American Indexes closed flat yesterday following a volatile trading session that provided plenty of two-way price action. Just when it looked like the S&P would test the 4200 major support level the market recovered to close unchanged with a 50 Handle rally off the lows. The late rally saw the VIX close lower by 3.80% at 18.22. U.S. Consumer Confidence for September has fallen to its lowest level in four months, largely due to a glum outlook for the economy and job market. The Conference Board’s Consumer Confidence Index dropped more than expected – from the revised 108.7 reading in August to this month’s reading of 103. The Expectations Index – a six-month measure of consumer outlook – also fell, reaching its lowest level since May. The Index reading also fell below 80, the historical threshold that suggests a possible recession in the next year. Consumers surveyed were mainly worried about rising food and gas prices, particularly in food and gas, as well as “the political situation and higher interest rates.” Despite economists’ optimism of an economic “soft landing” by the Federal Reserve, the report showed an uptick in the number of respondents who believe a recession is likely to happen. A spike in mortgage rates sent sales of new single-family homes plummeting 8.7% in August, falling to an annual rate of 675,000 units. August’s reading came significantly lower than the anticipated decline to a rate of 700,000 units. While sales continued to benefit from a shortage of pre-owned homes, sky-high mortgage rates have pushed many potential homebuyers to reconsider purchasing. However, buyers saw slight relief in prices for August, with the median new home price contracting 2.3% from this time last year. Costco (COST) exceeded Wall Street’s earnings expectations after the bell on Tuesday – reporting earnings-per-share of $4.86 on revenue of $78.9 billion. The membership-based retailer confirmed a growing trend among retail rivals, including Walmart (WMT) and Target (TGT) that consumer purchases are growing increasingly reliant on groceries. CFO Richard Galanti reported a 5.2% rise in global store traffic, but a nearly 4% drop in average transaction amount as consumers continue to limit large discretionary purchases. The retailer also noted that membership renewal remains strong due to bulk savings driving consumer spending habits. Amazon (AMZN) is monopolising online marketplace services, according to a lawsuit filed on Tuesday by the U.S. Federal Trade Commission (“FTC”). The complaint accused the e-commerce titan of forcing sellers to use its logistics and delivery services in exchange for preferential treatment as well as shutting out the competition in online marketplace services. This marks the FTC’s fourth lawsuit against Amazon this year and highlights the government’s increasing concerns about the centralisation of corporate power and equality in online commerce. Tesla (TSLA) has moved into the spotlight of the European Union’s (“EU”) anti-subsidy investigation of Chinese electric vehicles (“EV”). The probe seeks to uncover if China subsidised Tesla and Chinese EV manufacturers, the extent of that subsidisation, and if offsetting measures need to be enacted. Tesla has sold nearly 93,000 Chinese-made vehicles in Europe in the first seven months of 2023 – or 47% of its total deliveries. The U.S. EV-maker will now have a target on its back as the EU continues its investigation to level the EV playing field in Western Europe. European Markets again closed lower. Five Economic Institutes across Germany and Austria predict that Germany’s gross domestic product (“GDP”) will contract by 0.6% in 2023. This marks a significant downgrade from the estimate of a 0.3% growth from the spring. The revision is due to rising interest rates and high inflation, which are expected to dampen consumer spending. Although GDP is forecasted to shrink by year-end, it is expected to rebound next year. Additionally, the reports estimate that inflation for 2023 will stay elevated at 6.1% but will drop to 2.6% in 2024. According to a Reuters poll of economists, the Bank of England (“BOE”) is expected to leave its benchmark interest rate of 5.25% unchanged until at least July 2024. This follows the central bank’s unexpected move last week when it kept its rate steady and mentioned a “higher for longer” approach. While a significant majority of the polled economists believe that rates will remain consistent at the bank’s November meeting, roughly 25% of respondents predict a final 25-basis-point hike to 5.50%. The BOE has emphasised the importance of duration for increased rates. However, a slowed economy and unexpected drop in inflation continue to cloud the bank’s next decision. In Asia, the Nikkei closed lower by 1.54% this morning. The Nikkei has now fallen over 5% in the past week. Elsewhere, Oil surged, closing 3.64% higher while a stronger U.S. Dollar saw Gold fall 1.2%.
To mark my 2875th 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 bryan@tradernoble.com for details
For anyone following my Platinum Service it made 228 points yesterday and is now down by 169 points for September, after finishing August with 1485 points gain following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Equities
The S&P 500 closed 0.02% higher at a price of 4275.
The Dow Jones Industrial Average closed 68 points lower for a 0.20% loss at a price of 33,550.
The NASDAQ 100 closed 0.24% higher at a price of 14,580.
The Stoxx Europe 600 Index closed 0.23% lower.
This morning, the MSCI Asia Pacific closed 0.5% lower.
This morning, the Nikkei closed 1.54% lower at a price of 31,872.
Currencies
The Bloomberg Dollar Spot Index closed 0.35% higher.
The Euro closed 0.6% lower at $1.0505.
The British Pound closed 0.2% lower at 121.30.
The Japanese Yen fell 0.3% closing at $149.51.
