as well as previously thought hurt sentiment. Within the S&P 500, all 11 sectors finished lower. European Markets declined hard. European Commission President Ursula von der Leyen said the European Union was looking to follow the U.K. in banning flights from South Africa. British automobile production fell 41.4% in October, hitting a 65-year low as supply-chain constraints continue to impact manufacturing. European Central Bank Governing Council member Ignazio Visco said Europe’s COVID situation is once again getting close to becoming a cause for alarm. In Asia, the Japanese government increased border controls with South Africa and five other African countries, requiring individuals to undergo a 10-day quarantine in predetermined facilities. India’s government sent out an advisory telling its States to thoroughly test all visitors from South Africa or any other nations considered to be at risk for the new COVID-19 variant. The Bank of Korea raised Interest Rates from 0.75% to 1%, as expected, saying it will continue to normalise monetary policy as the economy rebounds. Chinese regulators requested that ride-sharing service DiDi delist from the New York Stock Exchange. Elsewhere, Oil closed 12.51% lower as a new COVID-19 strain stoked global growth concerns, hurting the demand outlook for crude, while Bitcoin fell 6% along with other risk assets.
To mark my 2425th 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 [email protected] for details
For anyone following my Platinum Service it lost 60 points last Friday, and is now ahead by 1368 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 2.27% lower at a price of 4594.
The Dow Jones Industrial Average closed 905 points lower for a 2.53% loss at a price of 34,899.
The NASDAQ 100 closed 2.09% lower at a price of 16,025.
The Stoxx Europe 600 Index closed 3.7% lower.
Last Friday, the MSCI Asia Pacific Index fell 2.5%.
Last Friday, the Nikkei closed 2.53% lower at a price of 28,751.
The Bloomberg Dollar Spot Index closed 0.8% lower.
The Euro closed 0.8% higher at $1.1301.
The British Pound closed 0.1% lower at 1.3321.
The Japanese Yen rose 1.8%, closing at $113.26.
Germany’s 10-year yield closed nine basis points lower at -0.34%.
Britain’s 10-year yield closed 14 basis points lower at 0.83%.
US 10 Year Treasury closed 15 basis points lower at 1.48%.
West Texas Intermediate crude closed 12.51% lower at $68.49 a barrel
Gold closed 0.10% higher at $1,792.10 an ounce.
This morning on the Economic Front we have U.K. Money Supply, Mortgage Applications and Consumer Credit at 9.30 am. This is followed by Euro-Zone Sentiment Indicator at 10.00 am and German CPI at 1.00 pm. We have U.S. Pending Home Sales at 3.00 pm and the Dallas Fed Manufacturing Business Index at 3.30 pm. Finally, Fed Chair Powell is due to speak at 8.05 pm, but given Friday’s carnage I would not be surprised if he was out on the newswires earlier trying to calm markets.
December S&P 500
While the Dow had it worst daily trading loss since October 2020, both the S&P and NASDAQ only suffered their biggest loss since September last. Friday’s sell-off was exaggerated by the absence of traders due to the abbreviated session for the Thanksgiving Holiday. Hopefully by the time you got to read Friday’s Daily Commentary, the markets were trading below both my buy ranges and stop for the Dow and S&P. As I am still in Florida, I bought the S&P at the bottom of my buy range when I returned home for dinner at a price of 4657 before quickly stopping myself out of this position at 4645 before going to bed and I am still flat. Incredibly, the S&P is now oversold having only made a new Contract high last Monday at 4740. Internally the market is very weak as shown by the McClellan Oscillator which closed at -234. Normally readings of -230 and lower are met by ferocious rallies. I think the markets have over- reacted to Friday’s news and I have no doubt we will see Central Banks try and support the markets today The S&P has left a large 70 Handle Gap to Thursday’s 4705 closing price and I would expect some of this gap to be filled over the coming days. As I go to press the S&P has rallied 50 Handles off last Friday’s after hours low which is no surprise given the MO reading. The S&P has strong resistance from 4655/4670 where I will be a small seller with a 4685 ”Closing Stop”. We have has strong support from September’s 4550 previous all-time high. I will be an aggressive buyer from 4552/4572 with a 4529 wider ‘’Closing Stop’’. If I am taken short I will have a T/P level at 4642. If I am taken long I will have a T/P level at 4588
My long Euro position worked well with the market rallying to my 1.1260 T/P level on last week’s 1.1220 long position and I am now flat. This move higher showed what a good indicator the Daily Sentiment Indicator is especially when we have single digit readings. Today, I will again be a buyer from 11190/1.1250 with a 1.1145 stop. If I am taken long I will have a T/P level at 1.1285.
