U.S Indices fell hard yesterday as technology weakness continued to weigh on markets on a what turned out to be a wild trading session. Sellers took markets down near their 50-day Moving Average, and a close below could spark more selling. Given tech’s large weighting in the markets, any sell-offs here will drag broader markets down. After their recent surge higher, there are concerns that valuations may be too stretched. And vaccine optimism could weigh on the sector, as an effective vaccine could ease demand for remote-connectivity products. On the stimulus front, White House Chief of Staff Mark Meadows said he believes that a deal could be reached before the election. But there are concerns that a deal will not get done. European Indices closed lower as the rift between the EU and the UK accelerates over the Withdrawal Agreement. The European Union and U.K. were at odds over continuing trade talks after the British government revealed it was considering legislation to override parts of the Brexit agreement. German Export and Import data for July were weaker than expected and fell versus June, indicating the regional economic rebound may be slowing. Saudi Arabia cut prices for October oil shipments to Asia and the U.S., its first such move in five months, and a sign demand may be easing. Bank of England Chief Economist Andy Haldane warned against extending protections for furloughed workers, saying it would hurt the economy’s “much-needed restructuring.” Oil fell a hefty 7% on demand worries while Gold closed flat after a volatile session. Shortly after 10.00 pm last night it was announced that final clinical trials for a Coronavirus, developed by AstraZenca and Oxford University were put on hold after a patient fell ill. Equity Futures Markets got hit hard on the re-open before reversing after a spokesman said it was ‘’a routine pause in the case of an unexplained illness’’.
To mark my 2150th 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 155 points yesterday and is now ahead by 349 points 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 2.72% lower at a price of 3331.
The Dow Jones Industrial Average closed 632 points lower for a 2.25% decline at a price of 27,500.
The NASDAQ 100 closed 4.77% lower at a price of 11,069.
The Stoxx Europe 600 Index fell 1.1%.
The MSCI Asia Pacific Index fell 1.1%.
This morning the Nikkei closed 1.04% lower at 23,032.
Currencies
The Bloomberg Dollar Spot Index again closed 0.4% higher.
The Euro closed 0.3% lower at $1.1793.
The British Pound closed 1.5% lower at $1.2965.
The Japanese Yen closed 0.3% higher at 105.90 per dollar.
Bonds
The yield on 10-year Treasuries closed four basis points lower at 0.67%.
Germany’s 10-year yield closed four basis points lower at -0.50%.
Britain’s 10-year yield closed six basis points lower at 0.19%.
Commodities
The Bloomberg Commodity Index fell 1.2%.
West Texas Intermediate closed 7.05% lower at $36.72 a barrel.
Gold closed unchanged at $1,930.10 an ounce.
This morning on the Economic Front we have no data of note from either the UK or the Euro-Zone. At 12.00 pm we have the latest U.S MBA Mortgage Applications and this is followed at 3.00 pm by the JOLTS Job Openings. At the same time we will have the Bank of Canada Interest Rate Decision.
September S&P 500
The S&P got hit hard on the re-open of the U.S Markets after been closed on Monday for Labour Day. The S&P fell over 100 Handles in what turned out to be a brutal sell-off. This resulted in a large 46 Handle Gap from Friday’s 3426 Chicago close to yesterday afternoon’s 3380 rebound high. Shortly after the Futures Market re-opened at 11.00 pm last night we tested the 50 Day Moving Average (3305) with a 3296 low print before bouncing this morning to a high of 3353. We have sold off as I am writing this commentary to sit at 3335. The S&P traded the whole of my buy level for a 3402 average buy level before stopping me out of this trade at 3381. Subsequently the S&P traded lower to my second buy level at 3336 before thankfully rallying to my 3345 T/P level ahead of another late sell-off into the close. The S&P has now fallen almost 300 Handles since its 3586 all-time high from last Wednesday. The S&P is oversold and with the September Contract expiring on Friday week I would expect some consolidation ahead of Expiration. Today I will be a buyer of the S&P from 3280/3298 with a 3265 stop. Given the aggressiveness of the sell-off over the past few days I have to believe that last week’s high could be the start of a longer-term move lower. The S&P has resistance from 3395/3420 where I will be a seller with a 3435 stop.
