When the world did not end on the 31st of December 1999 the Dow Jones, S&P 500 and the NASDAQ all closed the Century making new record highs. Today sixteen years and 225 days later all three Indices have done it again, closing simultaneously at new record highs as the Dow finally traded over its July high at 18622.
To mark my 1150th 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 110 points yesterday and is now ahead by 435 points for August having made 1682 points in July. The previous three months saw gains of 2550, 1532 and 2175 points respectively. Since I started this Platinum Service in June 2015 it has averaged a monthly gain of over 2100 points.
The rally in equities was sparked by the move higher in oil prices following comments from Saudi Arabia’s Energy Minister saying that the Kingdom could participate in co-ordinated action to help balance the oil market. Equities were further boosted by better than expected earnings from Macy’s and Kohl’s. As a result consumer discretionary and energy stocks spearheaded broad gains across the market. Meanwhile European equities also closed higher, boosted by Zurich Insurance Group after it announced that profits fell less than projected.
The improvement in risk appetite pushed core Global Bond Yields higher with 10y US Treasuries climbing almost 6bps to 1.50%, while 10 Year Bunds and UK Gilts were up 1.8bps and 1.1bps.
Not surprisingly oil linked currencies are the G10 outperformers with the CAD and NOK sitting at the top of the Leader Board, up 0.50% and 0.36% respectively. True to form the improvement has weighed on the Japanese Yen given its safe-haven attributes.
Meanwhile the NZD is unchanged before the RBNZ lowered its OCR rate by 25bps by trading at 0.7210 which is exactly where it was before the rate announcement. Sterling got hit hard on weaker UK House Prices with EUR/STG now trading over 0.86. This weakness in Sterling helped the FTSE to rally by over 1.0%.
This morning on the economic front we have German CPI and GDP at 7.00 am. This is followed by UK Construction Output at 9.30 am. Next at 10.00 am we have Euro-Zone Industrial Production and GDP while at 1.30 pm we have US Retail Sales and PPI. Finally on what is a busy day for tier one data we have Business Inventories and the University of Michigan Consumer Sentiment at 3.00 pm.
September S&P 500
I am still flat the S&P on what was a busy day for equity markets following the record close for the S&P, NASDAQ and the Dow. However the Dow closed just below its July high at 18622. There is no doubt the Bear’s are getting squeezed everywhere as no matter what news comes out the market just rallies. As I keep saying that this trend will continue until we get a sell-extreme that last lasts for more than a few hours/days as the market now approaches my 2200 resistance level that I have consistently mentioned over the past twelve months. There is no doubt that this market is over-bought and over-valued but it is just a waste of hard earned capital in trying to short this market for any period of time. Today I will now raise my sell level to 2193/2199 with a 2205 stop. As the ‘’Breakaway Gap’’ has held since last Friday I will now raise my buy level to 2169/2175 with a 2163 stop.
EUR/USD
My Euro plan worked well yesterday as shortly before lunch the Euro traded lower to my 1.1140 buy level before having a nice rally over 1.1180 which enabled me to cover this position at my revised 1.1175 T/P level as outlined to my Platinum Members and I am now flat. While the Euro did break briefly and close over its seven week trendline at 1.1180/90, it could not hold this level and traded back below this now key resistance area yesterday. Today my only interest in buying the Euro is on a dip lower to 1.1060/1.1100 with a 1.1030 stop. Given the importance of the resistance from 1.1190/1.1240 I will be a small seller on any rally higher to 1.1210/1.1250 with a tight 1.1280 stop.
September Dollar Index
I am still flat the Dollar and today I will now raise my sell level to 96.50/96.80 with a 97.10 stop especially with the late sell-off of the Euro in the New York session.
September DAX
My DAX plan worked well as shortly after the European Markets opened the DAX traded higher to my 10730 sell level before having a nice sell-off which enabled me to cover this position at my 10685 T/P level and I am now flat. There is no doubt the DAX has strong support at the 10570/10630 area and today I will be a small buyer on any dip to this area with a 10515 stop. The DAX despite been so over-bought has no real resistance until the late December highs at 10866 and for this reason my only interest in selling the market today is on a rally higher to 10850/10910 with a 10945 tight stop.
September FTSE
My FTSE plan also worked well but you had to be quick as after the European Markets opened the FTSE traded higher to my 6840 sell level before having a quick sell-off which enabled me to cover this position at my 6810 T/P level and I am now flat. The FTSE has now rallied over 1100 points since its post Brexit low on June 24 and is extremely over-bought but just like the S&P above, until we get a sell extreme that sticks it is very difficult to be short. The continued weakness in Sterling is also helping the FTSE to rally. Today I will now raise my buy level to 6820/6855 with a 6785 stop which is just below yesterday’s low print. Despite the FTSE trading at the top of its Daily Bollinger Band I do not want to be short the market at this time as we approach the 2000 highs at over 7000.
Dow Rolling Contract
Unfortunately the Dow just missed my 18440 buy level with an 18480 low print before having a nice 160 points rally and I am still flat. Thankfully I had no sell level as I had anticipated a test of the July high. Today I will now raise my buy level to 18490/18550 with an 18435 stop. I still do not want to be short the market at this time.
September BUND
Finally very late in yesterday’s trading session the Bund hit my buy level at 167.35. I am still long but I did not like the price action after the market hit its 168 high print earlier in the trading session. The Bund has strong support at 167.20 and for this reason I will now raise my stop on this position to 166.90.
Gold Rolling Contract
Gold had a weak trading session yesterday. As I am now long Silver I will now reduce my buy level in Gold to 1313/1321 with a 1305 tight stop.
For any of my UK members who may be interested I am doing a special all-day trading seminar over the Non-Farm Payrolls in London on September 2nd 2016. I will be assisted by Paul Wallace who is a trader that I have done a lot of joint presentations in both Dublin and London over the past 12 months. Paul is a very engaging and interesting speaker and together we will try and take you through how to trade markets live over an important economic indicator. If anyone is interested in this not to be missed event in my opinion you can check the details out on the following link:
https://summer2016londonlivetradingday.eventbrite.com
Silver Rolling Contract
Shortly after the European markets opened yesterday morning Silver was trading at my 20.05 buy level. I am still long and I will now raise my stop on this position to 19.40. If I am stopped out of this trade I will be a more aggressive buyer in front of 19.20 with a 18.80 stop.
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