The “risk off” sentiment that overshadowed markets after the launch of yet another missile from North Korea did not even last 24 hours. Most stocks were in the red, mirroring Asia, risk currencies such as the Aussie and NZD were somewhat lower (the AUD/USD did not breach 0.79 though), with a bid tone added to bonds; yields lower as a result. The Japanese Yen, the Swiss Franc and gold were bid, volatility pushed up again. European stocks closed lower, as did European Bond Yields. Earlier in the US session, the US 10 year treasury yield traded below 2.09%. Running however against the grain, LME base metals closed higher, the LMEX index +1.62%, copper +1.88%, nickel +1.96% and ally +1.21%. Meanwhile Australian related bulk commodities were mixed. Risk-off sentiment persisted through the London session and into early NY trade, but then sentiment reversed. Ostensibly, it was the release of a stronger than expected Consumer Confidence from the Conference Board that might have done the trick.
To mark my 1400th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day. This offer is open to both new and existing members and if anyone is interested can you please contact me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 152 points yesterday and is now ahead by 1440 points for August, having made 1096 points in July, 1023 in June, 1076 in May, 1376 in April, 1335 in March, 1481 in February and 1734 in January. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1700 points.
Consumer Confidence in August (polled to August 16 so before Cyclone Harvey) rose from an already high 120.1 to 122.9, the second highest since 2000, that high in March this year. The net jobs plentiful index rose from 14.5 to 18.1, again at “highs”, this one since 2001, boding well ahead of Friday’s Non-Farm Payrolls report. Also released yesterday was the S&P/CoreLogic 20 cities House Price Index which rose 0.11%/5.65% in June.
Speaking of Harvey, the rain continues to fall in Houston and checking weather reports this morning, another two inches of rain are expected in the next 24 hours. There’s been over 40-50 inches of rain around the Houston area, the greatest amount in the Lower 48 states from a single storm and the largest flood in Houston-Galveston history, the US weather service reports. Near term WTI oil futures continued to ease further (though longer-dated contracts are up), while near term US gasoline futures jumped another 5.4%. Some US analysts are beginning to estimate that Harvey might dent US Q3 growth.
News overnight on President Trump is that after his visit to Texas he is going to Springfield, Missouri to deliver a major speech on tax reform tomorrow. US political website Politico is reporting President Donald Trump will launch a major push for a sweeping tax overhaul, selling the idea he has a fresh vision for “unrigging” the American economy. Politico is mentioning it will be long on rhetoric and short on detail, rates, deductions, loopholes in the tax system still to be worked through and clarified. Apparently there will be scene-setting statements around personal and corporate taxes.
Across the Atlantic, as the third round of formal Brexit talks gets underway this week, the Brits came in for a severe dressing down. EU President Juncker said that the UK discussion papers were “unsatisfactory”, they need to speed up and get serious, that the position papers were not good enough.
Chief EU Brexit negotiator Barnier said at a press conference with the UK’s Davis that he wanted the UK to come clean and say how much it is prepared to pay to leave the EU, still a major precondition from a European standpoint before any trade deal can be discussed, let alone settled. EUR/GBP continues its path at its highs, up a net 0.27% since yesterday’s London open.
This morning on the Economic Front we have UK Net Consumer Credit /Net Lending Secured on Dwellings at 9.30 am. This is followed by German CPI at 1.00 pm and the US ADP Employment Change at 1.15 pm. Finally we have US GDP at 1.30 pm.
Finally the Fed’s Powell speaks at a Bank Conference at 2.15 pm.
