The S&P had a nice bounce off yesterday morning’s 200 Day Moving Average (4201) test, rallying over 60 Handles to close higher at a price 0f 4263. This move higher saw the VIX close lower by over 6% while internally the market was strong as shown by the McClellan Oscillator which improved to close at -148 last night. Lower Bond Yields and a weaker Dollar helped sentiment during Thursday’s volatile trading session. Atlanta Federal Reserve President Raphael Bostic has long advocated for the “higher for longer” approach to lower inflation to the Fed’s 2% target. He reiterated this stance yesterday, stating that he is in no rush to raise or lower rates and that reaching the central bank’s 2% target crucial. While Bostic won’t be voting on rate-policy decisions this year, he has been a strong advocate for pausing rate hikes and maintaining elevated rates for a long time. Fed officials will continue to be data centric as they approach the October meeting. Job openings in August surprised economists to the upside, increasing from 8.92 million openings in July to 9.61 million in August. The surge was due to a hefty increase in the number of white-collar job postings. Hiring also saw a slight uptick, while layoffs remained low. However, most Americans are still holding onto their jobs as the “quits rate” stayed at a three-year low of 2.3%. The low rate suggests American workers are not so optimistic about finding another job in the current market. In the meantime, the Federal Reserve will continue to closely monitor labour data as the central bank mulls over an additional rate increase. McCormick (MKC) raised its annual profit forecast despite facing lower demand and a slow recovery in China. The spice maker has had to steadily increase prices to offset higher production costs caused by supply-chain snarls. Although the company’s sales volume slumped 2% in the third quarter, its gross profit margins rose 150 basis points due to the higher pricing. Despite missing estimates for quarterly net sales, McCormick’s performance highlights its ability to overcome adversity and maintain profitability. Ford (F) and General Motors (GM) announced a combined 500 additional layoffs for multiple Midwestern plants due to the United Auto Workers (“UAW”) strike. The UAW presented a new contract to GM on Monday, but the automaker noted that “significant gaps remain” in the negotiations. The strike is estimated to have cost GM and Ford nearly $191 million and $145 million, respectively. Not only has the prolonged protest resulted in significant financial losses for the “Detroit Three” of Ford, GM, and Stellantis (STLA), but the entire auto industry has also taken a hit. Anderson Economic Group estimated total losses from the first two weeks were $3.9 billion. This figure includes lost wages, as well as losses for the three automakers, parts suppliers, auto dealers, and customers. European Markets closed mixed. The European Central Bank’s (“ECB”) chief economist Philip Lane emphasised the bank must stay the course on holding rates elevated as long as necessary to meet its inflation goal. He highlighted persistent price increases, as the ECB recently estimated that it could take as long as two more years to reach the 2% target. As such, Lane cautioned to “not over-focus” on new forecasts expected at the December meeting. In Asia, I speculated that we saw some intervention by the BOJ in yesterday’s commentary. The currency experienced a sharp surge against the dollar, strengthening to 147.43 yen per dollar after reaching its weakest point in nearly a year. The rapid movement has fuelled speculation that Japanese officials may have intervened to slow the yen’s slide. While no official comment has come from the Japanese government, traders are split on whether they believe intervention was present. The first intervention from Japan came last year when the yen reached 145.90 in September. Elsewhere, Oil got slammed yesterday, closing lower by a hefty 4.35% lower while Gold closed flat after a volatile session.
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 529 points yesterday and is down by 136 points for October after closing September with a small gain of 228 points, 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 0.81% higher at a price of 4263.
The Dow Jones Industrial Average closed 127 points higher for a 0.39% higher at a price of 33,129.
The NASDAQ 100 closed 1.45% higher at a price of 14,776.
The Stoxx Europe 600 Index closed 0.14% lower.
This morning, the MSCI Asia Pacific closed 0.8% higher.
This morning, the Nikkei closed 1.80% higher at a price of 31,075.
Currencies
The Bloomberg Dollar Spot Index closed 0.30% higher.
The Euro closed 0.4% higher at $1.0513.
The British Pound closed 0.4% higher at 121.48.
The Japanese Yen fell 0.2% closing at $149.07.
Bonds
Germany’s 10-year yield closed 4 basis points lower at 2.93%.
Britain’s 10-year yield closed 8 basis points higher at 4.64%.
U.S.10 Year Treasury closed 8 basis points lower at 4.72%.
Commodities
West Texas Intermediate crude closed 4.35% lower at $85.35 a barrel.
Gold closed 0.1% lower at $1823.10 an ounce.
