Europe had a very quiet trading session with many Continental Countries observing Assumption Day. The EuroStoxx 600 Index ended the day flat while the FTSE 100 continued its recent advance by closing 0.36% higher helped yet again by a weaker Sterling which closed at a three year low against the Euro at 0.87 and with a 1.28 Handle against the US Dollar. Remember just before we had the Brexit Referendum result these currency pair’s were trading at 0.76 and 1.50 respectively. Meanwhile the three main US Indices closed at yet another all-time high, helped by a rise in oil prices and other commodities which boosted commodity linked shares with mining, chemical and energy sectors outperforming.
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 50 points yesterday and is now ahead by 550 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.
Ahead of the release of the July Fed Minutes tomorrow evening, softer US economic data continues to weigh on the US Dollar. This time it was the Empire State Manufacturing Index which was the culprit, slipping to -4.2 in August from +0.6 in July and well below the +2 expected. As usual the stock market ignored this data and traded higher.
In contrast the risk on mood and rise in commodity prices has propelled the Australian Dollar to the top of the G10 Leader Board. Over the past 24 hours the AUD had gained 0.35% to trade just below 0.77 into the New York close. The rise in oil prices has helped the Canadian Dollar to rise 0.25%, but softer Trade data weighed on the Norwegian Kroner.
10 Year Treasury Yields have reversed some of the gains recorded on Friday following the weaker than expected Retail Sales figures. The rise in equity and commodity markets seemingly trumping the softer US data. The 10 Year Yield closed 5 basis points higher at 1.55%. Another factor weighing on US Treasury prices could have been a report from Bloomberg noting that the Hedge Fund Blackrock is reducing its exposure to long dated US Treasuries as increased hedging costs from Japan to Europe make investing in US Treasuries less alluring for some foreign investors.
This morning on the economic front we have UK Average Earnings, Unemployment, CPI and PPI at 9.30 am. At 10.00 am we have the Euro-Zone and German ZEW Economic Sentiment. At the same time the Euro-Zone will release its latest Trade Balance. This is followed at 1.30 pm by US CPI, Housing Starts and Building Permits. At 2.15 pm we have Industrial Production and Capacity Utilisation. Finally we have the Cleveland CPI at 4.30 pm.
Fed speaking wise today we have Lockhart and Bullard this afternoon.
September S&P 500
I am still flat the S&P which just missed my 2192 sell level with a 2191 high print. Total market volume was exceptionally light yesterday with most traders still on vacation. The S&P has strong resistance from 2195/2200 and today I will again look to sell the market on any rally higher to 2194/2199 with a 2205 wider stop. My only interest in buying the S&P is still on a dip lower to 2173/2178 with a 2168 stop. Any sell-off should be met by some buying ahead of the Fed Minutes tomorrow.
EUR/USD
I am still flat the Euro which tried to trade higher but was again met by strong resistance at the 1.1200/1.1220 level. To me it is only a matter of time before the Euro breaks higher, despite what Lockhart and Bullard may say about raising rates in their respective speeches this afternoon. Today I will now raise my buy level to 1.1120/1.1160 with a tight 1.1095 stop. Naturally I still do not want to be short the Euro at this time.
September Dollar Index
No change as I am still a seller on any rally higher to 96.20/96.45 with the same 96.80 stop. Given all the recent economic data I still do not want to be long the US Dollar at this time.
September DAX
With most of Euro closed yesterday for Assumption Day, the DAX traded in a very narrow range and I am still flat. Hopefully the release of the ZEW Sentiment data will lead to some volatility later. Today I will leave my buy level unchanged at 10575/10630 with the same 10515 stop. I will now lower my sell level slightly to 10845/10895 with a 10925 tight stop. Remember a break and close over 10900 will again be short term positive and could see the market accelerate to the upside.
September FTSE
The continued weakness in Sterling saw the FTSE again trade higher as expected with the market now very close to its 2000 high at 7000. To me it is only a matter of time before we hit 7000 especially as the market is only 60 points shy of this huge resistance level. Today I will now raise my buy level to 6850/6880 with a 6820 tight stop. I want to see how the market reacts at the 7000 level before committing to a short position but there is no doubt this market is very over extended and due a correction hence the tight stop on any long position taken.
Dow Rolling Contract
In hindsight I should have held on to my long Dow position from Friday as the market again traded to a new high. Thankfully we have not been short the Dow as yet again the poor bears are getting squeezed no matter what economic news is released. Today I will leave my buy level unchanged at 18480/18540 with the same 18425 tight stop. I still do not want to be short the Dow at this time especially as the US Dollar is beginning to weaken again.
September BUND
The sell-off in the Bund enabled me to buy the market at my 167.28 buy level. I am still long and I will now raise my stop on this position to 166.85. If I am stopped out of this trade I will be a more aggressive buyer in front of 166.40 with a 165.95 stop. I still do not want to be short the Bund at this time.
Gold Rolling Contract
Gold continues to hold the key 1310 now major support level. I am still flat and I will keep my buy level unchanged at 1313/1321 with the same 1305 stop.
Silver Rolling Contract
My long 19.75 Silver position from last Friday worked well with the market hitting my 20.00 T/P level mid-morning. Subsequently I emailed my Platinum Members to re-buy Silver again at 19.75. Overnight as I go to print my second Silver position today has just been exited at my 20.00 T/P level and I am now flat. Today I will again look to buy Silver on any dip lower to 19.55/19.85 with a the same 19.10 stop which is just below the key 19.20 support level. Remember the 19.00/19.10 is strong support and a break and close below 19.00 could see the market accelerate to the downside.
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