December Dollar Index
The Dollar reversed trend as expected with the Dollar having its weakest session in over a month, falling nearly 1%. This move lower saw my 95.30 T/P level filled on my 95.50 short position and I am now flat. Today, I will again be a seller from 95.50/97.00 with a 97.35 stop. If I am taken short I will have a T/P level at 95.15.
The Euro Stoxx 600 closed 3.7% lower on Friday, while the German DAX fell 4.2% on what was the worst trading session for European Indices since June 2020. It was a bloodbath as thankfully we had no buy levels across any of the European Indices. Friday’s move leaves the DAX oversold and due a bounce once we get the margin selling out of the way. The DAX has short-term support from 14900/15050 where I will be a buyer with a 14795 stop. If I am taken long I will have a T/P level at 15120.
The FTSE fell a huge 300 points on Friday, a massive one day move for the UK Market, as the FTSE closed below 7000. We have support from 6960/7020 where I will be a buyer with a 6885 wider stop. I do not want to be short the FTSE at this time. If I am taken long I will have a T/P level at 7060.
Dow Rolling Contract
The Dow having its worst trading session in 13 months was the key to Friday’s half-day session leading to a 90.1% in down volume. With Lagarde already out on the wires late Sunday, I would expect similar comments from Fed Chair Powell as both Central Banks cannot allow a crash to happen on their watch given the massive QE policy over the last 12 years. The 200-Day Moving Average for the Dow comes in at 34315 and I would expect a decent rebound on any test especially with the MO closing at -234 as mentioned in my S&P Commentary above. In my late update to my Platinum Members I mentioned that the 34320 area will act as strong support. If you follow the IG Weekend Index pricing , the Dow traded a few times to test the 34300 support level before rallying. If you did manage to buy at this area I would take my 800 point gain here and go flat. Today, I will be an aggressive buyer from 34550/34750 with a 34395 wider ‘’Closing Stop’’. The Dow has resistance at the 50-Day MA (35,261) Where I will be a small seller from 35270/35450 with a tight 35605 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 34890. If I am taken short I will have a T/P level at 35145.
The 16- basis point fall in 10-year Treasuries stopped the NDX from falling further on Friday. The NASDAQ has support from 15750/15880 where I will be an aggressive buyer with a 15595 wider ‘’Closing Stop’’ The NDX has resistance from 16290/16390 where I will be a small seller with a 16505 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 15970. If I am taken short I will have a T/P level at 16220.
Thankfully we had no sell level in the Bund as the market rallied 140 points on Friday, closing at the high of the day at a price of 172.45. The Bund has resistance from 172.95/173.45 where I will be a seller with a 174.05 stop. If I am taken short I will have a T/P level at 172.60.
Gold Rolling Contract
Gold traded in a wild range over the past two sessions and I am still flat. We have support from 1753/1768 where I will be a buyer with a 1739 stop. If I am taken long I will have a T/P level at 1777.
Silver Rolling Contract
Silver traded lower to my 23.05 buy level. I am still long with a lower 23.40 T/P level. I will add to this trade at 22.45 while leaving my 21.95 stop unchanged.
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