US Indices opened higher on strong economic data and vaccine optimism. The ISM Manufacturing Index hit a 19-month high in August based on strength in New Orders and Employment. On the vaccine front, AstraZeneca (AZN) and Oxford University launched a late-stage trial of their COVID-19 vaccine candidate in the U.S., with hopes to have results later this autumn. There were also positive stimulus headlines, after White House Chief of Staff Mark Meadows said the two sides were making “real progress” in negotiations. The tech-heavy Nasdaq continued to outperform, lifted by Big Tech, on the back of strong demand expectations from Apple (AAPL). Both the S&P and NASDAQ 100 closed at new all-time highs by rising 0.75% and 1.5% respectively while the Dow rose 400 points off its intra-day low to close with a gain of 0.76%. European Indices had a wild session, rallying early before selling off in the afternoon. A late comeback saw the DAX and Euro-Stoxx close lower by 0.1%, while the FTSE was again heavy closing 1.8% lower. Germany’s Economy Minister Peter Altmaier said the government does not expect this year’s economic contraction to be as severe as the 6.3% it originally predicted. European Central Bank Vice President Luis de Guindos said he expects economic activity to rebound sharply in the third quarter, after a very strong July and less robust August. The Kiel Institute for the World Economy said it expects global trade to bounce back from the Coronavirus pandemic quicker than the financial crisis. Elsewhere the Euro sold off after breaking $1.20 while Oil closed 0.66% higher as strong manufacturing data sparked optimism over the economic rebound.
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 lost 28 points yesterday on the first trading day for September having made 2383 points in August, 3128 points in July, 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 0.75% higher at a price of 3526.
The Dow Jones Industrial Average rose 215 points for a 0.76% gain to close at 28,646.
The NASDAQ 100 rose 1.5%, closing at a price of 12,292.
The Stoxx Europe 600 Index fell 0.1%.
The MSCI Asia Pacific Index rose 0.2%.
This morning the Nikkei closed 0.47% higher at 23,247.
Currencies
The Bloomberg Dollar Spot Index again closed 0.4% higher.
The Euro closed 0.3% higher at $1.1910.
The British Pound closed 0.1% higher at $1.3365.
The Japanese Yen closed 0.3% higher at 105.90 per dollar.
Bonds
The yield on 10-year Treasuries closed two basis points lower at 0.68%.
Germany’s 10-year yield closed three basis points lower at -0.43%.
Britain’s 10-year yield closed one basis point lower at 0.30%.
Commodities
The Bloomberg Commodity Index fell 0.2%.
West Texas Intermediate closed 0.66% higher at $43.05 a barrel.
Gold closed 0.1%lower at $1,966.10 an ounce.
This morning on the Economic Front we already had the release of German Retail Sales which fell 0.9% versus +0.5% expected. At 10.00 am we have Euro-Zone Producer Prices and this is followed at 12.00 pm by U.S MBA Mortgage Applications. ADP Employment Change will be release at 1.15 pm and this is followed by ISM New York Business Conditions at 2.45 pm. Finally, we have Factory Orders and a speech from the Fed’s Williams at 3.00 pm.
September S&P 500
The S&P has surged to yet another all-time high as this relentless rally slams all short positions. This is the most stretched market that I have seen in a very long time with so many divergences across all US Indices at this time. Although the VIX closed 1% lower last night at 26.12, we are still well above the August 17 low at 21.35. The VIX has broken a downward trendline and for the second consecutive session has closed above its 50 Day Moving Average. We are now entering an historically volatile seasonal period, and this is reflective in the VIX which is trading at six- week highs. Similar divergences between the VIX and the S&P occurred in February ahead of the 35% crash. On top of this the McClellan Oscillator is still in negative territory closing at -50. The S&P has traded the whole of yesterday’s sell range and I am now short at an average rate of 3533. I will now raise my stop on this position to 3551 while raising my T/P level to 3523. If any of the above levels are hit I will be back with a new update for my Platinum Members.
EUR/USD
The Euro broke 1.20 to hit a high of 1.2010, just missing my 1.2020 sell level before selling off to sit at 1.1900 this morning. I will now lower my buy level to 1.1790/1.1840 with a lower 1.1745 stop. I will also lower my sell level to 1.1975/1.2015 with a lower 1.2065 stop.
September Dollar Index
My latest 91.80 long Dollar position worked well with the market hitting my 92.05 T/P level and I am still flat. Despite yesterday’s late reversal, the Dollar is severely oversold. As long as we do not break and close below 91.00, I will continue to buy the dip and today my buy level will be from 91.60/92.10 with a wider 90.95 stop.
September DAX
The DAX had a wild trading session, surging to my 13110 sell level shortly after I posted before selling off to my 12880 buy level. I covered my short position at my 13050 T/P level while my long position was covered too early at my 12920 revised T/P level and I am now flat. I do not like the price action in Europe as the markets are only holding in because the US Indices are making new highs almost every day. The DAX has resistance from 13220/13320 where I will be a seller with a 13385 stop. I will continue to be a buyer on any dip lower to 12810/12910 with a 12745 stop.
September FTSE
My FTSE plan worked well with the market trading the whole of my buy range for a 5845 average buy level before rallying to my too tight 5865 T/P level and I am now flat. This morning the FTSE is opening higher at 5925. Given how oversold the FTSE is trading I still do not want to be short the market and my buy level today will again be from 5820/5880 with the same 5765 stop.
Dow Rolling Contract
The Dow has totally underperformed both the S&P and NASDAQ over the past two months and this is reflected by the fact that this morning the Dow is testing its June 26 spike and reversal high at 28,733. Yesterday, the Dow just missed my 28250 buy level with a 28281 low print before rallying 500 points and I am still flat. The Dow has trendline resistance from 28880/29120 where I will be a small seller with a 29225 stop. I will now raise my buy level slightly to 28250/28450 with a 28125 higher stop.
September NASDAQ
I was very unlucky with my NASDAQ short position yesterday as the market just missed my 12130 buy level by a few points before surging to my second sell level at 12290. This had me short at an average rate of 12240 before being stopped out of this position this morning at 12405 and I am now flat. The overnight surge in the NASDAQ has me asking the question is this the final blow-off top?. The narrowness of this rally is similar to the February high and as a result I have gone short here again at 12435. I will add to this trade at 12525 with a 12595 stop. I will have a T/P level on this position at 12340 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
September BUND
My BUND plan worked well with the market trading lower to my 175.20 buy level before rallying hard to sit 100 points higher this morning. Unfortunately, I covered this position too early at 175.37 and I am now flat. Thankfully, we had no sell levels in the Bund as I have mentioned countless times that the Central Banks cannot let Bond Yields rally given the level of Government Debt across the globe. Today, I will be a buyer from 175.45/175.85 with a 174.95 stop.
Gold Rolling Contract
Gold is trading off this morning and I am still flat. As I am long Silver I will now lower my Gold buy level to 1917/1932 with a 1904 stop.
Silver Rolling Contract
Silver reversed after I posted yesterday, after the Dollar rallied. I am now long at 27.80 and I will add to this trade at 27.10 with a now lower 26.65 stop. My T/P level is now at 28.20 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
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