U.S Equity Markets were choppy for most of yesterday’s trading session, before rallying in the last hour and close higher. Markets opened higher after the White House said it had discussed progress made under the Phase One trade deal with China and that both sides were still committed to the deal. They began to lose steam throughout the day after National Institute of Allergy and Infectious Diseases director Dr. Anthony Fauci warned that there are consequences to rushing a vaccine into mass production. Economic data was also mixed. New Home Sales surged in July, reaching the highest level since December 2006. And the Richmond Fed Manufacturing Index came in well above estimates. But Consumer Confidence was weaker than expected, hitting a six-year low on concerns in the labour market. The S&P and NASDAQ closed higher by 0.36% and 0.82% respectively. European Indices closed higher after the German IFO Business Climate Index data for August was stronger than expected, indicating business sentiment in Europe’s largest economy is quickly rebounding. Moderna (MRNA) said it had concluded advanced exploratory discussions with the European Union and was close to a deal to supply the region with as many as 160 million COVID-19 vaccine doses. The European Commission (“EC”) proposed $7 billion in financial support to help fund Portugal’s wage protection scheme. French Finance Minister Bruno Le Maire said the country will continue to use state-backed loans to help small businesses. Meanwhile. Oil closed 1.75% higher, back to its February Highs at $42.85, while Gold fell again as investors rotated into risk assets like Equities as Bond Yields rose.
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 196 points yesterday and is now ahead by 2091 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 0.36% higher at a price of 3443, a new all-time high.
The Dow Jones Industrial Average fell 60 points for a 0.21% loss to close at 28,248.
The NASDAQ 100 rose 0.82%, closing at a new all-time high at 11,721.
The Stoxx Europe 600 Index rose 0.6%.
The MSCI Asia Pacific Index fell 0.2%.
This morning the Nikkei closed flat at 23,290.
Currencies
The Bloomberg Dollar Spot Index closed flat.
The Euro closed 0.2% higher at $1.1832.
The British Pound closed 0.3% higher at $1.3135.
The Japanese Yen closed 0.2% higher at 106.25 per dollar.
Bonds
The yield on 10-year Treasuries closed four basis points higher at 0.70%.
Germany’s 10-year yield rose five basis points to -0.43%.
Britain’s 10-year yield also closed six basis points higher at 0.27%.
Commodities
The Bloomberg Commodity Index fell 0.3%.
West Texas Intermediate closed 1.75% higher at $42.85 a barrel.
Gold closed 0.1% lower at $1,926.10 an ounce.
This morning on the Economic Front we have no data of note from either the UK or the Euro-Zone, while the only U.S. release is Durable Goods Orders at 1.30 pm.
September S&P 500
The relentless move higher in the S&P continues no matter what the news. In a development that I have never seen before the S&P has only had one down day so far in August (11th) with every other trading day leading to a positive outcome. We have seen the S&P open lower by 1% on some of these trading sessions before turning around to close higher. 25% of the S&P Index is dominated by just five stocks, the most since 2000 with Retail leading the buying even though volume has waned almost every day this month. The S&P is on track to close higher for the fifth consecutive month since the 2170 low on March 23. As we know the Fed’s mantra is to calm markets and they have certainly done this with their unprecedented actions over the past five months. Despite the S&P and NASDAQ again closing at new all-time highs the VIX is struggling to get back to its pre-crash lows at 17.5, closing at 22 last night, while the McClellan Oscillator again closed in negative territory with a -79 print. I am still looking for a correction to at least the 3372 area given how overbought this market is . Today, I will continue to be a seller from 3457/3469 with the same 3481 stop. I will now raise my buy level to 3403/3418 with a higher 3391 stop.
EUR/USD
After rallying over 8% into the end of July, the Euro has traded sideways for most of August and I am still flat. I will continue to be a small seller from 1.1875/1.1915 with a 1.1955 stop. I am not going to chase the Euro higher and I will leave my 1.1700/1.1750 buy level unchanged with the same 1.1655 stop.
September Dollar Index
No Change as I am still a buyer from 92.30/92.70 with the same 91.95 stop.
September DAX
With so many of my calls hitting at the same time yesterday, I lowered my DAX buy level to 13010 before exiting this trade at my revised 13041 T/P level and I am still flat. As long as the DAX does not break and close below 12600 then we are still in an uptrend. Today, my buy level will be from 12830/12930 with a 12765 tight stop. I will now lower my sell level to 13150/13250 with a 13325 stop.
September FTSE
The FTSE continues to trade heavy. All rallies are met by aggressive selling with the market down close to 20% this year. Yesterday’s move lower saw the whole of my buy range being hit and I am now long at an average rate of 6055. I will now lower my T/P level on this position to 6071 with the same 5985 stop.
Dow Rolling Contract
My Dow plan worked well with the market trading the whole of my buy range for a 28150 average long position before rebounding to an overnight high at 28274. I covered this position at my revised 28204 T/P level and I am still flat. The Dow has strong resistance from 28400/28600 where I will be a seller with a 28730 tight stop. My only interest in buying the Dow is from 27870/24020 with a 27745 stop.
September NASDAQ
The NASDAQ 100 made its 35th new all-time closing high for 2020. As a result of this relentless move higher the NASDAQ is now trading well outside the top of its Monthly Bollinger Band. This similar pattern occurred at the tops of 2007,2011, 2012, 2018 and in February of this year. Each time we saw a reversion to the mean and in my opinion, risk is increasing despite the Fed’s actions. Yesterday my NASDAQ plan worked well with the market trading lower to my 11630 T/P level on yesterday morning’s latest 11680 short position. Subsequently I emailed my Platinum Members to go short again at 11680 before covering this position at 11650 and I am still flat. The NASDAQ has resistance from 11775/11875 where I will again look to sell with a higher 12005 stop. If I am taken short I will have a T/P level at 11715.
September BUND
The Bund got hit hard over the past 24 hours and I am now long at an average rate of 175.90 with the market trading at 175.65 as I go to press this morning. I will leave my stop unchanged at 175.35 while lowering my T/P level to 176.05. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
I am still flat the market which is selling off this morning. I will now lower my buy level to 1885/1898 with a lower 1873 stop.
Silver Rolling Contract
My Silver plan also worked well with the market trading lower to my 26.20 buy level before rallying to my 26.51 T/P level and I am now flat. Silver has support from 25.00/25.60 where I will again look to buy with a 24.35 stop.
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