U.S. Indices were rangebound on Tuesday, as traders await the pivotal FOMC meeting on Wednesday, with them widely expected to cut by 25bps, but there remains an outside risk of a larger cut, and attention will be accompanying commentary and updated SEPs. US data came in the form of Retail Sales, which printed above expectations across the board. Import/Export Prices came in hotter than expected, and Industrial Production unexpectedly rose in August. In the wake of the data, the Atlanta Fed Q3 GDPNow model was revised up to 3.4% from 3.1%. Sectors were mixed, with Energy the clear outperformer and buoyed by the gains in the crude complex after Russia’s Transneft reportedly told producers it is restricting oil storage in its systems and may limit oil intake, and that Russia could be forced to start cutting oil production. Treasuries chopped to the aforementioned data ahead of FOMC, but the short-end saw gains while the long-end was more or less flat. The US sold USD 13 billion of 20-Year Treasury notes, with the results signalling resilient demand, particularly from direct bidders. The Dollar sold off, to the benefit of G10 FX peers, while spot Gold hit another all-time-high and breached USD 3,700/oz, albeit briefly. Retail Sales were above expectations across the board in August, highlighting the resilient US consumer. Highlighting this, the headline rose 0.6% M/M (exp. 0.2%, prev. 0.6%), and ex-autos M/M lifted 0.7% (exp. 0.4%, prev. 0.4%), with both matching the top end of the forecast range. Ex-gas/autos jumped 0.7% from 0.3%, with retail control coming in at 0.7%, above the consensus 0.4% and prior 0.5%. Looking into the details, nonstore retailers (+2.0%), Clothing & clothing accessories stores (+1.0%), and Food services & drinking places (+0.7%) led the gains, while Furniture, Health, General merchandise, and Miscellaneous all declined. On the release, ING writes “We need to remember that these numbers are nominal dollar figures, so adjusting for inflation, the volume figures are up a more modest 0.2% M/M, but that isn’t bad and should further dampen any lingering thoughts that the Fed could cut rates 50bps on September 17th, and as such a 25bps cut remains ING’s call”. Elsewhere, Oil closed higher by 2% while Gold hit a new all-time closing high with a gain of 0.3%.
To mark my 3250th 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 305 points yesterday and is now ahead by 1122 points for September after ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 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% lower at a price of 6606.
The Dow Jones Industrial Average closed 125 points lower for a 0.27% loss at a price of 45,757.
The NASDAQ 100 closed 0.08% lower at a price of 24,274.
The Stoxx Europe 600 Index closed 1.14% lower.
This Morning, the MSCI Asia Pacific closed 0.3% higher.
This morning, the Nikkei closed 0.20% lower at a price of 44,820.
Currencies
The Bloomberg Dollar Spot Index closed 0.69% lower.
The Euro closed 0.88% higher at $1.1865.
The British Pound closed 0.41% higher at $1.3660.
The Japanese Yen rose 0.61% closing at $146.35
Bonds
U.K.’s 10-Year Gilt closed 1 basis points higher at 4.65%.
Germany’s 10-Year Bund Yield closed 1 basis points lower at 2.68%
U.S.10 Year Treasury closed 1 basis points lower at 4.03%.
Commodities
West Texas Intermediate crude closed 2.02% higher at $64.58 a barrel.
Gold closed 0.31% higher at $3690.10 an ounce.
This morning on the Economic Front we already had the release of U.K. August CPI which printed +3.8% y/y as expected. Next, we have the Euro-Zone CPI at 10.00 am and a 30-Year German Bund Auction at 10.30 am. This is followed by U.S. Building Permits and Housing Starts at 1.30 pm. At 2.45 pm we have the Bank of Canada Rate Announcement. Finally, we have the FOMC Statement at 7.00 pm and Fed Chair Powell’s Press Conference at 7.30 pm.