This morning on the Economic Front we have U.K. Global Construction PMI at 9.30 am, followed by a speech from ECB’s Lane at 10.45 am. Next, we have U.S. Weekly Jobless Claims and the Trade Balance at 1.30 pm. Finally, we have a speech from ECB Member De Guindos at 3.00 pm.
Cash S&P 500
The S&P had a nice rally off yesterday morning’s 4201 test of its 200 Day Moving Average, trading higher at 4257 as I go to press. The initial spike saw my 4232 revised T/P level triggered on my latest 4212 average long position. When the S&P rallied to 4249 the $BPSPX RSI was an incredible 4% lower at 9.90. As a result, I bought the S&P again at 4247 as emailed to my Platinum Members. I covered this position just before the close at my 4267 T/P level. Given the ridiculous 9 ‘’Handle’’ in the $BPSPX, I emailed my Platinum Members to buy the S&P again which I did overnight at a price of 4252. I am still long, and I will add to this trade at 4232 with a 4219 ‘’Closing Stop’’. I will have a T/P level on this position at 4273. Given how oversold all my technical signals are with a number of these signals below last October’s major low we have all the makings of another sustained bottom this month. Just like in October both the Dollar and Bond Yields were the cause of the sell-off. What has been a surprise is the extreme and persistent price action in the Dollar and Bond Yields because these moves are so extreme that they are set up for a major reversal. This would go hand in hand with the Seasonality Chart which is indicating a major rally into year-end. The seasonality chart continues to suggest a major low either now or in the coming days. This why I continue to be a buyer on dips despite the pain caused over the past three weeks. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
EUR/USD
No Change. I am still long the Euro at an average rate of 1.0510. I will leave my T/P level unchanged at 1.0565 while leaving my 1.0425 ‘’Closing Stop’’ unchanged. 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 had a small sell-off yesterday enabling me to cover my 106.75 average short position for a small gain at my revised 106.65 T/P level and I am now flat. Today, I will again be a seller on any further rally to 107.10/107.70 with a higher 108.15 ‘’Closing Stop’’.
Cash DAX
No Change. I am still long the DAX at 15245 as the market again closed above my 15135 ‘’Closing Stop’’. This morning the DAX is trading higher at 15145. I will leave my closing stop unchanged for now. I will have a T/P level at 15280. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Cash FTSE
No Change. I am still long the FTSE at an average rate of 7530 with the same 7445 ‘’Closing Stop’’. It is a concern that the FTSE is back trading below its 200-Day Moving Average. The key question is will this be a false break or will the FTSE be able to trade back above 7500 and stabilise. I will leave my 7560 T/P level unchanged for now. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Even though the 14-Day RSI improved slightly to close at 28 last night the Dow is still severely oversold. Bond yields north of 4.50% are not sustainable. To give everyone an idea of the carnage in the bond market I took a look at the TLT Market. This is an Exchange Traded Fund holding long-term Treasuries (20 years +). For anyone who bought the TLT near the 2020 peak, they are now sitting on a 53% capital loss. In my opinion there is no doubt that we have some banks in serious trouble as this level of carnage cannot happen without some financial casualties. The vertical move in bond yields this week has been the lifting of the debt ceiling last June. In the past three months there has been a near $2 trillion debt increase with $275 billion occurring on Tuesday alone. This is mind boggling. Treasury Secretary Yellen keeps cheerleading about a soft landing. However, this move higher in Yields is risking not only killing the soft landing but also risking blowing up a bunch of additional banks. It is easy for this scenario to stop. If the Fed and Yellen pause QT and buy Treasury Debt again the Dow will commence a mega rally. I am still long the Dow from Tuesday at an average rate of 33325. I will continue to have no stop on this position. I will now have a T/P level at 33600. If this view changes I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
My latest 14580 average long NDX position worked well as the market rallied to my 14650 T/P level and I am now flat. Given how oversold my technical signals are I am happy to be a buyer of dips despite how scary this view has been over the past two weeks. Today, the NDX has support from 14520/14670 where I will be a strong buyer with a 14395 wider ‘’Closing Stop’’.
December BUND
My long Bund position worked well as the Bund rallied to my revised 127.69 T/P level on yesterday’s 127.20 average long position. I am now flat. The Bund has support from 126.40/127.10 where I will be an aggressive buyer with a lower 125.85 ‘’Closing Stop’’.
Gold Rolling Contract
No Change. I am still long at 1831 with the same 1840 T/P level. I will continue to look to add to this position at 1815 while leaving my 1803 ‘’Closing Stop’’ unchanged. 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. This morning Silver is trading slightly higher at 21.20. If this view changes, I will be back with a new update for my Platinum Members.
Recent Comments