Equity markets harboured something of a defensive tone, but the Oil market kicked higher again on the little to no fundamental news, signs of a classic short squeeze. There were reports of an OPEC bulletin indicating some preparedness to talk to other producers to achieve fair prices, but this bulletin hasn’t been the key mouthpiece for OPEC before. In any case, OPEC output has continued to increase a little. In recent weeks however, we have seen tentative signs from weekly US production that shale output might be peaking. In any case, Oil prices jumped by over $3/bbl for both WTI and Brent, WTI up to $48.32 and Brent to $53.06, the third day of this squeeze higher in prices. Incredibly Oil has now rallied over 30% since last Thursday.
For anybody following my new Platinum Service it made 270 points yesterday and closed the Month of August with a 2195 point gain. The previous two months saw gains of 1810 and 3045 points respectively.
I have been asked to do a live trading/training day over the Non-Farm Payrolls this coming Friday September 4th in the Royal Irish Yacht Club Dun Laoghaire from 11.00 am to 5.00 pm. ETX Capital have kindly agreed to sponsor any existing or new client account’s to the tune of EUR 150 for anyone who attends this event. If anybody is interested please contact Graham on grahammulhern@yahoo.com
This spilled over into strength in the CAD (+0.79%), NOK (+0.51%) and the RUB (+4.25%). The NZD (-1.15%) and the AUD have been pushed lower (-0.85%) against the USD that has been little changed overall. US Treasury yields rose in tandem with Oil prices with the market shading higher the pricing of a Sept FOMC hike to 24%. No especially large data points overnight with the EC preliminary CPI a tenth higher than expected for headline and core and an unchanged Chicago PMI.
One of the main reasons for the sell-off in both US Treasuries and the German BUND yesterday was the fact that the PBoC were selling these Bonds and bringing the monies home.
This morning stock markets are getting hit again following the 730 point sell-off in the Japanese Nikkei which closed down nearly 4% on risk-off. This selling has led to more Yen strength with USD/JPY gain testing the ley 120 support level. Overnight the RBA left Interest Rates unchanged while the Chinese PMI came in as expected at 49.7.
This morning on the economic front we have German Unemployment and Manufacturing PMI at 8.55 am. At 9.00 am we have Euro-Zone PMI. This is followed at 9.30 am by UK Mortgage Approvals and Manufacturing PMI. At 10.00 am we have Euro-Zone Unemployment. This afternoon at 2.45 pm we have US PMI. Finally at 3.00 pm we have Construction Spending and ISM Manufacturing. Later at 6.10 pm the Fed’s Rosengren will speak on the Economic Outlook.
September S&P 500
The S&P plan worked very well yesterday as the market had a nice sell-off to my 1967 buy level shortly after I posted. Subsequently the market had a nice rally before lunch which enabled me to cover this position at 1975 as outlined earlier to my Platinum Members and I am now flat. This morning following the 4% fall in the Nikkei the S&P is trading 30 Handles lower following negative comments from a few prominent institutions late yesterday on earnings and growth prospects. There is no doubt that the S&P after a six year move higher was due a correction and the big question is whether we are going to go back and test last Monday’s opening 1830 spike lower. Remember on the longer term charts a break and close below 1820/1830 could well see a move lower to at least 1650. Today given the fact that it is a Tuesday and the fact that we have such a large ‘open Gap’ this morning coupled with the fact that we should see new monies come in as we are at the beginning of the month, makes it difficult to go short here. For these reasons I will be a very small buyer on any further dip lower to 1921/1928 with a 1914 stop. If I am taken long and subsequently stopped out of this position I will be a more aggressive buyer from 1892/1903 with an 1878 stop.
EUR/USD
The Euro plan also worked well yesterday as the market had a nice sell-off to my 1.1190 buy level. Unfortunately I emailed all my Platinum Members to exit this position at 1.1215 and I am now flat. This morning on the back of the weaker equity markets the Euro is back trading above the key 1.1250 pivot point. Today I will be a small buyer on any dip lower to 1.1220/1.1250 with a 1.1185 stop. I still do not want to be short the Euro at this time.
September Dollar Index
My Dollar plan also worked well yesterday as the Dollar had a nice rally to my 96.25 sell level before getting hit overnight which enabled me to cover this position at my 95.85 T/P level as outlined earlier to my Platinum Members and I am now flat. Today I will again look to go short on any rally higher to 95.90/96.30 with a 96.60 stop.
September DAX
The DAX gapped lower through my buy level and stop on the opening this morning and I am still flat. Today I will move my buy level lower to 9930/9980 with a 9870 stop. I still do not want to be short the DAX at this time.
September FTSE
The FTSE has re-opened this morning after been closed yesterday for their Bank Holiday of the Summer. I find it very hard to go short the equity markets at the beginning of a new month especially with all the new monies coming into the market. For this reason I will look to buy the FTSE on any dip lower to 6080/6120 with a 6050 stop.
Dow Rolling Contract
The Dow plan also worked well yesterday as shortly after the US markets opened the Dow traded lower to my 16470 buy level before having a nice rally which enabled me to cover this position at my 16560 T/P level as again outlined to my Platinum Members and I am now flat. The subsequent rally higher just missed my 16650 sell level by 20 points before the Dow fell 400 points to a so far overnight low at 16235. Given the huge gap lower I will be a small buyer on any further dip to 16100/16170 with a 16050 stop.
September BUND
The BUND started to rally hard just as I posted yesterday morning which enabled me to cover this position at my 153.90 T/P level and I am now flat. Today I will again look to buy the market on any dip lower to 152.20/152.60 with a 151.90 stop. I will also be a small seller from 153.60/154.00 with a 154.30 stop especially given the fact that the Chinese are finally looking to exit some of their massive Bond holdings built up over the previous 10 years.
Gold Rolling Contract
Unfortunately Gold just missed my 1123 buy level by $2 before having a nice $20 rally and I am still flat. Today I will raise my buy level to 1123/1132 with a 1114 stop which is just below last week’s low print.
Silver Rolling Contract
I am still flat and today I will raise my buy level to 14.20/14.50 with a 13.80 stop.
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