In the wake of yesterday’s weaker than expected Employment Report, the AUD/USD traded lower to 0.7110 from 0.7180 which has so far proven to be a base in a narrow trading range, with particular ground broken on the top or low side. LME base metal prices were practically unmoved. In the US the VIX Index is down slightly notwithstanding what’s proven to be a flat-to-softish trading session if US equities, while Iron ore spot rise continued its recent uptrend closing at $47.14 which is now up nearly 20% off its sub $40 level at the start of the year.
To mark my 1000th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2500 for my Platinum Daily Commentaries which includes 1/4 updated emails throughout the trading day. This offer is open to both existing and new members and if anyone is interested please email me on bryan@tradernoble.com for details.
For anybody following my Platinum Service it made 35 points yesterday and is now ahead by 1595 points for February having made 3365 points in January. Since I started this service last June it has made over 18000 points.
Yesterday was a similarly contained session for the remainder of the major FX rates, though Commodity currencies have in the latter part of the New York session given back earlier gains in the wake of the renewed oil price weakness with the the enthusiasm for production cuts waning. Earlier strength in the commodity – linked FX rates helped support the Australian Dollar. US Treasury Yields in net terms have eased with the two year and 10 year closing down 4bps and 7bps respectively as US data showed no new clear direction with a virtually steady Philly Fed Index in February, and a somewhat lower level of Weekly Jobless Claims at 262K. This is down from 269K last week.
Both WTI and Brent are, in net terms little changed from where they were 24 hours ago when the market was getting bulled up short – covering and hopes of a deal to limit production but have pulled back in afternoon trade and current sit at $30.40 and $34.10 respectively, thus giving back most of the gains in late Asian trade yesterday with oil at one stage looked like it could break $32 a barrel. Surprise, surprise, the Saudi Foreign Minister has said that other nations can freeze production but the Saudis will not take part, all but scuttling hopes of cobbling together a deal to restrict global production. Also dampening sentiment, the OECD cuts its global growth forecasts by 0.3% to 3.0% warning of markets at risk and continued FX volatility.
The past 24 hours have been very whippy for Sterling as the EU Leaders Summit started its two day meeting as the UK’s membership of the EU is discussed plus the ongoing refugee crisis. Various leaders have been providing semi – optimistic media grabs ahead of the Summit that a deal with the UK can be struck to satisfy the political aspirations of Europe and the UK, one that UK PM Cameroon will get the concessions on he is seeking and then able to campaign for a ‘yes/stay in’ vote in a UK Brexit referendum. Sterling has strengthened on hopes of a deal at the Summit but there is lots of water still to go under the bridge ahead of a possible June UK referendum.
This morning on the economic front we already had the release of German PPI for January which again disappointed with a -0.7 print versus -0.3 expected. At 9.30 am we have UK Retails Sales and Public Finances (PSNCR). This is followed at 1.30 pm by US CPI. Finally at 3.00 pm we have Euro-Zone Consumer Confidence.
The ECB’s Constancio and the Fed’s Mester are both speaking in New York this afternoon.
March S&P 500
I did not have much luck with my calls yesterday with the S&P twice missing my 1911 buy level by one Handle or less before each time going on to have a 10 Handle rally and I am still flat. The volatility has finally eased with the VIX now back below 20 for the first time in weeks while the McClellan Oscillator basically remained unchanged at +181 which is slightly lower than the +197 close on Wednesday. Today I will continue to look to buy the S&P on any dip lower to 1907/1913 with a tight 1901 stop. Again if I am taken long and subsequently stopped out any long position I will be a more aggressive buyer in front of 1890 with a 1883 stop. My only interest in selling the S&P is still on a rally higher to 1939/1946 with a 1952 stop.
Next Tuesday I am speaking in the IG Index Offices in Dublin at 6.00 pm and if anyone is interested in attending please register on the following link. There is no charge for this event. www.ig.com/uk/whats-driving-the-markets-today
EUR/USD
My Euro plan again worked out yesterday as the Euro is proving itself to be very resilient despite the ‘risk on’ sentiment. Yesterday the Euro traded lower to my 1.1085 buy level before having a nice rally which enabled me to cover this position at my revised 1.1120 T/P level and I am still flat. Today I will again look to buy the Euro from 1.1065/1.1095 with the same tight 1.1045 stop. I still do not want to be short the Euro at this time.
March Dollar Index
Unfortunately the Dollar just missed my 97.20 sell level with a 97.12 high print and I am still flat. Today I will lower my sell level to 97.10/97.40 with a 97.70 stop.
March DAX
Just as I posted yesterday morning the DAX exploded to the upside before selling off in the afternoon. However despite selling off the DAX is holding in quite well and should be well supported at the 9250/9300 area. To me the price action is telling you not to be short at this time and today I will raise my buy level to 9300/9350 with a 9245 stop.
March FTSE
With the ongoing EU Summit in Brussels to discuss the UK Membership I am going to leave my buy level unchanged at 5850/5890 as a rogue comment could easily see my buy level get tested. If I am taken long I will have a tight 5825 stop on this position.
Dow Rolling Contract.
I am still flat the Dow and today I will raise my buy level slightly to 16280/16340 with the same 16220 stop. Yesterday was probably the quietest trading session of the year so far.
March BUND
As I mentioned in my S&P commentary above about having no luck with my calls and this was frustratingly true in relation to the BUND which missed my 164.10 buy level by 13 points especially with the BUND trading at 165.20 this morning. I know it is insane that the BUND is trading below 20bps but the price action for now is telling you not to be short the market. Today I will raise my buy level to 164.40/164.70 with a 164.15 stop.
Gold Rolling Contract
Gold has traded all over the map over the past 24 hours with a 1200 low before rallying to near 1240. This morning Gold is back on the defensive and is currently trading at 1225. I am still flat Gold as I do not trust the market at these price levels. Goldman Sachs in a report out earlier in the week said that they can see Gold trade back to 1100 and then 1000 this year before the market finally puts in a major bottom. I do not know if Gold is going to fall that much but I would love to see Gold sell-off as it would give me a much better level to buy some core Silver. As I do not have much of an edge in Gold at this time I will leave my buy level unchanged at 1187/1195 with a 1179 stop.
Silver Rolling Contract
No change as I am still a buyer on any dip lower to 14.80/15.10 with the same 14.45 stop.
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