Cash S&P 500
I have been writing a lot about bubbles. The momentum in bubbles from the past are so persistent it defies any reason or sensibility and invariably people abandon all discipline as they psychologically cannot take it anymore and get run over as happened to Sir Isac Newton back in December 1721. Google is now a $3 trillion Company with an RSI at 88.5. The top six American Companies have a combined Market Cap of $20 trillion. This is larger than the GDP of China, the world’s second largest economy. This is mind boggling and one of the main reasons why you should not be anywhere near fully invested in equities. This bubble will burst – make no mistake about that – the problem is the ‘’Where and the When’’. The S&P continues to trade outside the top of its Daily Bollinger Band with an RSI of 70. I have no interest in chasing markets higher against this backdrop. The S&P has only had one red candle in the last 13 weeks with the last down week on Aug 1 and this move lower was quickly reversed. In normal markets the GAAP ratio is between 15-25. Today, we are at 30.5. Which is another way of saying that the market could drop 20% and just be at the extreme range of past normal bull markets, which is basically what we did back in early April. This evening I expect the Fed to cut rates by 25 basis points. Powell’s press conference will determine the next move. Shortly after I posted yesterday morning the S&P hit my 6634-sell level before selling off to my revised 6606 T/P level and I am now flat. Today, I will again be a seller from 6630/6650 with the same 6671 ‘Closing Stop’. If I am taken short, I will have a T/P level at 6602.
EUR/USD
The Euro rallied to my second sell level at 1.1850 for a now 1.1810 average short position. Ahead of the Fed Announcement I will leave my 1.1925 ‘Closing Stop’ unchanged while raising my T/P level to 1.1750. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
The Dollar got hit hard yesterday, trading lower to my second sell level at 97.00 for a now 97.35 average long position. The Dollar is at new lows for the year which is concerning but at the same is also massively oversold. I still believe that buying the Dollar will pay off. I will leave my 96.45 tight ‘Closing Stop’ for now while lowering my T/P level to 97.80. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
The Russell sold off to my 2390 T/P level on my 2415 short position and I am now flat. Today, I will again be a seller on any further rally to 2415/2465 with the same 2505 ‘Closing Stop’. If I am taken short, I will have a T/P level at 2380.
FTSE 100
Tuesday’s 9285 high saw the FTSE record a strong negative divergence leading to a 90-point fall in the market. I am still flat. Today, I will continue to be a buyer on any dip lower to 9050/9130 with the same 8995 ‘Closing Stop’. If I am taken long, I will have a T/P level at 9190.
Dow Rolling Contract
I am still flat as the Dow as the market never came close to Wednesday’s sell range. Ahead of the Fed this evening I will continue to be a small seller on any further rally to 46150/46400 with the same 46505 tight ‘Closing Stop’. If I am taken short, I will have a T/P level at 45870. I still have no interest in buying the Dow at this time.
Cash NASDAQ 100
The NDX rallied to my 24380-sell level. I am still short with a now higher 24190 T/P level. I will continue to look to add to this position at 24540 while leaving my wider 24705 ‘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
I am still flat. Today, I will leave my 128.40/129.10 buy level unchanged with the same 127.85 ‘Closing Stop’. If I am taken long, I will have a T/P level at 129.85. I still do not want to be short the Bund at this time.
Gold Rolling Contract
Gold continues to rally relentlessly implying that panic printing is about to occur resulting in a monthly RSI OF 88. This is extreme beyond reason and we are suppose to accept that with the melt-up in global assets that this is the new normal with no end in sight. I am still flat as Gold just fell shy of Tuesday’s sell range before having a small sell-off into the New York close. Ahead of this evening’s FOMC Statement, I will now raise my Gold sell level to 3715/3735 with a higher 3751 ‘Closing Stop’. If I am taken short, I will have a T/P level at 3678. Given how overbought Gold is trading at this time I no longer want to be a buyer of the market. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Overnight, Silver traded lower to my 41.80 buy level. I am still long with a now lower 42.40 T/P level. I will add to this position at 40.70 while leaving my 39.55 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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