September S&P 500
The idea of buying the S&P had the 100 Day Moving Average worked perfectly again with the S&P trading lower to my 2421 buy level after I posted yesterday morning before rallying over 27 full points to a 2428 rebound high, and in the process missed by fractions in have an Upside Key Day Reversal. This rally higher enabled me to cover this long position at my 2427 T/P level and I am now flat. With month-end tomorrow ahead of a US Bank Holiday on Monday there is no point in trying to short this market. Yes the market is over-valued and due at least a 5/10% correction but until we break some key levels there is no point in trying to pick a top in the market. As I mentioned to my Platinum Members yesterday, the S&P needs to break its 100 Day Moving Average at 2421 and then test and close below the 2402/2405 June/July low before I will reverse my strategy. For now I will continue to be a ‘’buyer on dips’’. Today given the extent of the reversal yesterday I will now look to buy the S&P on any dip lower to 2434/2440 with a 2429 stop. Again if I am taken long and subsequently stopped out of this position I will be a more aggressive buyer on any further dip lower to 2405/2411 with a 2399 stop. I still do not want to be short the market at this time.
EUR/USD
Just as I posted yesterday morning the Euro was spiking higher. As I was already long the Dollar I waited to sell the Euro which I did at 1.2060 before using a subsequent sell-off to cover this position at my revised 1.2030 T/P level and I am now flat. With the Euro trading yesterday outside the top of its Daily Bollinger Band and at the top of its Williams Index it was no surprise to see some profit taking late in the New York session. Today I will look to sell the Euro on any rally higher to 1.2020/1.2055 with a 1.2080 tight stop. My buy level remains unchanged at 1.1850/1.1885 with a 1.1820 stop.
September Dollar Index
As i posted the Dollar continued to sell-off with the market soon hitting my second buy level at 91.55 to go along with my earlier buy at 91.80. As I now had a very large position I emailed my Platinum Members to lower their T/P level to 91.90 and I am still flat. Very late in the New York session the Dollar rallied hard into the close. This was a nice reversal off key support and I will continue with my strategy of buying dips in the Dollar given how severely oversold the market is now. Today I will again look to buy the Dollar on any dip lower to 91.75/92.15 with a 91.45 stop which was just below yesterday’s low print.
September DAX
My DAX plan also worked well with the market trading the whole of my buy range which put me long at an average rate of 11900. As I was already long the S&P and wanted to bank points where possible I covered this position too early at my revised 11920 T/P level and I am now flat. The late sell-off in the Euro certainly helped the DAX and if the Euro can trade sideways to lower today then we may well see the DAX reverse some of its large loses over the past few days. Today I will now look to buy the DAX on any dip lower to 11900/11950 with a 11850 stop which is just below yesterday’s low print. I still do not want to be short the DAX at this time.
September FTSE
Unfortunately the FTSE just missed my buy level before rallying strongly off its lows helped by EUR/GBP breaking over 0.93. I am still flat and today I will now raise my buy level to 7295/7335 with a 7259 stop. Ahead of month-end tomorrow I still do not want to be short the market at this time.
Dow Rolling Contract
Unlike the S&P which just missed having a Key Day Reversal, the Dow did and it was a significant one with the market rallying 250 points off its 21647 low print. I am still flat as the market fell short of my buy level but thankfully we were not caught short. As I mentioned yesterday for me to turn bearish of the Dow I need to see the market break and close below 21500. This is still a bull market despite all the negativity in the press. Today I will now raise my buy level to 21770/21835 with a 21720 tight stop. I still do not want to be short the market at this time.
September BUND
My Bund plan also worked well with tge market trading higher to my 165.60 sell level before eventually selling off after the Equity markets reversed to the upside and I was able to cover this short position at my 165.40 T/P level and I am now flat. The Bund is severely overbought and due a correction which may not come until after tomorrow’s US Payroll data. Today I will again look to sell the Bund on any rally higher to 165.35/165.75 with a 166.05 stop.
Gold Rolling Contract
After a couple of strong up-days in Gold we finally saw some profit taking yesterday which was expected given the fact that Gold is trading outside the top of its Daily Bollinger Band. Gold made a late low at 1305 thus missing my 1303 buy level before rallying. As I am long Silver I will now lower my Gold buy level slightly to 1293/1300 with a 1287 stop.
Silver Rolling Contract
Late in the New York session Silver traded lower to my 17.35 buy level. I am still long and will only add to this position on any further move lower to 17.00 with a tight 16.80 stop.
Recent Comments