Stocks Power Higher

Although the fundamentals for Gold and Silver point to higher prices, it is important to know that the market can always stay irrational longer than you can stay solvent.

TrackRecord Trading

Published in

TRACKRECORD DAILY

6 min readNov 30, 2020

TRADING PLAN

Gold & Silver — Gold support is at 1780–90. Short term support for Silver is at 22.50–60 while major support is at 21.80–90. Supports in gold and silver are being tested despite the overall USD weakness against almost every other major currency. The price action is quite inexplicable given the disconnect between gold & silver with real yields, USD weakness and risk sentiment. If that should persist, position reduction is inevitable.

Key risks — Higher US interest rates and a stronger USD remain the main risks for now.

WHAT HAPPENED YESTERDAY

Market Movements as of New York Close 27 Nov 2020

Dollar index fell on Friday, hitting its lowest level in almost three months (91.76), after a stronger risk sentiment drove equity markets higher. The Dollar has fallen more than 2.2% so far this month as global market sentiment has surged following Joe Biden’s election victory and positive COVID-19 vaccine progress, which reduced demand for the safe-haven currency. The AUD hit its highest level (0.7401) since September as USD continued its recent weakening trend. GBP declined against the EUR (EUR/GBP +0.75%, 0.8982) as the European Union and Britain said there were still material disagreements over a Brexit trade deal as the EU chief negotiator prepared to travel to London in a last-ditch attempt to avoid a tumultuous finale to the five-year Brexit crisis.
The S&P 500 (+0.2%) and Nasdaq Composite (+0.9%) closed at fresh record highs on Friday in a shortened trading session. The Russell 2000 increased 0.6%, and the Dow Jones Industrial Average increased 0.1%.
A wide range of growth stocks outperformed, including Tesla (TSLA 585.76, +11.76, +2.1%), Moderna (MRNA 127.03, +17.85, +16.4%), Etsy (ETSY 160.55, +15.46, +10.7%), and many within the Philadelphia Semiconductor Index (+1.2%). Value and cyclical stocks, meanwhile, continued to take a breather from their incredible monthly performances.

HEADLINES:

U.S. VACCINES PLANS TAKE SHAPE BUT NO LET-UP ON RESTRICTIONS

U.S. health authorities will hold an emergency this next week to recommend that a coronavirus vaccine awaiting approval be given first to healthcare professionals and people in long-term care facilities.

The meeting, announced on Friday by a U.S. Centers for Disease Control and Prevention (CDC) committee on immunizations, suggests that the Food and Drug Administration (FDA) may be close to authorizing distribution of the long-awaited medication, at least to those considered most vulnerable.

United Airlines has begun moving shipments of the vaccine, developed by Pfizer Inc, on charter flights to ensure it can be quickly distributed once it is approved, according to a person familiar with the matter.

The CDC’s Advisory Committee on Immunization Practices will vote on Tuesday to recommend that the FDA allow healthcare professionals and long-term care facilities to be the first two groups to get initial vaccine supplies, a CDC spokeswoman said.

A green light for any vaccine would come as welcome news to Americans, whose political leaders have clamped under increasingly aggressive measures to curtail the spread of the virus.

Thematic Context: “Given the state of the virus situation, vaccine news and development will have an amplified effect on risk assets as the pandemic is in a state of “necessity”. Necessity that something be done, be it a 1. Vaccine Rollout or 2. Lockdown. The former is bullish for Industrials, Cyclicals and Energy, the latter should cause a macro dislocation initially with a selloff which we believe begets a faster response from the Fed and Government. The former seems to be a more palatable option for governments and we believe they will do what they can to achieve that.” — 26th Nov 2020

“Global logistics is key to getting the population vaccinated and markets will eventually focus on the efficacy of the distribution channels.” — 27th Nov 2020

BREXIT GOES DOWN TO THE WIRE: EU AND UK SAY BIG DIFFERENCES REMAIN

The European Union and Britain said on Friday there were still substantial differences over a Brexit trade deal as the EU chief negotiator prepared to travel to London in a last-ditch attempt to avoid a tumultuous finale to the five-year Brexit crisis.

With just five weeks left until the United Kingdom finally exits the EU’s orbit on Dec. 31, both sides are calling on the other to compromise on the three main issues of contention — fishing, state aid and how to resolve any future disputes.

The two sides are trying to strike a trade deal on goods that would safeguard nearly $1 trillion in annual trade and buttress peace in British-ruled Northern Ireland.

The latter is a priority for U.S. President-elect Joe Biden, who has warned Johnson he must uphold the 1998 U.S.-brokered Good Friday Agreement that ended three decades of sectarian conflict in Northern Ireland.

KILLING OF SUSPECTED IRANIAN NUCLEAR MASTERMIND RISKS CONFRONTATION AS TRUMP EXITS

An Iranian scientist long suspected by the West of masterminding a secret nuclear bomb programme was killed in an ambush near Tehran on Friday that could provoke confrontation between Iran and its foes in the last weeks of Donald Trump’s presidency.

The military adviser to Supreme Leader Ayatollah Ali Khamenei vowed to “strike as thunder at the killers of this oppressed martyr”. “In the last days of the political life of their … ally (Trump), the Zionists seek to intensify pressure on Iran and create a full-blown war,” Hossein Dehghan tweeted.

Trump, who lost his re-election bid to Biden on Nov. 3 and leaves office on Jan. 20, pulled the United States from a deal reached under Obama, his predecessor, that lifted sanctions on Iran in return for curbs on its nuclear programme.

Biden has said he will aim to restore that agreement, although many analysts say this will be a challenging goal.

During the final months of Trump’s presidency, Israel has been making peace with Gulf Arab states that share hostility towards Iran.

Last week, Netanyahu travelled to Saudi Arabia and met its crown prince, an Israeli official said, in what would be the first publicly confirmed visit by an Israeli leader. Israeli media said they were joined by U.S. Secretary of State Mike Pompeo.

Thematic Context: “After the UAE’s pivot towards the U.S. and Israel, this just became more sensitive. Iran has always been a political proxy chess piece for a U.S.-Russian standoff, the key thing to note now is that China has entered the fray and with an Iranian bias. The implications are not so much as to the sanction, but the geopolitical strain that will aggravate existing issues between the “three superpowers — U.S., Russian & China”. As a result, watchout for ratcheting of South China Sea tensions, faster push for Dual-Hegemonic Factions, issues over Gas Pipelines (Nordstream) and etc. The breakdown of world order and cooperation is beneficial for Gold, Silver & Bitcoin” — 13th Aug 2020

WEEK AHEAD

It’s NFP week and as investors battle the vaccine optimism against the short-term gloom, the latest jobs report from the United States may determine which way sentiment sways next. Canada will also publish jobs numbers along with its Q3 GDP print. The Reserve Bank of Australia, meanwhile, will kick off the December round of central bank meetings. In Europe, flash inflation figures will be watched in anticipation of the ECB’s next move. But amidst the busy economic calendar, it’s Brexit and an OPEC+ meeting that have the potential to produce the most volatility.