The US Non-Farm Payrolls headline rise of 287K comfortably exceeded the 180K expectation but at the same time was not backed up by the subsidiary details in the report with the Unemployment Rate higher, small net downward revision to the prior two months Payrolls and Hourly Earnings up just 0.1%. The data was seen as validating a continued wait and see approach from the Fed, with no US Primary dealer survey after the data believing the Fed will move before December even if the prospects for a September move are now less negligible than prior to the NFP report with a 12% implied probability up from 7%.
To mark my 1100th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2500 for my Platinum Service which includes 1/4 updated emails throughout the trading day. This offer is open to both new and existing members and if anyone is interested please email me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 190 points on Friday and is now ahead by 540 points for July having made 2550 points in June. The previous three months saw gains of 1532, 2175 and 2265 points respectively. Since I started this Platinum Service in June 2015 it has averaged a monthly gain of over 2200 points.
The S&P 500 briefly rallied through its May 2015 record high closing level before finishing just 1 point beneath at 2129.9 for a 1.53% gain. The VIX lost 1.56 points to close at 13.2, just above its year-to-date low of 13.1 seen on 1 April. In Bonds, the knee jerk sell-off in 10 Year Treasuries was soon bought back, with Yields finishing 2.7bp lower at 1.359%. Only the very front end saw net yield gains on the day with 2 year Treasuries closing 1.6bps higher at 0.60%.
In FX, the Payroll headline could not boost the US Dollar more than temporarily. Bloomberg’s BBDXY Index ended the New York session -0.31% while the narrower Dollar Index closed just 0.03% lower at 96.33, with USD/JPY – 0.23% at 100.54. However earlier this morning Japanese PM Abe has instructed the Japanese Government to compile another stimulus package. This has led to a 1.4% gain in USD/JPY to sit at 102 currently while the Nikkei closed 4% higher at 15,708. This rise has helped the European Markets to open higher as yet again the continued theme of trying to short any stock market for any length of time is just a waste of hard earned capital. Thankfully we had no short levels in our main Indices from last Friday’s Daily Commentary.
Commodities all bar Gold rallied on Friday, presumably boosted by the growth signal from US Pyrolls as well as a softer Dollar. WTI Crude added 30 cents to $45.41 and Brent 0.4 to $46.76. The LMEX Index gained 0.95% while Gold lost $3.70 to $1358.
Published on Sunday, China CPI for June rose by 1.9% y/y versus 1.8% expected with food prices +4.6% y/y and non-food +1.2%.
This morning we have no economic data of note form either the Euro-Zone or UK. This afternoon the EU Finance Ministers start a two day meeting in Brussels. The only US data of note is the Labour Market Conditions Index Change at 3.00 pm while at the same time the Fed’s George is due to speak on the economy.
September S&P 500
A solid week for the US stock market resulted in higher weekly closed for all the major US Indices. Friday’s breath and advancing volume was particularly strong, suggesting another wave up is underway. Thankfully we had no sell level in the S&P over the NFP number which is probably the first time that this has happened for me. The overnight further stimulus news from Japan is going to see the S&P open at a new all-time high which may result in the S&P eventually over the coming weeks hit my long term target at 2200/2240 that I have mentioned consistently over the past 12 months. This is going to inflate the stock bubble further but when the Central Banks continue to buy the market with their consistently easier Monetary Polices it is so difficult to stand in their way. If the S&P can close over 2130 this evening it will signal this breakout to the upside that I have been warning about. Today I will move my buy level higher to 2110/2117 with a 2104 stop. I will also be a small seller initially into this strong resistance at 2130 from 2133/2138 with a tight 2143 stop.
EUR/USD
My Euro plan worked well with the Euro hitting my 1.1010 buy level before having a nice rally which enabled me to cover this position at my 1.1055 T.P level and I am now flat. Today I will again look to buy the Euro on any dip lower to 1.0950/1.0980 with a 1.0925 stop. I still do not want to be short the Euro at this time.
September Dollar Index
My Dollar plan also worked well on Friday with the Dollar hitting my 96.70 sell level before selling off. I subsequently emailed my Platinum Members to exit this position at 96.35 and I am now flat. Today I will again look to sell the Dollar on any rally higher to 97.10/97.40 with a 97.75 stop.
September DAX
Initially the DAX spiked to my 9630 sell level on the NFP release. As everyone knows at this stage I am not really comfortable in been short any Index for too long a period and I also emailed my Platinum Members to exit this position at 9600 and I am now flat. Thankfully after I sent the email the DAX traded 30 points lower before rallying. Today with the market trading near 9800 on the Japanese stimulus news I will again look to go short on any further rally to 9790/9845 with a 9895 stop. I will also be a small buyer on any dip lower to 9570/9620 with a 9525 tight stop.
September FTSE
The FTSE just missed my buy level on Friday before trading higher and I am still flat. Today I will again move my buy level higher to 6480/6515 with a 6445 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
This morning in the after hours market the Dow is trading higher but is still well short of its 18,351 high print from May 19 2015. Today I will now look to sell the Dow on any move higher to 18270/18350 with a 18400 tight stop. Given the huge move in the Dow over the past two weeks I do not want to be long the Dow at this time, preferring instead to buy the S&P as noted above.
September BUND
The BUND finally hit my 168.00 sell level this morning. I am still short and I will leave my stop unchanged at 168.50.
Gold Rolling Contract
My Gold plan worked very well on Friday with the market hitting my 1337 buy level shortly after the NFP release. Overnight Gold traded as high as 1373 but unfortunately I covered this position too early on Friday at my 1345 T/P level as outlined earlier to my Platinum Members and I am now flat. Today I will again look to buy Gold on any dip lower to 1339/1347 with a 1333 stop which is just below last Friday’s low print.
Silver Rolling Contract
Silver had a wild trading range since I posted on Friday morning, trading as low as 19.21 after the NFP release to an overnight high at 20.72. Given the current Daily Sentiment Index reading I am reluctant to chase this market higher. However the price action continues to be bullish and today I will now move my buy level higher to 19.10/19.50 with a 18.70 stop.
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