U.S. Equities closed at a record high for a second straight day, and recorded a second consecutive weekly advance, as investors remained cautiously optimistic about prospects for easier monetary policy, despite a bigger-than-projected rise in a key inflation measure. The US Dollar retreated for a third day. The S&P 500 Index rose Friday, led by technology and industrial shares, while drug stocks continued to weigh on the benchmark. An unexpected increase in American producer Prices seemed to do little to alter investor sentiment toward the Federal Reserve’s next policy move. Treasury 10-year yields slipped. Bitcoin slumped in another large weekend move after U.S. President Donald Trump’s criticism of cryptocurrencies late last week put the focus back on this year’s jump in prices. The largest cryptocurrency tumbled 15% since Friday to trade at $10,200 as I go to press, after briefly falling as low as $9,900. Other coins also retreated: Ethereum dropped 23% and Litecoin fell 17%.
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For anyone following my Platinum Service it made 58 points on Friday and is now ahead by 683 points for July, having made 1346 points in June,1722 points in May, 955 points in April, 1027 points in March, 1013 points in February and 1671 points in January. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Equities
The rally in risk assets is continuing to benefit from Federal Reserve Chairman Jerome Powell’s dovish comments last week, even after strong U.S. consumer inflation data on Thursday offered a potential complication to policy makers when they set rates at the end of the month. The S&P 500 Index climbed 0.5% to yet another new all-time high of 3013. The Stoxx Europe 600 eked out its first gain of the week, while shares dipped in Australia and Japan and posted modest gains in Hong Kong, China and South Korea, Meanwhile, the U.K.’s FTSE 100 Index fell 0.1%.
Currencies
Here is a summary of the main changes in F.X. Markets:
The Bloomberg Dollar Spot Index declined 0.3% to the lowest in over a week.
The Euro rose 0.2% to $1.1271, where it is opening in London this morning.
The British Pound advanced 0.4% to $1.2573, the strongest in more than a week.
The Japanese Yen climbed 0.6% to 107.86 per dollar, the biggest gain in over three weeks.
The lira weakened after Turkey said it started receiving parts of a Russian-made missile defense system, a move opposed by the U.S.
Bonds
The yield on 10-year Treasuries declined three basis points to 2.11%, the biggest drop in over a week. Government bonds extended declines in Europe, heading for the worst week since at least October, after industrial output data for the Euro region beat expectations. Germany’s 10-year yield gained two basis points to -0.21%, the highest in more than five weeks, while Britain’s 10-year yield decreased less than one basis point to 0.835%.
Commodities
West Texas intermediate crude gained as operators in the Gulf of Mexico braced for Tropical Storm Barry, closing 0.1% higher at $60.26 a barrel. Finally, Gold gained 0.8% to $1,414.69 an ounce.
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 the New York Empire State Manufacturing Index which will be released at 1.30 pm.
September S&P 500
Last Friday’s market session felt like a Friday in the summer, quiet and relatively slow. The big board volume was the slowest of the week, with approximately 5.7 billion shares traded. I am still flat the S&P as yet again the market closed at a new all-time high as we approach my long-term objective of 3050/3100. The S&P is overbought having risen almost 300 Handles since its 2728 low print on June 3rd. Today I will raise my sell level slightly to 3028/3038 with a higher 3046 stop. I will also raise my buy level to 2992/3002 with a 2985 tight stop.
EUR/USD
The Euro just missed my 1.1230 buy level with a 1.1238 low print before having a small rally into the New York close and I am still flat. I am not going to chase the Euro higher and today I will leave my 1.1190/1.1230 buy level unchanged with the same 1.1155 stop.
September Dollar Index
No Change as I am still a buyer on any dip lower to 95.80/96.20 with the same 95.35 stop.
September DAX
Despite the rally in the US Indices to new highs, the European Indices are struggling, especially the Euro-Stoxx and the DAX. I am still flat the DAX which is so far holding the 11200/11250 support area. Today I will continue to be a buyer on any dip to this area with the same 12165 tight stop.
September FTSE
Overnight the FTSE traded lower to my 7425 buy level before rallying to my revised 7538 T/P level as emailed earlier to my Platinum Members and I am now flat. Today I will again look to buy the market from 7370/7410 with a 7335 stop.
Dow Rolling Contract
The Dow was again the strongest of the US Indices, rallying 0.9%, to close at a new all-time high of 27.332. Internally the market is weak as shown by the McClellan Oscillator which again closed barely in positive territory which is a worry when you consider that the Dow, S&P and NASDAQ all closed at record highs. Meanwhile the VIX did close lower at 12.34. Please keep a close eye on the VIX as this market is severely oversold and if the VIX can spike higher then we may finally see a more sustained sell-off in the Dow. Late on Friday after the Dow traded higher to my initial 27260 sell level I emailed my Platinum Members to exit any short position at 27230 and I am still flat. The Dow is up against a major trendline and has strong resistance from 27420/27570 where I will be a small seller with a 27655 stop. I no longer want to be a buyer of the Dow at this time.
September NASDAQ
I am still flat the NASDAQ and today I will now raise my sell level slightly to 8025/8075 with a higher 8115 stop.
September BUND
No Change as I do not want to chase the Bund lower and I will leave my 172.25/172.65 sell level unchanged with the same 173.05 stop.
Gold Rolling Contract
In my opinion it is only a matter of time before gold breaks its 1450 so far Double Top. When this happens, it will lead to another large move higher. I am still flat the market and today I will raise my buy level to 1392/1402 with a 1384 stop.
Silver Rolling Contract
Overnight Silver finally traded higher to my 15.25 T/P level on my latest 15.10 long position and I am now flat. Silver continues to underperform Gold and today I will again look to buy the market on any dip lower to 14.85/15.15 with a 14.60 tight stop.
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