The past 24 hours has been a night marked by a suicide bomb explosion in Times Square, an event that thankfully inflicted very contained damage to individuals and even less to market stability. The NZD sits at the top of the FX leader board, while at the other end, Sterling has been more volatile after last week’s trumpeting of a “deal” to proceed with further negotiations, principally over trade. The Pound wobbled and UK Gilts rallied. Equity markets were uneven in Europe (FTSE rose) while US markets again closed in positive territory, Treasury yields somewhat higher as are base metals, oil, and coal. Gold prices eased, as has the VIX.
To mark my 1475th 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 in this offer can you please email me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it was flat on yesterday as none of my calls got hit and is still ahead by 549 points for December, having made 823 points in November and 657 points in October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points.
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Oil prices have risen on news that the North Sea Forties Pipeline System – that carries 400kbpd of oil to Scotland – is being closed for repairs after the discovery of a crack, repairs apparently to take weeks rather than days. Spot Brent futures rose 2% on the news, WTI also supported, up 1%. The Russian Rouble and the Norwegian Kroner are both higher on the news. Base metals were stronger too ahead of Chinese November growth numbers on Thursday, better than expected trade growth from Friday followed up by higher than expected New Yuan lending and Aggregate Financing data released yesterday. Iron ore was mixed yesterday after a positive Friday.
It might be something of an overstatement to say that the Kiwi has been speeding, but it’s certainly been a top performer among G10 FX league over the past 24 hours. The flightless bird rallied immediately after the announcement yesterday afternoon that Adrian Orr is going to be the next Governor of the RBNZ. He is currently the head of the NZ Super Fund and will return to the RBNZ having previously been Deputy Governor of the RBNZ. He is certainly well-credentialed but whether he proves to be hawkish or otherwise remains to be seen.
The NZD jumped around 0.75% on the news of Orr’s appointment, extending those gains a little further overnight, although it remains within its recent 0.68-0.70 trading range.
Yesterday was a “bits and pieces” trading session for data, the Chinese lending data perhaps the more notable. US JOLTs Job Openings for October revealed fewer openings than expected, but an increasing in the hiring rate. The quit rate was steady, so no sign of increased labour turnover, often a wage inflation pick-up precursor. The NY Fed Survey of Consumer Expectations did though reveal a rise in earnings expectations, from 2.1% to 2.6%, a rate that is back to July’s level and tilted to those with less than a college education.
This morning on the Economic Front we have UK CPI. PPI and the House Price Index at 9.30 am. This is followed at 10.00 am by German and Euro-Zone ZEW Survey Current Situation/Expectations. At 11.00 am we have the US NFIB Small Business Optimism. Finally we have US PPI and the Monthly Budget Statement at 3.00 pm and 7.00 pm respectively.
December S&P 500
Despite contracting volume the S&P made a new all-time closing high as it looks to test last Monday’s contract high at 2665.25. Unfortunately yesterday’s 2649.25 fell short of my 2643 buy level and I am still flat as yet again the S&P rises ahead of an FOMC Meeting. The S&P has strong resistance from 2670/2680 which is a 6.5 year trendline and today I will now raise my sell level to 2669/2677 with a 2683 stop. If I am taken short and subsequently stopped out of this position I will be a more aggressive seller on any further rally to 2687/2700 with a wider 2712 stop. Today I will also raise my buy level to 2642/2650 with a 2637 stop.
EUR/USD
Unfortunately the Euro twice missed my 1.1755 buy level before rallying and I am still flat. I am not going to chase this market higher especially with Gold still on the defensive and I will leave my buy level unchanged from 1.1715/1.1755 with a 1.1680 stop. I still do not want to be short the S&P at this time.
December Dollar Index
The Dollar traded in a narrow range yesterday and I am still flat. Today I will leave my sell level unchanged at 94.10/94.45 with a 94.75 stop. Given the strength of the 92.50/92.85 support area I will also leave my buy level unchanged with the same 92.20 stop.
December DAX
Yesterday the DAX tried to break its key 13200 resistance level before failing and selling off small into the European close. I am still flat and nervous of this market. For this reason I am not going to chase the market higher and I will leave my buy level basically unchanged from 12970/13025 with the same 12930 stop. As we wait for the FOMC Meeting tomorrow I will now cancel my sell level as I do not want to be short the DAX at this time.
December FTSE
I am still flat the FTSE as thankfully I had no sell levels with the market rallying on the continued weakness in Sterling. The fact that the FTSE managed to close over 7420 is bullish and has to be respected. For this reason I will now raise my buy level to 7400/7430 with a 7370 stop.
Dow Rolling Contract
While both the S&P and NASDAQ are close to new all-time highs the Dow continues to lag. With the VIX closing last night at 9.34 we are close to the 9.00 level which has led to a subsequent Dow sell-off. Internally the market continues to be weak with the McClellan Oscillator closing at +50. If this was not an FOMC and Contract Expiration week I would be tempted to go short but instead I will wait to see if the Dow can rally further and I will leave my sell level unchanged from 24490/24560 with the same 24625 stop.
December NASDAQ
Yesterday was a frustrating trading session as I had the correct view in the NASDAQ but unfortunately the market just missed my 6330 buy level before rallying over 70 points and I am still flat. Today I will raise my buy level slightly to 6325/6355 with a 6290 stop.
March BUND
The BUND also just missed my 163.80 sell level with a 163.78 high print before having a nice sell-off and I am still flat. There is no doubt that the Bund is struggling in overbought conditions and has strong resistance at the 164.00 price level. Today I will raise my sell level slightly to 163.95/164.25 with a 164.55 stop.
Gold Rolling Contract
Gold continues to struggle as I wait for the Daily Sentiment Index to break into single digits. Yesterday’s late small sell-off saw the DSI hit 16% bulls and I am still flat. The 200 week Moving Average for Gold comes in at 1232 and this level should act as good support. Therefore today I will now lower my buy level slightly to 1226/1234 with a 1219 stop.
Silver Rolling Contract
No change as I am still long Silver at 15.75 and will continue to look to add to this position on any further move lower to 15.30 with a now lower 14.95 stop. Meanwhile Silver needs to break back above the 15.90/16.10 resistance level for the market to trade higher. I will leave my T/P level unchanged at 15.95 and if this happens I will be back with a new update for my Platinum Members.
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