U.S. Equity Markets bounced around again on jobs and inflation data, ending yesterday’s session higher, as both the Dow and S&P closed at yet another new all-time high. Labour market and inflation data were the big story of the day. Jobless Claims fell, matching estimates. While Initial Claims have stalled out around the 375,000 level, Continuing Claims continue to fall. The four-week moving average of continuing claims is at the lowest level since March 2020. This is an incremental positive for the labour market. In other economic data, Producer Price Index (“PPI”) came in well ahead of expectations, potentially fuelling investors’ inflation fears. Federal Reserve speakers were making headlines again, with San Francisco Fed President Mary Daly saying that the time to pull back on support was near. Daly said that she is in favour of the taper beginning late this year or early next year. European Markets rose for the tenth consecutive trading session. Euro-Zone Industrial Production fell in July from the previous month, marking the second straight month of declines, as supply-chain issues continue to limit manufacturing. The International Energy Agency lowered its demand forecast for crude in 2021, citing new waves of COVID-19. However, OPEC kept its demand outlook the same and said that the oil market should tighten up next year. The U.K. said that fully vaccinated citizens will not have to self-isolate when coming into contact with someone with COVID-19 starting next week. In Asia, the Chinese government laid out a five-year regulatory plan, promising broad oversight of the economy. Chinese new yuan loans hit an 18-month low, indicating the need for continued policy support. Treasury Secretary Janet Yellen was said to be planning a trip to China to continue trade talks. New Zealand announced that it would reopen its borders to international travel beginning in the first quarter of 2022. Elsewhere, Oil closed 0.40% lower after the IEA lowered its demand forecast for 2021, citing new COVID-19 variants, while Bitcoin fell 5%, closing below the key $45,000 support area.
To mark my 2375th 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 24 points yesterday and is now ahead by 563 points for August, having closed July with a gain of 996 points. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, having ended March with an impressive gain of 3769 points, 3286 points in February, 2077 points in January, and 2273 points last December. 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 0.30% higher at a price of 4460.
The Dow Jones Industrial Average closed 14 points higher for a 0.04% gain at a price of 35,499.
The NASDAQ 100 closed 0.41% higher at a price of 15,088.
The Stoxx Europe 600 Index closed 0.7% higher.
This morning, the MSCI Asia Pacific Index rose 0.1%.
This morning, the Nikkei closed 0.14% lower at a price of 27,977.
Currencies
The Bloomberg Dollar Spot Index closed 0.1% higher.
The Euro closed 0.1% lower at $1.1732.
The British Pound closed 0.3% lower at 1.3810.
The Japanese Yen rose 0.1%, closing at $110.29.
Bonds
Germany’s 10-year yield closed one basis points higher at -0.45%.
Britain’s 10-year yield closed one basis points higher at 0.60%.
US 10 Year Treasury closed one basis points higher at 1.35%.
Commodities
West Texas Intermediate crude closed 0.40% lower at $68.98 a barrel.
Gold closed 0.11% higher at $1,753.10 an ounce.
This morning on the Economic Front we already had the release of German Wholesale Prices which fell 1.1% versus +1.3% expected. At 10.00 am we have Euro-Zone Trade Balance and this is followed by U.S. Import/Export Price Index at 1.30 pm. Finally, at 3.00 pm we have the University of Michigan Consumer Sentiment.
September S&P 500
The S&P closed at yet another new all-time high, with the market rallying a massive 330 handles over the past eight weeks. We have not had a 5% correction in nine months as the most aggressive, extended rally shows no sign of ending. The VIX close 2.5% lower, which is the eighth consecutive fall for the Volatility Index. A renowned Equity Model that I follow remains exceptionally bearish of the S&P. This model runs from 0 to 100. In March 2020 it had a reading of 95.3. Any reading between 100 and 80 shows expectations of strong forward returns while a reading between 0 and 20 implies weak forward returns. The end of July this model had a reading of 0.0. This is the fourth consecutive month where this model has flashed a very cautious approach. The score of 0.0 for four straight months is the longest stretch since 2006, just before the Global Financial Crisis when the S&P lost over 50% of its value. Nobody knows what the trigger for the coming sell-off will be but with internals as weak as they are, there is a massive downdraft coming. Yesterday the S&P hit my sell range and I am now short at 4450 with a higher 4442 T/P level. I will leave my stop unchanged for now at a ‘’Closing Price’’ of 4471 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
EUR/USD
No Change. I am still a small buyer from 1.1660/1.1700 with the same 1.1615 stop. Ahead of the weekend I do not want to be short the Euro.
September Dollar Index
I am still flat as I continue to be a seller of the Dollar on any further rally to 93.30/93.80 while leaving my stop unchanged at 94.25. If I am taken short I will have a T/P level at 93.05.
September DAX
The DAX soared to a new all-time yesterday, led by the EuroStoxx which has now closed higher for ten straight sessions. This morning the DAX is trading at 15920. The market is severely overbought. We have resistance from 16030/16110 where I will be a small seller with a 16165 stop.
September FTSE
No Change. I am still a seller from 7205/7265 with the same 7305 stop.
Dow Rolling Contract
Frustratingly, the Dow missed my 35320 T/P level with a low of 35349 before rallying 150 points into the close. I am still short and I will continue to add to this position at 35570 while leaving my 35625 ‘’Closing Price’’ unchanged. I still do not want to be long the Dow at this time. I will now raise my T/P level on this position to 35360.
September NASDAQ
The NASDAQ traded higher to my 15085 sell level, just before the close. As I am still short both the Dow and S&P, I covered this short position at 15072 and I am still flat. Yesterday, the NASDAQ tested the key 14975 support area before following the S&P and Dow higher into the close. The NASDAQ has support from 14900/14980 where I will be a small buyer with a tight 14845 ‘’Closing Stop’’.
September BUND
The boring sideways action in the Bund has continued all – week and I am still flat. I will continue to be a seller from 176.95/177.45 with the same 177.81 stop.
Gold Rolling Contract
I am still flat Gold. Gold is again testing its 2 ½ year trendline this morning. I am reluctant to go short Gold ahead of the weekend and I am going to stay flat this contract until Monday.
Silver Rolling Contract
Silver traded lower to my 23.10 buy level before rallying to my 23.21 revised T/P level and I am now flat. Silver has support rom 22.10/22.70 where I will again be a buyer with a 21.48 stop. If I am taken long I will have a T/P level at 23.05.
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