European Indices ended yesterday with solid gains after Russia surprised the markets with an announcement from President Putin that he had cleared the for COVID-19 vaccine for use even though clinical testing has not finished. He hopes to begin mass inoculation in October. He said ‘’the first registration has taken place’’ saying that one of his daughters has already been given the vaccine. If this vaccine proves to be affective it will be a political coup for the Kremlin. European Indices soared on the news, led by Germany’s DAX which closed 2.1% higher and is now down only 2.2% for the year. In the U.S, markets were fairly mixed throughout the day. Stimulus remained a headline driver. Senate Minority Leader Charles Schumer (D-NY) said the Democrats are prepared to return to the negotiating table if the Republicans are open to a larger Coronavirus-stimulus bill. Treasury Secretary Steven Mnuchin said the White House would be willing to offer more relief money in order to reach a compromise. President Donald Trump also floated the idea of a Capital Gains tax cut in an attempt to support the economy and job growth. But White House officials have said it could be weeks before serious talks start up again. The rotation from growth into value and cyclical names continued, with the Dow outperforming and the Nasdaq underperforming. Small business optimism rebounded, but missed estimates, as uncertainty grew because of a recent rise in Coronavirus cases. Meanwhile negotiations on the next steps for U.S. stimulus are still deadlocked. Elsewhere, Silver closed 11% lower while Gold fell 5.45% on profit-taking after its recent run to new all-time highs. In other news, Democratic Presidential Candidate Joe Biden has chosen Senator Kamala Harris has his running mate for the November Election. This is not a surprise as she was long considered the front-runner for the number two job.
To mark my 2125th 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 555 points yesterday and is now ahead by 1084 points for August having ended July with a gain of 3128 points, 2580 points in June, 2456 points in May, 4773 points in April, an incredible 9264 points in March, 2223 points in February and 2142 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 S&P 500 closed 0.80% lower at a price of 3333.
The Dow Jones Industrial Average fell 104 points for a 0.3% loss to close at 27,686, having hit a new rebound high at 28,156.
The NASDAQ fell 1.90%, closing at 10,876.
The Stoxx Europe 600 Index increased 1.4%.
The MSCI Asia Pacific Index rose 0.9%.
This morning the Nikkei is closed 0.41% higher at 22,843.
Currencies
The Bloomberg Dollar Spot Index increased 0.2%.
The Euro closed flat $1.1740 after a volatile session.
The British Pound closed basically flat at $1.3054.
The Japanese Yen closed 0.3% lower at at106.50 per dollar.
Bonds
The yield on 10-year Treasuries rose eight basis points to 0.64%.
Germany’s 10-year yield closed four basis points lower at -0.49%.
Britain’s 10-year yield rose nine basis points to 0.20%.
Commodities
The Bloomberg Commodity Index fell 2%.
West Texas Intermediate fell 1.05% to $41.35 a barrel.
Gold weakened 5.45% to close at $1,930.10 an ounce.
This morning on the Economic Front we already had the release of UK GDP which came in at +8.7% versus +8% expected. Next, we have Euro-Zone Industrial Production at 10.00 am and this is followed at 1.30 pm by U.S CPI. Finally, we have the U.S Monthly Budget Statement at 7.00 pm.
September S&P 500
The S&P made a new recovery high at 3378.50 before following the NASDAQ lower. This move higher worked well as the S&P hit my 3378 sell level before falling to my 3370 revised T/P level. Given the fact that the market has almost completely reversed the 35% fall in Feb/March, you wonder what more good news can keep this rally going. Valuations are stretched at 26 times forward earnings while the S&P is now trading nearly three times above its Standard Deviation. We know from past experience that this is not sustainable. However, until we get a sell extreme, then this market can trade higher. Just before the close the S&P got hit hard, with the market trading lower to my 3335 buy level. I am still long and I will add to this trade at 3320 with a now lower 3311 stop. I will now lower my T/P level on this position to 3345 and if any of the above levels are hit, I will be back with a new update for my Platinum Members. I am reluctant to chase the S&P lower. The S&P has short-term resistance from 3365/3380 where I will again look to sell with a 3391 stop. If I am taken short I will have a T/P level at 3355.
EUR/USD
Despite the melt-down in precious Metals, the Dollar weakened yesterday with the process starting just after I posted yesterday morning. I am still flat the Euro and today I will raise my buy level to 1.1660/1.1710 with a higher 1.1625 stop. Meanwhile, I will lower my sell level to 1.1820/1.1870 with a 1.1905 stop.
September Dollar Index
No Change as I am still a buyer on any dip lower to 92.70/93.20 with a 92.35 stop.
September DAX
The DAX surged on the vaccine news. This saw the DAX trade higher to my sell range and I went short at a price of 12950. The DAX made a new recovery high at 13047 before getting slammed into the New York close and I was able to cover this position at my 12830 T/P level and I am now flat. The DAX has short-term support from 12600/12710 where I will again be a buyer with a 12515 stop. My only interest in selling the market is on a further rally to 13020/13120 with a tight 13185 stop.
September FTSE
Thankfully, we had no sell level in the FTSE yesterday with the market rallying over 100 points within two hours of yesterday’s commentary being published. The FTSE was due a rebound given how oversold the market had got over the past few weeks. In contrast to the DAX above, the FTSE is still down over 18% for the year. The FTSE has strong resistance from 6200/6280 where I will be a small seller with a 6325 tight stop. The late sell-off in US Indices sees the FTSE trading at 6120 this morning. We have short-term support from 6010/6060 where I will be a buyer with a 5965 stop.
Dow Rolling Contract
The Dow traded the whole of my sell range for a now 28050 average short position. After rallying over 2000 points in just eight trading sessions, this market is severely overbought. We finally saw a small sell-extreme into the close with the Dow falling almost 500 points from its 28155 afternoon high and this move lower enabled me to cover this position at my 27810 T/P level and I am now flat. I will continue to be an aggressive buyer from 27100/27300 with the same 26950 stop. If I am taken long I will have a T/P level at 27480. The Dow has resistance from 27980/28150 where I will again look to sell with a 28295 tight stop. If I am taken short I will have a T/P level at 27845.
September NASDAQ
The NASDAQ just missed both my buy and sell ranges yesterday and I am still flat. I will continue to be an aggressive seller from 11180/11280 with the same 11395 stop. I will now raise my buy level to 10790/10890 with a higher 10735 stop.
September BUND
The BUND sold off shortly after I posted yesterday and I am still flat. The BUND broke some key levels yesterday and I will now lower my sell level to 177.20/177.70 with a 178.15 stop.
Gold Rolling Contract
Both Gold and Silver got hit hard yesterday with Silver falling a huge 11%. This is the type of price action that I am looking for in the US Indices given the level of bullish sentiment toward these overvalued markets. Yesterday my Gold plan worked well with the market trading lower to my 1980 buy level before rallying to my 1989 T/P level. This morning, Gold is trading at 1988, almost $200 lower from where we trading last Monday morning. There will be massive margin calls as a result and we will see volatility pick up. Gold has support from 1840/1860 where I will be an aggressive buyer with a 1827 stop.
Silver Rolling Contract
Thankfully, after Silver hit my 27.05 initial buy level, I emailed my Platinum Members to exit any long position at my revised 27.30 T/P level and I am still flat. Silver closed at 26.20 in New York and is currently trading 200 points lower at 24.60- 20% lower than last Monday’ high. Silver has support from 22.90/23.90 where I will again look to buy the market with a wider 21.98 stop. If I am taken long I will have a T/P level at 24.60.
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