U.S. stocks advanced for the Third Quarter in a row as investors weighed the latest turns in the trade war between the world’s two largest economies. The US Dollar rose and Treasuries edged higher. The S&P 500 gained for a third month out of the last four after rebounding from August’s downturn. Tech fuelled the rise after the Trump administration partially refuted a report it would target Chinese capital, reversing losses sparked by the news Friday. Ten-year Treasury yields erased an early advance to trade lower around 1.67%, more than 30 basis points lower than it was at the end of June, after data showed weakening business activity. The US Dollar pushed quarterly gains toward 2.7%. The Pound fell as Prime Minister Boris Johnson fought off allegations of sexual impropriety and plots in Parliament to oust him over his Brexit plans. West Texas oil fell below $55 a barrel. Gold dipped for a second day, though it was still set for a fourth quarterly gain. Politicians determined to stop Boris Johnson leaving the European Union without a deal are trying to work out how to force the Prime Minister from office. They have hit upon an arcane constitutional trick that relies on Queen Elizabeth II to fire him, according to a person familiar with the matter.
To mark my 1900th 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 made 12 points yesterday, to close September with a gain of 1620 points, 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
The month is finishing much as it began, with foreign-trade uncertainty once again muddying the outlook for investors. Citigroup said that restricting access to U.S. finance would amount America’s most extreme potential move against China, while a Treasury official said over the weekend that the U.S. has no plans “at this time” to stop Chinese companies from listing on American exchanges. Beijing on Monday vowed to keep opening up its financial markets and encouraging foreign investment, and released a positive report on manufacturing. Based on the market’s lack of fear, the majority expect some sort of discussion to occur October 10th and that there will be encouraging developments as we move forward.
The S&P 500 Index rose 0.5% to close at 2977.
The Nasdaq Composite Index gained 0.8%, closing just above its 50 Day Moving Average.
The Stoxx Europe 600 Index increased 0.4%.
The U.K.’s FTSE 100 Index fell 0.2%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index increased 0.2%.
The British Pound fell 0.1% at $1.2280.
The Euro declined 0.4% to $1.0901.
The Japanese Yen decreased 0.2% to 108.11 per dollar.
Bonds
The yield on 10-year Treasuries fell one basis point to 1.67%.
Britain’s 10-year yield dipped one basis point to 0.48%.
Germany’s 10-year yield advanced less than one basis point to -0.57%.
Commodities
West Texas Intermediate crude sank 2.9% to $54.27 a barrel.
Gold decreased 1.8% to $1,480.00 an ounce.
Silver fell over 3% to $16.95.
This morning on the Economic Front we have German, Euro-Zone and UK Markit Manufacturing PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed at 10.00 am by Euro-Zone CPI. At 2.45 pm we have U.S. Markit Manufacturing PMI. Finally, at 3.00 pm we have ISM Manufacturing PMI and Construction Spending.
Speaking Wise Today: The Fed’s Clarida, Bullard and Bowman are all speaking this afternoon at 1.50 pm, 2.15 pm and 2.30 pm respectively.
December S&P 500
Unfortunately the S&P just missed my 2962 buy level before spending the rest of the day trading sideways to higher, closing at 2978. Shortly after the Futures Market re-opened last night the S&P has attracted more buying with the market now trading higher at 2992 as I go to press. It is next to impossible to be short this market for any length of time as remember at 8.30 pm last Friday we were trading at 2946. However despite this move higher the McClellan Oscillator again closed in negative territory with a -38 print. I am still flat the S&P and today I will now raise my buy level to 2969/2979 with a 2961 tight stop. If I am taken long and subsequently stopped out of this position I will be a more aggressive buyer on any further sip lower to 2942/2952 with a 2934 stop. I still do not want to be short the market at this time.
EUR/USD
Despite the Euro trading at the bottom of both is Daily Bollinger Band and Williams Index the market continues to weaken. Yesterday the Euro traded lower to my 1.0895 buy level. I am still long and I will now add to this position on any further move lower to 1.0850 with a now lower 1.0820 stop. I will also lower my T/P level on this position to 1.0925 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
December Dollar Index
Much to my aghast the Dollar rallied further and overnight I was stopped out of my latest 98.70 short position at 99.10 and I am now flat. The Dollar is now trading at three- year highs while the Daily Sentiment Index is now back above 91% bulls. I still believe that we are due a reversal in this market and today I will again look to sell the Dollar from 99.35/99.75 with a 100.10 stop.
December DAX
The weak Euro helped the DAX to close higher yesterday and I am still flat as the market again never came close to my buy level. Today I will raise my buy level to 12310/12370 with a 12255 stop.
December FTSE
The FTSE traded in a narrow range yesterday and I am still flat. Giving the worsening political situation in the UK I am reluctant to chase this market higher and today I will only raise my buy level slightly to 7290/7335 with a 7255 stop.
Dow Rolling Contract
The Dow’s low yesterday was 26830, just above my 26780 buy level before turning around to trade 200 points higher at 27050 this morning. As I mentioned in my Economic Commentary above, the market now fully expects a deal between the U.S. and China and in my opinion this is almost fully priced in to the market. The EPS ratio is now unsustainable at 31, up from a low of 18 in 2009, and a record low of 9 in 1982. Presently the U.S real structural growth is running at just 1.4%. We are also seeing pressure in the labour market resulting in lower margins for companies. This is not a good combination and will in time lead to much lower equity markets. Today I will raise my buy level to 26750/26900 with a 26680 tight stop. Despite my concerns I still do not want to be short the Dow at this time.
December NASDAQ
The NASDAQ was the strongest of the U.S. Indices yesterday with a 0.8% gain. Overnight the NASDAQ has rallied further and I have now gone short here is small size at 7815. I will add to this position at 7875 with a higher 7910 stop. I will also raise my T/P level on this position to 7780 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
December BUND
My Bund plan worked well with the market trading higher to my 174.30 sell level late in yesterday’s session. This morning the Bund us trading lower at 173.75. However as I wanted to be flat overnight I covered this position at my revised 174.18 T/P level and I am now flat. Today I will again look to sell the Bund from 174.20/174.60 with a 174.90 stop.
Gold Rolling Contract
The warnings about an overstretched DSI reading certainly proved its value again yesterday with Gold falling over 2% to trade the whole of my buy range for a 1472 average long position. I emailed my Platinum Members to exit any long position at 1476 and I am now flat. Gold has strong support from 1442/1452 and today I will be a buyer on any further dip to this area with a 1435 stop.
Silver Rolling Contract
Silver fell 3% yesterday to my 17.00 buy level. I am still long and I will now raise my stop on this position to 16.55 with a now lower 17.15 T/P level.
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