U.S. Equity Markets reversed earlier losses to close higher on Monday as traders try to gauge the impact of Hamas launching a major attack on Israel early Saturday morning. Hamas is an Islamic Group with close ties to Iran, which according to the Wall Street Journal is the main source of funding. The bulk of Arab countries are hostile to Iran and therefore will not support Hamas. The attack was designed to discourage a counterattack given the focus of capturing people, especially children. Capturing and planting children is unsavoury and callus but effective. All eyes are on what response Israel takes from here. With the Bond Market closed for Columbus Day, the S&P led Monday’s gains, closing higher by 0.63%. After witnessing a notable surge in oil prices over the past few months, both Brent crude and U.S. West Texas Intermediate crude experienced significant weekly losses, nearly reaching double digits, last week. Analysts express concern that the ongoing weakening of global growth might adversely affect demand as we head into the next year. However, heightened tensions and recent escalations of conflicts in Israel and the Middle East have reignited apprehensions about oil being entangled in geopolitical crosshairs, causing a short-term rise in oil prices. This week, investors will be closely watching the latest release of the Consumer Price Index (CPI), which is expected to show a month-over-month increase of 0.4% for September. Wall Street anticipates a 3.7% annual increase in headline inflation for September. Core CPI, which excludes volatile food and fuel prices, is expected to increase at an annual rate of 4.2%, which would mark the smallest annual increase since September 2021. This data will play a significant role in shaping expectations regarding the Fed’s future plans. Meanwhile, investors could get a glimpse inside those plans with several Fed officials, including Neel Kashkari, Mary Daly, and Christopher Waller, speaking throughout the week. The third-quarter earnings season kicks off later this week with major banks, including JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFG), set to report their results on Friday. Investors will closely monitor how banks are handling the sustained path of high interest rates which has led to extreme levels of unrealised losses on investments. Analysts expect third-quarter earnings to give a clear signal as to whether the market can sustain its year-to-date gains heading into the final quarter of the year. As we begin the fourth quarter, investors will gain valuable insights into the U.S. consumer economy and the outlook for small businesses. The NFIB Small Business Optimism Index will offer valuable insights into the state of small businesses, considering the impact of pricing pressures and labour concerns. On the consumer front, the University of Michigan’s Survey of Consumers will give investors potential insight into the confidence of consumers heading into the holiday season which has traditionally seen an uptick in spending. European Markets closed lower. Markets gapped lower before trading in a narrow range for most of Monday. In Asia, the Nikkei re-opened overnight having been closed on Monday, ending Tuesday’ session with a hefty gain of 2.59%. Elsewhere both Oil and Gold surged, closing higher by 4.34% and 1.2% respectively.
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 418 points yesterday and is now ahead by 1472 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 0.63% higher at a price of 4335.
The Dow Jones Industrial Average closed 197 points higher for a 0.59% higher at a price of 33,604.
The NASDAQ 100 closed 0.49% higher at a price of 15,047.
The Stoxx Europe 600 Index closed 0.26% lower.
This morning, the MSCI Asia Pacific closed 1.1% higher.
This morning, the Nikkei closed 2.59% higher at a price of 31,798.
Currencies
The Bloomberg Dollar Spot Index closed 0.05% higher.
The Euro closed 0.2% lower at $1.0561.
The British Pound closed 0.1% lower at 122.30.
The Japanese Yen rose 0.7% closing at $148.48.
Bonds
Germany’s 10-year yield closed 14 basis points lower at 2.77%.
Britain’s 10-year yield closed 4 basis points lower at 4.55%.
U.S.10 Year Treasury closed 8 basis points higher at 4.80%.
Commodities
West Texas Intermediate crude closed 4.34% higher at $86.38 a barrel.
Gold closed 1.3% higher at $1860.10 an ounce.
This morning on the Economic Front we have the Bank of England Minutes at 10.30 am followed by U.S. NFIB Business Optimism Index at 11.00. Finally, we have Wholesale Inventories at 3.00 pm. Meanwhile, Fed Members Waller and Kashkari are speaking at 6.30 pm and 8.00 pm respectively.
