A sell-off in the biggest Technology Stocks yesterday afternoon saw the U.S Indices break a four-day winning streak to post their lowest close in over a week in what turned out to be an extremely volatile trading session. The NASDAQ 100 was the biggest percentage loser, closing 2.70% lower with Apple -5% and Microsoft-4% leading the sell-off. U.S Jobless Claims rose yesterday for the first time since March which is the clearest sign yet that the increase in Coronavirus cases is impacting the economic recovery. Initial Claims increased to 1.42 million, an increase of 109,000 from last week. This uptick in Claims comes as Congress tries to agree on a fifth Stimulus Package, making this agreement more likely. Congress has a two-week window to come up with an agreement ahead of the summer recess. Not helping the mood was comments from Dr Mike Ryan (who is head of the Emergencies Programme at the WHO) saying that a usable COVID-19 Vaccine should not be expected until the beginning of 2021. The VIX closed 7.25% higher at 26.08. Elsewhere, U.S Treasuries weakened to 0.58% while the Dollar fell for the fifth consecutive trading session as Crude slumped. The weak Dollar saw both Gold and Silver hit multi-year highs. Overnight the Chinese Equity Markets fell over 3% and this is putting pressure on European Indices on the open with the EuroStoxx opening 1.3% lower.
To mark my 2100th 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
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Equities
The S&P 500 Index fell 1.23%, to close at a price of 3235.
The Dow Jones Industrial Average fell 353 points for a 1.31% fall to close at 26,652.
The Nasdaq 100 Index fell 2.70%, closing at 10,580, which is 290 points lower than Wednesday’s close.
The Stoxx Europe 600 Index closed 0.1% higher at a price of 374.10.
The Nikkei is closed until Monday.
Currencies
Here is a Summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index declined 0.1%.
The Euro rose 0.2% to $1.1593.
The British Pound closed flat at $1.2745.
The Japanese Yen added 0.3% to 106.84 per dollar.
Bonds
The yield on 10-year Treasuries fell two basis points to 0.58%.
Germany’s 10-year yield increased one basis point to -0.48%.
Britain’s 10-year yield closed flat at 0.12%, the lowest on record
Commodities
West Texas Intermediate crude dipped 1.6% to $41.24 a barrel.
Silver strengthened 1% to $22.90 per ounce.
Gold rose 1.% to $1880 an ounce
This morning on the Economic Front we already had the release of UK Retail Sales for June which came in much stronger than expected at +13.9%. Next, we have German. Euro-Zone, UK and U,S Markit Services PMI at 8.30 am, 9.00 am, 9.30 am and 2.45 pm respectively. Finally, at 3.00 pm we have U.S New Home Sales.
September S&P 500
Initially my S&P plan worked well with the market trading lower to my 3256 buy level before rallying back above 3270 and this move higher enabled me to cover this position at my revised 3264.50 T/P level. Unfortunately, I emailed my Platinum Members to buy the S&P again at an average rate of 3236 before getting stopped out of this position before the close at 3219 and I am no flat. We all know at this stage that it is just a handful number of stocks that have driven the S&P and NASDAQ since the March lows while the broader markets have gone nowhere since Mid-April. With the US Election a little over three months away there is no way that Congress are not going to pass a fifth stimulus before the recess in two weeks. The big questions will it be big enough to keep the US Indices from falling. The economy is still in recession as shown by yesterday’s awful Jobless Claims and certainly does not justify equity valuations at current prices. The S&P hit a rebound high shortly after I posted yesterday morning at 3284 before falling 70 Handles. These markets are nervous and due a correction. It may well be than when the fifth stimulus is announced that whatever subsequent high is put in, may well mark a significant top before Phase 3 of the Bear Market commences. The S&P has short-term support from 3178/3193 where I will be a buyer with a 3167 stop. I will now lower my sell level to 3245/3260 with a 3271 stop.
EUR/USD
The Euro has now rallied closed to 10% since the March low at 1.06, following the unprecedented stimulus packages across the Euro-Zone. Indeed, Ireland joined the party yesterday with its biggest ever cash injection in the form of Grants, Tax Cuts and Loan Guarantees to the tune of Euro 7.4 billion. This is still well below the Euro 130 billion announced by Germany last month. The Euro is severely overbought and I am looking for some profit taking at my 1.1640/1.1690 sell range. I am still a seller here with a 1.1745 stop. If we do get a move lower, I will be an aggressive buyer from 1.1445/1.1495 with a 1.1380 stop.
September Dollar Index
The Dollar eventually hit my second buy level at 94.70. This has me long at an average rate of 94.95. I will leave my stop unchanged at 94.45 while lowering my T/P level to 95.10.
September DAX
Late in the US session the DAX got hit hard and I bought the market near the bottom of my buy range at 12940. I am still long and I will now lower my T/P level on this position to 12985. I will also raise my stop on this position to 12845 and if any of the above levels are hit I will be aback with a new update for my Platinum Members.
September FTSE
The FTSE has opened 1.2% lower this morning with the market trading the whole of my buy range for a now average long position at 6125. I will now lower my exit level on this position to a small loss at 6110 with the same 6065 tight stop.
Dow Rolling Contract
The Dow had a wild 24 hours, trading to a high at 27140 shortly before lunch before selling off to an overnight low so far at 26480. With so many of my trades hitting at the same time yesterday including the Dow which I bought at 26880 before thankfully exiting this trade at my revised 26930 T/P level and I am now flat as I had no second buy level for the Dow yesterday. The Dow has strong support from 26130/26330 where I will be an aggressive buyer with a 25975 tight stop. Remember the 200 Day Moving Average comes in at 26233 and should offer decent support on any first test. Ahead of the weekend I do not want to be short the Dow at this time.
September NASDAQ
The NASDAQ has had a wild week, trading back above 11000 on Tuesday before getting hit hard over the past two days to sit at 10440 this morning. Yesterday after the NASDAQ hit my 10800 buy level I covered this position for a small gain at my revised 10835 T/P level as emailed to my Platinum Members and I am still flat. The NASDAQ has short-term support from 10250/10350 where I will again look to buy the market with a 10165 tight stop. I will now lower my sell level to 10700/10800 with a 10905 stop.
September BUND
No Change as I am still short at 176.60 with the same 176.35 T/P level. I will still look to add to this trade at 177.10 with the same 177.45 stop.
Gold Rolling Contract
I am still flat as Gold made yet another new nine-year high as the market looks to test the key 1900 resistance area. Even though Gold is severely overbought I am afraid to go short especially on a Friday. I will now raise my buy level slightly to 1845/1858 with a higher 1836 stop.
Silver Rolling Contract
With the DSI above 93%, it is no wonder that Silver is struggling to break and close over 23.00. I am still flat and I will continue to be a seller from 23.50/24.10 with the same 24.55 tight stop.
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