U.S. Indexes closed higher on Wednesday with upside led by the NASDAQ as tech stocks, namely NVDA, outperformed while the Dow lagged. Progress on the government shutdown was lacking, but there was some optimism in France regarding political instability and optimism on a Gaza deal, which appears very close to an agreement. Meanwhile, in the US, the Fed minutes were hawkish, and the 10-year T-note auction was weak. T-notes settled flat with the curve flattening slightly – early upside was seen tracking EGBs higher on hopes of progress towards the French budget, albeit T-notes had pared the move in US trade ahead of the minutes and auction. The auction saw T-notes push to lows, but little reaction was seen to the minutes. Within the Fed Minutes, it revealed a few participants saw merit in keeping rates unchanged in September, or that they could have supported such a decision, while Miran was the only member to support a 50 basis point rate cut. In FX, the Dollar added to recent gains thanks to weakness in the Euro, Yen and Swiss Franc, but the Euro was off lows into the APAC session after French Caretaker PM Lecornu. He said there is a majority in parliament that is against the dissolution of parliament, and he said there could be a new PM within 48 hours (later confirmed by Elysee reports, citing Macron). The New Zealand Dollar underperformed after the RBNZ cut rates by 50 basis points early Wednesday morning versus split market expectations and pricing. Oil prices chopped once again but settled in the green, albeit off peaks, on reports that a Gaza deal is very close and likely to be signed within the next two days. Gold and Silver prices continued to rally, albeit heading into APAC trade off the earlier peaks, with both precious metals earlier printing fresh record highs. The FOMC Minutes had some hawkish and dovish elements. On the hawkish side, some participants said financial conditions suggest policy may not be particularly restrictive. Those members judged that a cautious approach to future policy was warranted. Moreover, a few participants saw merit in keeping the Fed Funds rate unchanged in September, or that they could have supported such a decision. Also, the minutes confirmed Miran was the only member to support a 50 basis point rate cut – even among the non-voting members. However, offsetting some of the hawkishness was that most participants judged the downside risks to employment had increased, while upside risks to inflation had either diminished or not increased. Although, the majority emphasised upside risks to their outlooks of inflation. When describing the labour market, the Minutes acknowledged the low number of monthly job gains, with several expecting it to remain low, citing low net immigration and workers nearing retirement age. However, when looking at other metrics (other than headline payrolls), participants generally assessed that recent readings did not show a sharp deterioration in labour market conditions. Following the minutes, Pantheon Macroeconomics highlights that a 25 basis point rate cut remains a solid bet, but there will likely be some hawkish dissent. Elsewhere, Gold surged above $4000 with a 1.36% gain while Oil ended yesterday’s session with a 0.6% gain.
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 was flat yesterday and is still ahead by 310 points for October after closing September with a gain of 3774 points 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 0.58% higher at a price of 6753.
The Dow Jones Industrial Average closed 2 points lower for a 0.01% loss at a price of 46,600.
The NASDAQ 100 closed 1.19% higher at a price of 25,136.
The Stoxx Europe 600 Index closed 0.84% higher
This Morning, the MSCI Asia Pacific closed 0.3% higher.
This morning, the Nikkei closed 1.41% higher at a price of 48,410.
Currencies
The Bloomberg Dollar Spot Index closed 0.31% higher.
The Euro closed 0.28% lower at $1.1623.
The British Pound closed 0.21% lower at $1.3393.
The Japanese Yen fell 0.55% closing at $152.70
Bonds
U.K.’s 10-Year Gilt closed 1 basis points lower at 4.72%.
Germany’s 10-Year Bund Yield closed 3 basis points lower at 2.68%
U.S.10 Year Treasury closed 1 basis points lower at 4.12%.
Commodities
West Texas Intermediate crude closed 1.12% higher at $62.42 a barrel.
Gold closed 1.36% higher at $4039.10 an ounce.
This afternoon on the Economic Front we have the Minutes from the September ECB Meeting at 12.30 pm. The only other event of note is a speech from Fed Chair Powell at 1.30 pm. Due to the Government shutdown there will be no U.S. data released until further notice.
