So much for this week being one of the seasonally strongest trading weeks for US Indices with the markets closing in a sea of red across board, with the Dow and S&P off 1.6-1.7% and the NASDAQ a cooler 3.17%. The ‘’FANG’’ sector is again driving the broader market weakness (the IT sector is off 4% within the S&P500), with Apple off another 3.5% on new reports of reductions in orders for three iPhone models – the stock is now 20% off its early October record high- and Facebook off 5% in conjunction with an ongoing purge of social media-related stocks in part on ongoing speculation regulation is coming to the sector. US stocks weakness follows a 7% plunge in the ADRs of Nissan and near 10% decline in its European partner Renault after the group’s Chairman Carlos Ghosn was arrested in Tokyo on charges of financial fraud (underreporting income, allegedly) and ousted from the firm.
To mark my 1700th 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 To demonstrate this value, a monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. 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 lost 80 points yesterday and is now ahead by 1111 points for November, having made 2094 points in October,1276 points in September, 599 points in August, 1074 points in July, 994 points in June, 1927 points in May, 1657 points in April, 1760 points in March and 2256 points in February. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
I have a YouTube Channel which contains recent interviews I have given. This can be viewed by clicking HERE Please subscribe to this for new interview notification
Economic Data/Fed Speak
Adding fuel to a weak opening for US stocks and bid for US bonds has been the US NAHB survey (homebuilder sentiment) which plunged by 8 points to 60 (vs the 1-point drop expected), its biggest drop in four years and lowest since August 2016. The NAHB said “customers are taking a pause due to concerns over rising interest rates and home prices”. NAHB also argue that “the decline of builder confidence should be noted by policymakers…given that housing leads the economy”.
Last week, recall, Fed chair Jay Powell acknowledged weakness in the housing sector, though downplayed its significance for the broader economy, suggesting it was less of an influence on aggregate economic activity than in the past. Homebuilders are now down over 30% since January.
Yesterday afternoon, we have heard from the (highly influential) NY Fed president John Williams in a Q&A event in the Bronx, who has failed to provide succour for the dovish interpretation that market chose to place on last Friday’s various Fed speakers. ‘’We will be likely raising interest rates somewhat but it is really in the context of a very strong economy,’’ Williams said. ‘’We are not on a pre-set course. We will adjust how we do monetary policy to do our best to keep this economy going strong with low inflation.’’
Bonds
Weaker US stocks and the aforementioned NAHB survey look to have taken up the mantle from interpretation of last week’s Fed speak to see the 2-year US Year Note off another 2bps to 2.78% and 10s -1bps to 3.057% (they were last lower at the early stages of the October US stock market slide). US 10-year ‘’break even’’ inflation rates, the benchmark market-based measure of inflation expectations, have just dipped below 2% for the first time since the start of January. Earlier Monday, 10 year Italian BTP yields jumped by 10.7bps back to the highest levels since October 24th and seemingly weighing somewhat on the Euro in afternoon European trade.
Currencies
Consistent with the risk-off- market tone in other asset classes, The Swiss Franc sits on top of the G10 FX leader board so far this week (JPY also firmer) and the NZD and the AUD at the bottom, both off a shade over 0.5% and meaning AUD/USD has failed to sustain Friday’s push up clean above 0.73. It is at 0.7291 now. NOK and CAD are also lower even though oil prices are fairly flat so far this week.
Of some note EUR/USD is performing well despite the latest widening in BTP-Bunds spreads to which is has tended to be quite highly correlated and weighed on the single currency in European trade. This is testament to the Euro’s partial safe-haven characteristics derived from its big positive ‘’basic balance’’ positon (current account surplus, FDI inflows and long term portfolio flows). EUR/USD gains today also means that the DXY US Dollar Index is 0.3% don on the day. A slightly firmer Pound is also relevant here with as yet no substantial new Brexit news (with as yet no formal challenge to PM May’s Prime Ministership)
Commodities
WTI crude and Brent are currently indicated up 30 and cents respectively but are jumping around. Base metals are mixed, copper again doing well on top of Friday’s 1.7% gain (+0.9%) aluminium less so (-0.3%). Gold is flat but platinum is continuing to recoup its early month losses, up another $7 or 0.8%. Iron ore futures are up 0.5%, metallurgical coal unchanged and steaming coal slightly higher.
