U.S. Equity Markets ended a tumultuous session lower, while Treasuries rose as the latest political turmoil and trade headlines damped demand for risk assets. The S&P 500 Index slide for fourth time in five days in trading about 15% below the 30-day average volume. Stocks were under pressure after the release of a whistle-blower complaint central to the latest political drama and reports the U.S. is unlikely to extend a waiver allowing American firms to supply China’s Huawei Technologies. Defensive shares rose as Treasury Yields fell. Crude oil advanced on news the U.S. will send military equipment to Saudi Arabia. Impeachment and trade headlines continued to hit markets already on edge over signs of slowing global economic growth. The U.S. move to add air defense coverage in Saudi Arabia added to geopolitical unease. Data in the U.S. Thursday signalled the world’s largest economy remains on solid footing, though was unable to bolster market sentiment. Boris Johnson is refusing to back down after sparking outrage over his attacks on opposition politicians who are trying to stop him forcing Britain out of the European Union with no deal. He has accused them of “surrender” to the EU and dismissed their concerns that his war-like language was fuelling violence and division. In a private meeting on Thursday, the Prime Minister told Tory MPs he would not be bullied into changing the way he speaks. He said he wants a deal, but an agreement with the EU is not close.
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For anyone following my Platinum Service it made 30 points yesterday and is now ahead by 1356 points for September, having made 2387 points in August, 1153 points in July, 1346 points in June,1722 points in May, 955 points in April and 1027 points in March. 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
Markets appear to be more focused on President Trump’s foreign trade policy than his risk of impeachment. The wild card here is how this may impact White House decisions on trade negotiations. In addition, we will need to monitor whether further polarisation in Washington could have a knock-on effect on bipartisan cooperation over budget issues or infrastructure spending.
The S&P 500 Index lost 0.2% to close at 2978, having hit an intra-day low of 2961.
The NASDAQ 100 slipped 0.4%.
The Stoxx Europe 600 Index advanced 0.6%.
The MSCI Asia Pacific Index increased 0.2%.
The MSCI Emerging Market Index advanced 0.3%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index rose 0.2%.
The Euro lost 0.2% to $1.0920, as we closed at a new two-year low.
The British Pound fell 0.3% to $1.232.
The Japanese Yen fell 0.1% to 107.88 per dollar.
The New Zealand Dollar climbed and traders trimmed bets for more easing after the central bank governor said interest-rate cuts are working.
Bonds
The yield on 10-year Treasuries fell five basis points to 1.69%.
Germany’s 10-year yield declined one basis point to -0.58%.
Britain’s 10-year yield was unchanged at 0.537%.
Commodities
Gold futures were flat around $1,512 an ounce.
West Texas Intermediate crude was little changed at $56.50 a barrel.
This morning on the Economic Front we already had the release of German August Import Price Index which came in weaker than the -0.3% expected with a -0.6% print. At 9.00 am we have Euro-Zone Economic Sentiment Indicator, including Business Climate and Economic Confidence. This is followed at 1.30 pm by Durable Goods Orders and Personal Income/Spending. Finally, at 3.00 pm we have the University of Michigan Consumer Confidence Index.
Speaking wise today we have the Bundesbank President Weldmann at 10.10 am and the Fed’s Quarles at 1.30 pm.
December S&P 500
My S&P plan worked well with the market trading lower to my 2969 buy level before rallying to my revised 2973 T/P level with a 2985 high print and I am now flat. As long as we hold the key 2925/2950 support area I will continue to be a buyer on dips. Today my buy level will be from 2955/2965 with a 2947 stop. Ahead of the weekend I still do not want to be short the market at this time.
EUR/USD
Late last night the Euro traded lower to my second buy level at 1.0910 for a now average long position at 1.0933. The Euro is oversold and trading at the bottom of both its Daily Bollinger Band and Williams Index. On top of this the DSI for the Euro is close to single digits again. This morning I will leave my stop unchanged at 1.0870 while lowering my T/P level to 1.0950. If I am stopped out of this position I will be a more aggressive buyer from 1.0810/1.0850 with a 1.0775 stop. If I am taken long a second time I will have a T/P level at 1.0895.
December Dollar Index
Unfortunately the Dollar just missed my 98.40 T/P level with a 98.42 low print and I am still flat. I will now raise my T/P level on this position to 98.50 while leaving my 99.15 stop unchanged.
December DAX
The weaker Euro is helping the DAX to hold its key 12080/12140 major support area and I am still flat. Today I will move my buy level higher to 12140/12200 with a 12075 stop.
December FTSE
Normal service resumed in the FTSE yesterday as the weaker Pound finally led to a large rally in the market and I am still flat. Thankfully we had no sell levels in the market with the FTSE now trading 100 points higher than where I posted 24 hours ago. Today I will raise my buy level to 7270/7320 with a 7235 stop.
Dow Rolling Contract
The McClellan Oscillator continued to weaken yesterday closing at -40 while the VIX had a small rise. Volume was again on the weak size as the political drama plays out in Washington. The Dow again just missed my 26780 buy level with a 26803 low print before rallying 180 points and I am still flat. Today I will leave my 26630/26780 buy level unchanged with the same 26540 stop. Just like the S&P above I still do not want to be short the Dow at this time.
December NASDAQ
My short 7810 NASDAQ position worked well with the market trading lower to my 7775 T/P level shortly after the U.S. Markets opened and I am still flat. This morning we are trading slightly higher at 7795. We have strong resistance from 7840/7880 and I will be a seller on any rally to this area with a 7925 stop. Unlike the other Indices I no longer want to be a buyer of the NASDAQ at this time.
December BUND
I am still flat the Bund. Ahead of the weekend I will now raise my sell level slightly to 174.80/175.30 with a higher 175.65 tight stop.
Gold Rolling Contract
The fact that the US Dollar closed at a 2-year high saw Gold struggle. This morning Gold is opening lower at 1497 and as I have just been stopped out of my long Silver position I will now lower my Gold buy level to 1473/1483 with a 1465 stop.
Silver Rolling Contract
I have just been stopped out of my latest 18.10 long Silver position at 17.65 and I am now flat. Silver has strong support from 16.90/17.30 and I will be a buyer on any dip to this area with a 16.55 stop.
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