Cash S&P 500
The 6700 now key support level held again on Wednesday, driving the S&P to new all-time highs. These are strange times for trading. Following a 0.6% fall in the S&P over the past few days the $NYSI Stochastic saw this key signal hit maximum oversold. For years and years this reading was associated with corrections and sell-offs. Now we get a max oversold reading while the American Indexes are at all-tome highs. This summer we had a similar reading with no sell-off and it was impetus enough for markets to keep rallying. With today’s reading one cannot dismiss the possibility that the S&P will do it again and rally into year-end. Typically big sell-offs come from max overbought readings and we are seeing the exact opposite here, implying there is plenty of theoretical room to run the S&P higher. Maybe it is because of the concentrated market issue with so many stocks not participating like Transports. Frankly this signal read makes a mockery of normal market functioning. While the $NYSI sends a signal of underlying weakness major Index Charts are massively stretched to the upside with numerous negative divergences and basically one real down-day from a major trend break. As I said yesterday 6700 remains the key short-term support level ahead of the Weekly 14 EMA at 6667. Once both of these key support levels break then we can start to talk about a more meaningful correction. The Dollar breaking higher is normally a warning for a lower S&P but so far this weeks both of these signals have diverged. In my opinion everything is so overcrowded, over-owned, over-leveraged and over-stretched that the risk of a major deleveraging move keeps building. Nobody is calling for a move lower as even the bears are bullish as nobody wants to look like an idiot if we keep rallying. The S&P 500 closed higher by 0.6%, but the Index has essentially moved sideways since Friday. If it manages to gap higher today, that would be different, but for now, we have just been oscillating around the 6,750 gamma level. Technically, there is not much to note, except for the bearish divergence on the RSI and the potential rising wedge. However, overall market breadth continues to deteriorate as shown by the McClellan Oscillator which closed with a -44 reading last night. Wednesday’s move higher saw the S&P traded the whole of my sell range for a now 6750 average short position. I will have a ‘Closing Stop’ at 6771 on this position while raising my T/P level to 6728. I will still be a buyer on any dip lower to 6647/6667 with the same tight 6632 ‘Closing Stop’. If I am taken long, I will have a T/P level at 6692. If any of these views change, I will be back with a new update for my Platinum Members.
EUR/USD
I am still flat as the Euro never came close to Wednesday’s sell range. I will now lower my sell level to 1.1690/1.1760 with a lower 1.1835 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1610. I still do not want to be long the Euro at this time.
Dollar Index
I am still flat. The weakness in the Japanese Yen saw the Dollar close higher by a further 0.5% yesterday. The Dollar continues to show strength, with the Index pushing higher and breaking above resistance at 98.50. Momentum is continuing to build positively, with the RSI moving above 61. The 100 level is likely the next stop for the Dollar Index Today, I will leave my 97.70/98.50 buy level unchanged with the same 96.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 99.20.
Russell 2000
I am still short the Russell from last week at 2470 with the same 2430 T/P level. I will add to this position at 2530 while leaving my tight 2575 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
The FTSE rose yesterday, closing at yet another new all-time high at 9550. This move higher saw my 9535 sell level triggered. I will add to this position at 9605 while leaving my 9651 ‘Closing Stop’ unchanged. I will now raise my T/P level to 9480. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
I am still flat. Today, I will leave my 46900/47150 sell level unchanged with the same 47305 ‘Closing Stop’. If I am taken short, I will have a T/P level at 46680.
Cash NASDAQ 100
The NDX surged to new all-time highs on Wednesday. The late rally saw the whole of my sell range triggered for a now 25085 average short position. I will leave my 25305 ‘Closing Stop’ unchanged while raising my T/P level to 24930. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
The Bund finally closed higher on Wednesday after spending days trading in narrow ranges. The Bund never came close to my buy range and I am still flat. Today, I will raise my buy level to 128.30/129.10 with a higher 127.65 ‘Closing Stop’. If I am taken long, I will have a T/P level at 129.70.
Gold Rolling Contract
With the Monthly RSI at 90 who would want to be a buyer of Gold at these stretched levels. Gold is now at its most overbought level in history and from my perch the risk/reward from here is to be short especially as it appears the Dollar has broken out to the upside. I am still short at an average rate of 3992 with no STOP as emailed to my Platinum Members yesterday. I will leave my 3974 T/P level unchanged and if hit I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Silver hit a new 2025 high at 49.20 overnight and I am still flat. Silver has short-term support from 45.80/46.80. I will leave my buy level unchanged in this range with the same 44.15 ‘Closing Stop’. If I am taken long, I will have a T/P level at 47.90.
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