Bonds
Germany’s 10-year yield closed 3 basis points higher at 2.85%.
Britain’s 10-year yield closed 3 basis points higher at 4.33%.
U.S.10 Year Treasury closed 6 basis points higher at 4.61%.
Commodities
West Texas Intermediate crude closed 3.64% higher at $93.68 a barrel.
Gold closed 1.2% lower at $1874.10 an ounce.
This morning on the Economic Front we have Euro-Zone Economic Sentiment Indicator and Business Climate at 10.00 am. Next, we have German CPI at 1.00 pm followed by U.S. GDP and Weekly Jobless Claims at 1.30 pm. Finally, we have Pending Home Sales at 3.00 pm and the Kansas City Fed Manufacturing Index at 4.00 pm. Meanwhile, Fed Members Goolsbee and Cook are speaking at 2.00 pm and 6.00 pm respectively ahead of Fed Chair Powell who is due to speak just before the close at 9.00 pm.
Cash S&P 500
There is no doubt that the continued rise in Treasury Yields and the U.S. Dollar are the dominant force in markets. Both of these charts are starting to defy credulity in their unprecedented rises. It is historic on many levels with the Dollar now higher for 11 consecutive weeks. This combo makes the tape extremely challenging and is overpowering my signal charts at this time. However, this does not change the outlook that a violent snapback can occur at any time. For this sell-off to continue the Bears need both the Dollar and Bond Yields to become even more extreme. Yesterday was a challenge especially when the S&P hit a late afternoon low at 4239. At this price the S&P was deep outside its Daily Bollinger Band having fallen over 220 Handles since Fed Chair Powell’s press conference last Wednesday. The S&P is now even more oversold than where we were last September with the $BPSPX RSI closing at 14 last night. Incredibly the McClellan Oscillator improved to close with a -158-print compared to Tuesday’s -202 close. The late bounce saw the S&P close above its 150 Day Moving Average making the case that the earlier sell-off was a false break. We also have a Black Candle on close which can be indicative of a shift in trend. Given the snap back and Points made yesterday I emailed my Platinum Members to ignore both my Dow and S&P stops. I am still long the S&P from Tuesday at an average rate of 4302. I will now have a ‘’Closing Stop’’ at 4269 on this position. Remember just before the close this evening, Fed Chair Powell is speaking and may be dovish given the carnage he has caused since his press conference. Treasury Yields are unsustainable at 4.61% given the level of U.S. Debt. I will leave my T/P level unchanged at 4330. If this view changes I will be back with a new update for my Platinum Members.
EUR/USD
The Euro fell a further 0.6% yesterday, closing at a price of 1.0505. With the 14-Day RSI at 27, I emailed my Platinum Members to stay long the Euro with no stop for now. The BOJ is achieving nothing with its verbal intervention and will have to step in and aggressively buy the Yen sooner rather than later especially as the USD/YEN is trading at 149.40 this morning which is above the 149 level when they pulled the trigger last October. I will leave my T/P level unchanged at 1.0675. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September Dollar Index
The Dollar traded higher to my second sell level at 106.60 for a now 106.30 average short position. This morning the Dollar is trading at 106.72. I will leave my 107.15 ‘’Closing Stop’’ unchanged while raising my T/P level to 105.75.. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
My DAX plan worked well as the market traded lower to my 15150-buy level before rallying to my 15250 T/P level and I am now flat. The DAX has now fallen over 1300 points since the beginning of the month. This is an enormous move resulting in an extremely oversold market. The DAX has support below from 15080/15160 where I will again be a buyer with the same 14995 ‘’Closing Stop’’.
Cash FTSE
After the FTSE traded lower to my 7560-buy level I had too many open positions. After the FTSE had a small rally, I exited this long position at my revised 7586 T/P level and I am still flat. Despite the carnage in the American Indexes the FTSE has held its September breakout through the entire S&P correction. The FTSE has support 7470/7540 where I will be a strong buyer with a lower 7415 ‘’Closing Stop’’.
Dow Rolling Contract
No Change. I am still long at an average rate of 33910 with the same 34060 T/P level. I will now lower my stop to a ‘’Closing Price’’ of 33495. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
My NDX plan worked well as the market traded lower to my second buy level at 14435 for a 14510 average long position. Wednesday’s late rally saw the NDX rally to my revised 14612 T/P level and I am now flat. This morning the NDX is trading slightly lower at 14580. We have support from 14400/14550 where I will again be a buyer with the same 14295 ‘’Closing Stop’’.
December BUND
The sell-off in Treasury Yields saw the Bund hit my second buy level at 128.10 for a now 128.50 average long position. I will leave my 127.35 ‘’Closing Stop’’ unchanged while lowering my T/P level to 129.25. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold got hit hard yesterday, trading lower to my 1879 buy level. I am still long and will add to this position at 1865 with the same 1853 ‘’Closing Stop’’. I will now lower my T/P level to 1890. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
No Change. I am still long Silver from three weeks ago at 24.05. In a change of strategy, I will have no stop or no T/P level on this position. Any sustained weakness in the Dollar will see both Gold and Silver surge. If this view changes, I will be back with a new update for my Platinum Members.
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