U.S. Equity Markets were choppy on Wednesday, closing off their best levels seen earlier in the session, but Indices still remain near their post-US CPI highs. There was a confluence of factors to digest, with another very soft inflation report seen via the US PPI figures offset by a better-than-feared Retail Sales Report. The mixed retail sentiment seen in earnings with Target (TGT) shares surging after the Co. reported big profits, although that was more an idiosyncratic story with the retailer still noting a challenged macro backdrop; TJX (TJX), for instance, was hit after a disappointing Q4 guide; Walmart (WMT) is due to report on Thursday pre-market. Treasuries were sold, with some of the Fed rate cut pricing paring from the extremes, particularly after the retail sales beat and rise in the NY Fed’s manufacturing survey, although it’s worth noting the front end remains much closer to its post-CPI highs than the long end, which has nearly closed the CPI gap with corporate debt supply weighing out the curve ahead of next week’s 20yr bond auction. The Dollar Index was firmer but still towards the lower end of the post-CPI reaction on Tuesday. Meanwhile, USD/JPY saw a much more dramatic recovery in wake of the US data on Wednesday. Elsewhere, Sterling was sold broadly after soft UK CPI figures. Oil prices were sold to lows not seen in over a week amid mixed US inventory data, slowing Chinese oil demand in October, and the firmer US Dollar. October US headline PPI fell 0.5% M/M, a big surprise against the expected 0.1% rise, and down from the prior month’s 0.5% rise; Y/Y rose 1.3%, also well beneath the expected +1.9% and down from the prior +2.2%. The headline figures were pressured lower by a plunge in energy prices, mostly in the gasoline segment but also electricity prices, with food prices little changed. For the core figures, M/M prices were flat, beneath the expected and prior +0.3%, with the core Y/Y rising 2.4%, beneath the prior and expected 2.7%. The core figures saw good prices rise a meagre 0.1% and services prices unchanged. Pantheon Macroeconomics writes, “Combining the PPI data with the CPI numbers released yesterday, we expect a 0.25% increase in the October core PCE deflator, so it could round either to 0.2% or 0.3%. In any event, what really matters is the core services print, which should rise by less than the 0.45% gain in September.” US October Retail Sales were not as bad as feared, falling 0.1% (exp. -0.3%), with the prior revised up to +0.9% from +0.7%. The New York Fed’s Manufacturing Survey Index for November rose to +9.1 from -4.6, above the expected -2.8 and the second-highest reading of the year behind April’s 10.8. European Markets closed higher. Elsewhere, Oil closed 2.26% lower while Gold ended Wednesday with a small 0.4% loss following a quiet trading session.
To mark my 2900th 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 70 points yesterday and is now ahead by 1050 points for November. October ended with a gain of 3184 points, after closing September with a small gain of 228 points, after finishing August with 1485 points, 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 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 0.16% higher at a price of 4502.
The Dow Jones Industrial Average closed 163 points higher for a 0.47% gain at a price of 34,991.
The NASDAQ 100 closed 0.03% higher at a price of 15,817.
The Stoxx Europe 600 Index closed 0.41% higher.
Yesterday, the MSCI Asia Pacific closed 1.1% higher.
Yesterday, the Nikkei closed 2.52% higher at a price of 33,519.
Currencies
The Bloomberg Dollar Spot Index closed 0.34% higher.
The Euro closed 0.2% lower at $1.0845.
The British Pound closed 0.6% lower at 124.12.
The Japanese Yen fell 0.1% closing at $151.45.
Bonds
Germany’s 10-year yield closed 4 basis points higher at 2.64%.
Britain’s 10-year yield closed 7 basis points higher at 4.23%.
U.S.10 Year Treasury closed 9 basis points higher at 4.54%.
Commodities
West Texas Intermediate crude closed 2.26% lower at $76.51 a barrel.
Gold closed 0.4% lower at $1959.10 an ounce.
This morning on the Economic Front we have speeches from the Fed’s Cook at 11.00 am, and ECB President Lagarde at 11.30 am. This is followed by U.S. Weekly Jobless Claims and the Philly Fed Manufacturing Index at 1.30 pm. Next, we have Industrial Production and Capacity Utilisation at 2.15 pm ahead of a speech from Fed Member Williams at 2.25 pm. Finally, we have the NAHB Housing Market Index at 3.00 pm and the Kansas City Fed Manufacturing Index at 4.00 pm.
Cash S&P 500
My S&P plan worked well as the market traded the whole of my sell range for a 4518 average short position. As I am still short both the NDX and Dow I covered this position too early at 4511 and I am still flat. With the S&P short-term overbought, I will continue to be a small seller of rallies. Today, my sell level will be from 4520/4535 with a higher 4551 ‘’Closing Stop’’. The S&P has support from 4450/4465 where I will be a buyer with a 4439 ‘’Closing Stop’’.
EUR/USD
I am still flat the Euro. I will now lower my buy level slightly to 1.0720/1.0790 with a lower 1.0655 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 1.0850. I still do not want to be short the Euro at this time.
September Dollar Index
The Dollar traded in a narrow range yesterday and I am still flat. With USD/JPY getting closer to the key 150 resistance area, I will now raise my sell level to 105.10/105.80 with a higher 106.55 ‘’Closing Stop’’.
Cash DAX
No Change. Incredible 1100-point rally in the DAX in two weeks. Thankfully we had no short position in this market. As I cannot buy the DAX at these levels, nor do I want to be short I am going to stay flat the DAX until I see a better risk/reward opportunity. Sometimes it is better to sit on your hands.
Cash FTSE
The FTSE hit a high at 7535 yesterday before selling off 60 points into the New York close. I am still flat. I will continue to look to buy the FTSE on any further dip lower to 7340/7420 with a tight 7295 ‘’Closing Stop’’.
Dow Rolling Contract
I am still short the Dow from Tuesday at an average rate of 34715 as my ‘’Closing Stop’’ at 35005 again held. The Dow is severely overbought. I will now raise my T/P level on this position to 34650. If any of my above levels are hit I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
The NDX is trading 200 points lower from yesterday’s post PPI high at 15780 as I go to press. I am still short at an average rate of 15765. I will now raise my T/P level to 15720 as I want to be flat ahead of the weekend. I will leave my 15965 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
Just like the DAX above I am going to stay flat the Bund. With Yields sub 2.60% I do not want to be a buyer at these low yields especially as I cannot see the ECB easing rates anytime soon. If this view changes I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold traded in a narrow range yesterday and I am still flat. As Silver is close to my original buy level of six weeks ago, I will now lower my Gold buy level to 1925/1940 with a lower 1913 ‘’Closing Stop’’. I still do not want to be short Gold at this time.
Silver Rolling Contract
No Change. I am still long Silver from six weeks ago at 24.05. Silver has traded in a narrow 100-point range with very small daily ranges over the past few weeks. I am extremely bullish of Silver while frustrated that Silver has not followed the price of Gold higher. In a change of strategy, I will have no stop or no T/P level on this position. This morning Silver is trading higher at 23.50. I am encouraged by the fact the despite the 2% fall in Gold since Thursday that Silver continues to trade with a 22 Handle. Silver has strong support below at 21.80. I will now add to my existing position on any move lower to this pivot level. If this price is triggered, I will be back with a new update for my Platinum Members.
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