U.S Equity Markets were little changed, again, on Friday with the Indices continuing to lack direction after the rip higher on last Tuesday’s CPI. There was a degree of profit-taking into the cash open but that pared. Treasuries were mixed with bear-flattening seen in the wake of the above-forecast US Housing Starts and Permits data, with some hawkish central bank rhetoric (and not much more) enough to ignite profit-taking and steepener unwinds, fading initial Gilt-led strength after the soft UK Retail Sales figures. Little scheduled catalysts are due now ahead of the 20yr bond auction this evening. The Dollar Index was sold with strong gains in the Yen and Euro in a session influenced by book squaring for the week, although the Yen found particular strength (USD/JPY < 150) after the soft UK retail sales figures. The Chinese Yuan firmed amid the PBoC and regulators holding meetings in efforts to stabilise the property market, coming ahead of the 1yr and 5yr Prime Rate decisions on Monday (exp. unchanged). Oil prices saw a significant recovery from their Thursday depths, with growing expectations and source reports around a larger OPEC+ supply cut ahead of the Nov 26th meeting. US Housing Starts rose 1.9% in October to 1.372mln from 1.358mln in September, against the expected decline to 1.35mln. Single-family starts rose 0.2% to 970k, while multi-family homes rose 4.9% to 382k. Building permits also beat, rising 1.1% to 1.487mln from 1.471mln, beating the 1.45mln forecast. Single-family authorisations rose 0.5% to 963k, while multi-family homes rose by 2.2% to 469k. Overall, a strong report for the housing sector despite high interest rates. Looking ahead, analysts at Oxford Economics forecast “housing starts to weaken over the balance of the year and into Q1 of 2024 before beginning to recover around mid-year. However, the permits data and the latest decline in mortgage rates may lend upside risk to that outlook.” European Markets closed higher. Some hawkish-leaning ECB commentary hit alongside the above forecast October US housing starts and building permits data which was enough to ignite a wave of profit-taking, seeing the front-end lead a sell-off with steepeners unwinding in the NY morning. We soon heard from Fed’s Collins and Daly, who are the latest officials to refrain from endorsing market pricing of no more Fed hikes. The pullback lower was also aided by the rip (back) higher in oil prices. Elsewhere, Oil closed 4.1% higher while a break of 1.09 in the EUR/USD, saw Gold end Friday with a 1% gain.
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 125 points on Friday and is now ahead by 1175 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 0.13% higher at a price of 4514.
The Dow Jones Industrial Average closed 1 point higher for a 0.01% gain at a price of 34,947.
The NASDAQ 100 closed 0.03% higher at a price of 15,837.
The Stoxx Europe 600 Index closed 1.01% higher.
Last Friday, the MSCI Asia Pacific closed 0.3% higher.
Last Friday, the Nikkei closed 0.48% higher at a price of 33,585.
Currencies
The Bloomberg Dollar Spot Index closed 0.52% lower.
The Euro closed 0.6% higher at $1.0914.
The British Pound closed 0.4% higher at 124.60.
The Japanese Yen rose 1.1% closing at $149.60.
Bonds
Germany’s 10-year yield closed 5 basis points lower at 2.59%.
Britain’s 10-year yield closed 12 basis points higher at 4.11%.
U.S.10 Year Treasury closed 10 basis points lower at 4.44%.
Commodities
West Texas Intermediate crude closed 4.1% higher at $75.89 a barrel.
Gold closed 1% higher at $1980.10 an ounce.
This morning on the Economic Front we have German PPI at 7.00 am, followed by Euro-Zone Construction Output at 10.00 am. The only other data of note is the U.S. 20-Year Treasury Auction at 6.00 pm.
Cash S&P 500
It is difficult to justify a long S&P position at current prices given the 420 Handle rally in three weeks, especially with the $BPSPX 14-Day RSI closing at a severely overbought 80 print on Friday night. Remember it was only a few weeks ago that this key technical signal was consistently closing under 20 and severely oversold. I am not saying the S&P is going to fall hard from here, but I would rather wait before putting on a structurally long position to take advantage of the upcoming seasonality and year-end rally. The $BPNDX RSI closed on Friday at its highest level since March 2022 while the McClellan Oscillator is close to overbought, closing at +179 on Friday night. Bears and CTAs’ who were caught aggressively short at the end of October have been roasted by this aggressive move higher. The VIX fell 4% on Friday, closing at a price of 13.80 which is its lowest close since mid-September, meaning the risk is for a spike higher in the VIX leading to a further sell-off in the S&P and other American Indexes. All three American Indexes that I write about each day saw their respective 14-Day RSI’s close at an overbought 69 print on Friday. My S&P plan worked well as the market hit my 4522-sell level before selling off to my 4505 T/P level and I am now flat. Today, I will again be a seller from 4525/4540 with the same 4551 ‘’Closing Stop’’. Meanwhile, I will continue to be a buyer on any dip lower to 4453/4468 with the same 4439 ‘’Closing Stop’’.
EUR/USD
I am still flat the Euro as the market never came close to Friday’s buy level before rallying over 80 points, to close at 1.0914. The 14-Day RSI is now at 71. The Euro has resistance from 1.0950/1.1020 where I will be a seller with a 1.1075 ‘’Closing Stop’’. I will now raise my buy level slightly to 1.0750/1.0830 with a higher 1.0695 ‘’Closing Stop’’.
September Dollar Index
The Dollar fell 80 points on Friday, closing at a now oversold 103.80. The Dollar has support from 102.80/103.50 where I will be a small buyer with a 102.25 ‘’Closing Stop’’. I no longer want to be short the Dollar at this time.
Cash DAX
No Change. Incredible 1400-point rally in the DAX in three 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. I much prefer to be short the American Indexes given the liquidity. If this view changes I will be back with a new update for my Platinum Members.
Cash FTSE
Frustratingly, the FTSE missed 7420 buy level by two points on Friday, before rallying over 100 points and I am still flat. Today, I will raise my buy level to 7370/7440 with a higher 7325 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
No Change. I am still short the Dow from last 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 34670 as I have this position for nearly a week. If any of my above levels are hit I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
Wrong! I emailed my Platinum Members on Thursday to exit their 15765 average short position for a small loss at 15805 and I am now flat. This morning the NDX is trading slightly higher at 15850. We have resistance from 15880/16030 where I will be a strong seller with a higher 16145 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 15760. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
The Bund hit a high at 131.70 on Friday before selling off 70 points into the close. I am still flat. This evening’s 20-Year Treasury Auction is important given the aggressive sell-off in both Equity and Bond Markets following the recent auction last week. The Bund has support from 129.60/130.40 where I will be a small buyer with a 128.95 ‘’Closing Stop’’. I still do not want to be short the Bund at this time.
Gold Rolling Contract
Although Gold closed higher by 1% on Friday the market continues to trade in a narrow range below the key $2000 resistance level. I have no interest in being short continuing to be a buyer of dips in the precious metals. Gold has support from 1950/1965. I will now raise my buy level to this area with a higher 1939 ‘’Closing Stop’’.
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 23.75. If this view changes, I will be back with a new update for my Platinum Members.
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