This morning on the Economic Front we have no data of note from either the UK or the Euro-Zone. The only US data is Housing Starts/Building Permits which will be released at 1.30 pm. This data will be of added interest following yesterday’s plunge in the NAHB Index.
December S&P 500
I was lucky yesterday with my S&P call as after the market traded lower to my 2727 buy level the market rebounded to my 2735 T/P level. Subsequently the S&P traded lower to my second buy level at 2710 (as emailed earlier to my Platinum Members) before rallying to a high of 2720 which enabled me to exit this long position at 2714 and I am now flat. So much for the S&P trading higher this week with the S&P plunging to an intra-day low of 2680 before a late rally saw the market close at 2691. If the S&P continues to trade below 2700 for 2/3 days then we could well see a test of last Month’s low at 2607 ahead of the long-term support level from 2560/2590 where I would be an aggressive buyer. A break and close below this key 2560/2590 major support area would mean that we have a long-term top in the market. The S&P has initial support at the 2660 area and today I will be a buyer on any dip lower to 2653/2665 with a 2645 stop. Even though the price action is bearish I still do not want to be short the market at this time.
EUR/USD
The Euro has now rallied over 250 points since we made the 1.1215 low last Monday. I am still flat and today I am now going to chase this market higher and I will still be a buyer on any dip lower to 1.1320/1.1360 with a 1.1275 stop. The Euro has resistance at 1.1505 and if we can break and close over this key resistance level I will then move my buy level higher over the coming days.
December Dollar Index
I am still flat the Dollar and today I will now lower my sell level to 96.50/96.90 with a lower 97.30 stop.
December DAX
As so many of my Indices hit near the same time I waited to buy the DAX which I did at a price of 11260. Subsequently the DAX rallied to a rebound high at 11310 and I sued this rally to exit my long position at 11295 as emailed earlier to my Platinum Members and I am now flat. This morning the DAX is trading at 11150 as the market looks to test the key 11000 support area. Today I will again look to buy the market on any dip lower to 10970/11030 with a 10920 tight stop.
December FTSE
The FTSE traded lower to my 6975 buy level. I am still long and I will now lower my T/P level on this position to 7010. I will also raise my stop on this position to 6945 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Dow Rolling Contract
My Dow plan did not work well yesterday. After the market traded lower to my 25180 buy level I emailed my Platinum Members to exit any long position at a price of 25240. Unfortunately the Dow topped at 25236 before getting hit hard. I added to my long position at a price of 25000 for average position of 25090 before getting stopped out of this position near the low of the day at 24925 and I am still flat. The Dow fell over 600 points from yesterday morning’s high in another brutal day of selling. The Dow has strong resistance from 25100/25280 and today I will be a small seller on any rally to this area with a 25420 stop. The Dow has strong support from 24550/24720 and today I will be a buyer on any dip to this area with a 24475 tight stop. If I am taken long and subsequently stopped out of this position I will be a very aggressive buyer on any plunge lower to 23900/24100 with a 23750 stop.
December NASDAQ
The NASDAQ broke its October low as the market closed over 3% lower for its lowest close since April. Despite the aggressive selling in the three main US Indices the McClellan Oscillator only closed with a negative print of -31 which is strange given the scale of the recent sell-off. Yesterday my NASDAQ plan did not work well as after the market traded lower to my 6805 average buy level I was quickly stopped out of this position at 6735 and I am still flat. The market fell another 100 points led by Nvidia which now 28% lower since it reported its earnings last Friday. I am going to stay flat the NASDAQ unless we trade lower to the 6475/6300 major support area where I will be an aggressive buyer with a 6210 stop.
December BUND
No change as I am still a seller on any rally higher to 161.05/161.45 with the same 161.75 stop.
Gold Rolling Contract
Gold has now closed higher for five consecutive trading sessions for the first time this year as the market appears to be finally putting in a tradeable low off the key 1160/1200 support area. Today I will now raise my buy level to 1205/1215 with a higher 1197 stop.
Silver Rolling Contract
After a brutal trading year for Silver the market has now closed higher for four consecutive trading sessions for the first time in seven months and is compatible with a change of trend from down to up. I am still long the market at 14.30 with the same 13.80 stop and 14.55 T/P level. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Recent Comments