Cash S&P 500
The S&P is now trading 60 Handles higher from where I marked prices 24 hours ago as investors have shrugged off the impact of higher oil prices following the Hamas attack on Saturday morning. This morning this S&P is higher again following the 16-basis point fall in Treasury Yields with the 10-year trading at 4.64% as I go press. Friday’s reversal post the much stronger than expected NFP print was a classic bottom given how oversold all my technical signals had become over the previous three weeks. We saw a successful test of the 200 Day Moving Average on Thursday morning’s 4201 low print. I am of the opinion that we could see a melt-up in stock prices into year-end given the strong 4th Quarter Seasonality ahead of next year’s Presidential Election. Asset Managers have their least long positioning for all of 2023 and this will add fuel to the upcoming rally. A lot of bad news has been thrown at the S&P over the past two months, yet bears could not break the key 200 Day MA. Yesterday, my S&P plan worked well with the market trading lower to my 4269-buy level shortly after I posted before rallying to my 4284 T/P level and I am now flat. This morning the S&P is trading at 4339. We have strong support from 4307/4323 where I will be a buyer with a 4295 ‘’Closing Stop’’.
EUR/USD
Yesterday’s sell-off saw the Euro hit my 1.0525 buy level. I am still long with a now lower 1.0575 T/P level. I will add to this position at 1.0455 while leaving my ‘’Closing Stop’’ unchanged at 1.0395. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September Dollar Index
I am still flat the Dollar as the market just missed yesterday’s sell range by 10 points before falling 50 points into the close. Today, I will now lower my sell range to 106.45/107.05 with a lower 107.65 ‘’Closing Stop’’.
Cash DAX
My DAX plan worked well with the market trading lower to my 15100-buy level before rallying to my revised 15168 T/P level and I am now flat. This morning the DAX is trading higher at 15225. We have strong support from 15050/15130 where I will be an aggressive buyer with a higher 14985 ‘’Closing Stop’’.
Cash FTSE
The boring price action in the FTSE shows no sign of ending. On the positive side the FTSE continues to build value above 7450. This morning the FTSE is trading higher at 7545. I have now decided to exit last week’s 7530 average long position here and I am now flat. The FTSE has support below from 7430/7500 where I will again be a buyer with a lower 7375 ‘’Closing Stop’’.
Dow Rolling Contract
The good news was the Dow hit my buy kevel at 33120 shortly after I posted yesterday. The bad news was I exited this long position way too early at 33235 and I am now flat. This morning the Dow is trading higher at 33600. The 50-Day MA at 33806 continues to offer strong resistance. However, in my opinion it is only a matter of time before the Dow successfully closes above this key resistance level. This morning, I will again be a buyer of the Dow from 33150/33400 with a 32995 tight ‘’Closing Stop’’.
Cash NASDAQ 100
My NDX plan worked well as the market traded lower to my 14840-buy level before rallying to my revised 14910 T/P level and I am now flat. Lower Bond Yields should continue to help the NDX on any subsequent sell-off. The 50-day MA at 15095 is just above where we closed last night and will offer initial resistance. However, I have no interest in pressing the downside preferring to be a buyer of dips. The NDX has support from 14830/14970 where I will be a strong buyer with a higher 14695 tight ‘’Closing Stop’’.
December BUND
The Bund never came close to yesterday’s buy range, and I am still flat. This morning the Bund is trading higher at 129.40. I will now raise my buy level to 127.90/128.60 with a higher 127.15 ‘’Closing Stop’’.
Gold Rolling Contract
Frustratingly, Gold just missed yesterday’s 1838 initial buy level with a 1843 low print before rallying to sit at 1860 this morning. I will now raise my buy level slightly to 1828/1843 with a higher 1817 ‘’Closing Stop’’.
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 unchanged at 21.85. If this view changes, I will be back with a new update for my Platinum Members.
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