EUR/USD
After the Euro traded lower to my 1.1780 initial buy level we had a small bounce and I covered this position at my 1.1800 revised T/P level and I am now flat. As long as the Euro can hold its 50 Day MA at 1.1660 then the Euro will continue to be a buy on dips. All eyes will turn to the ECB Meeting tomorrow where ECB President will try and talk the Euro lower. Today I will be an aggressive buyer from 1.1660/1.1710 with a 1.1615 stop. I am not going to chase the Euro lower and I will leave my 1.1875/1.1925 sell level unchanged with the same 1.1961 stop.
September Dollar Index
I am still flat and I will now raise my buy level to 92.70/93.10 with a higher 92.25 stop.
September DAX
My DAX plan worked well with the market trading the whole of my buy range for a 12915 average long position before we rallied to my 13010 revised T/P level and I am now flat. European Markets are holding in despite the recent weakness in the US Indices. The DAX has support from 12720/12820 where I will be a buyer with a 12645 stop. If I am taken long I will have a T/P level at 12890.
September FTSE
My FTSE plan worked well with the market trading lower to my 5870 buy level before rallying to my 5915 T/P level and I am still flat. The weakness in Sterling is helping the FTSE from trading lower. The FTSE is oversold and has short-term support from 5820/5870 where I will be a buyer with a 5775 stop.
Dow Rolling Contract
The Dow has traded in a huge 1300 point range since I posted yesterday morning on what turned out to be the most volatile trading session since early June. After I bought the Dow at an average rate of 27980 I was quickly stopped out of this position at 27745. I noticed that the VIX was reasonably stable given the hit to the US Indices and I emailed my Platinum Members to buy the Dow again at 27630 before covering this position at my 27820 T/P level. Subsequently I bought the Dow again at an average rate of 27580 before thankfully we rallied to my 27640 revised T/P level ahead of the close and I am still flat. Overnight we tested the 50 Day MA at 27160 which is holding for now. After falling 2000 points since last Thursday’s 29199 high print the Dow is oversold and due a bounce. Just like preventing Bond Yields from rising the Fed cannot afford a new crash in stocks given all the money that they have pumped into the markets since the March 23 lows. On top of this we have the US Election in eight weeks and they certainly will do everything in their power to prevent such a scenario. The Dow has support from 26980/27200 where I will be a buyer with a 26825 stop. If I am taken long I will have a T/P level at 27380.
September NASDAQ
An incredible move lower in the NASDAQ since last week’s 12500 high as the market hit an overnight low at 10,935. Yesterday the NASDAQ traded the whole of my buy range for a 11265 average long position. Subsequently we bounced to a rebound high at 11380 which hopefully gave you a decent gain. I did not take mine and as the NASDAQ closed above its 50 Day MA (11060) I am still long. I will now lower my T/P level on this position to 11300. If I am stopped out of this position I will be an aggressive buyer on any further dip lower to 10700/10900 with a wider 10525 stop If I am taken long a second time I will have a T/P level at 11150.
December BUND
The BUND never came close to my buy level as the market rallied 80 points on the equity rout. Central Banks cannot afford for Bond Yields to rise given the amount of debt and they will continue to ‘’manage’’ the yield curve. I will now raise my buy level to 173.40/173.85 with a higher 172.95 stop.
Gold Rolling Contract
My Gold plan worked well with the market trading lower to my 1905 buy level before rallying to my 1915 T/P level and I am still flat. Today, I will again look to buy Gold on any dip lower to 1890/1903 with the same 1878 stop.
Silver Rolling Contract
I am still flat Silver with the market trading lower at 26.60 this morning. We have support from 25.20/25.70 where I will be a buyer with a 24.65 stop. I no longer want to be short Silver at this time.
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