It has not been a massive 24 hours in terms of market direction, the Australian Dollar again capturing interest and making some further net gains, if pulling back from a little from its intra-session highs. The consolidation of some further net gains for the AUD is yesterday’s trading session has been against a backdrop of generally supportive day-to-day market trading metrics. While the spot price in Iron ore in China gave back another $1.30/t to $51.20, LME Base Metal prices gained another 1.0% with Copper, Nickel and Gold closing up 1.36%, 3.15% and 1.47% respectively. Helping ‘risk on’ sentiment was the fall in the VIX to 16.34 which is the lowest level since the start of the year. Oil prices are again little changed, as are 10 Year Treasury Bond Yields while the major US stock market Indices closed with slight gains having been lower earlier in the New York session.
To mark my 1000th issue of Tradernoble Daily Market Commentary I am offering a special 2 year rate of Euro 2500 for my Platinum Daily Commentary which includes 1/4 updated emails throughout the trading day. This offer is open to both new and existing members and if anyone is interested please email me on bryan@tradernoble.com for details.
For anybody following my Platinum Service it made 110 points yesterday and is now ahead by 320 points for March having made 2265 points in February and 3365 points in January. Since I started this service last June it has made over 20,500 points.
US economic data was broadly in line with expectations. Weekly Jobless Claims printed at 278K for the last week of February up 6K on the previous week, while US Non-Farm Manufacturing ISM Index for February came in at 53.4 only a fraction better than the 53.1 expected but coming with a sting, softness evident in the Employment component which fell to 49.7 from 52.1 ahead of this afternoon’s Payrolls.
The Bloomberg Spot DXY Index closed 0.5% lower, losing against the Commodity currencies and the Euro which is up a big figure at 1.0950 from where I marked prices 24 hours ago.
Robert Kaplan, Dallas Fed President and a non-voter this year has been speaking last night, urging caution from the Fed. ‘While I believe that excessive accommodation carries a cost in terms of distortions and imbalances of hiring, asset allocation and investment decisions, I also believe that, at this juncture, the Fed needs to show patience in decisions to remove accommodation.’ Finally he also said ‘This is particularly true in light of key global secular trends as well as recent developments relating to slowing global economic growth and tightening financial conditions’.
This morning on the economic front we have no data of note due from either the Euro-Zone or the UK. At 1.30 pm we have US Non Farm Payrolls Report for February which is expected to show a rise of 200K, an Unemployment rate of 4.9% and further growth in Average Earnings by 0.2% for a steady annual growth of 2.5%. The only other data release will be the US Trade Balance which will also be released at the same time as the Payroll Report.
March S&P 500
As expected the S&P did in fact trade higher to the lower band of the 1994/2010 still ‘Open Gap’ from the first trading days of 2016. I went short at 1992 but as most members know the one time that I go flat into an economic event is the NFP and so I covered this position at 1990 and I am now flat. However the McClellan Oscillator closed at +332 which is one of the highest positive readings that I can remember and I am certainly on the lookout to put on a short-term aggressive short position. Remember the MO is oversold below -250 and overbought over +250 so to see a +332 reading last night is incredible. Every short position has been slammed with this near 200 Handle move off the mid-February low print. Remember the S&P has another ‘Open Gap’ from 2012/2035 so in effect we have a massive Gap from 1994/2035 and as you know the S&P always fills these Gaps no matter how long the time frame. Today I will look to sell the market on any further rally to 1997/2005 with a wider 2015 stop which is just above the 2010/2012 level mentioned above. Given how overbought the MO my only interest in buying the market is on a dip lower to 1956/1963 with a 1949 stop.
EUR/USD
Following the initial break of the Euro at 1.09 and subsequent small sell-off I emailed all my Platinum Members that I had bought the Euro at 1.0898 ( a copy of the email sent to my Platinum Members is shown below as it gives you an idea of the detailed service that the Platinum Members enjoy) with a T/P level at 1.0950 which was duly filled as the Euro traded higher to 1.0973 and I am now flat. I am going to stay flat ahead of the NFP Report and following this report I will look to buy the Euro again on any dip lower to 1.0860/1.0890 with a 1.0825 stop. The price action is now telling me not to short the Euro as I look for the Dollar to weaken once we get past next week’s now key ECB Meeting.
March Dollar Index
The move lower in the Dollar at lunch time yesterday was one of the main reasons why I bought the Euro. I am still flat the Dollar and today I will lower my sell level to 98.20/98.50 with a tight 98.75 stop.
March DAX
I am still flat the DAX and today I will leave my buy level unchanged at 9610/9660 with the same 9570 tight stop. I will also look to sell the market on any rally higher to 9850/9910 with a 9960 stop.
March FTSE
No change as I am still a buyer on any dip lower to 6045/6075 with the same 6020 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
Late last evening the Dow finally hit my 16950 sell level. Despite the incredibly high +332 close in the McClellan Oscillator I am sticking with my strategy of going flat into the NFP release at 1.30 pm and as a result I have cut this position at 16936 and I am now flat. Today I will look to sell the Dow on any further rally to 16975/17050 with a 17110 stop. Given the high MO I do not want to be long the Dow at this time.
March BUND
Unfortunately the Bund just missed my 164.60 buy level with a 164.73 low print before having another 100 point rally and I am still flat. Today I will be a small seller from 166.10/166.40 with a 166.70 stop. I do not want to be long the Bund at this time especially with the March Contract expiring next week as we then roll to the June Contract which is trading at a discount of -265 points.
Gold Rolling Contract
Gold just exploded yesterday with the market now back trading above its key resistance at 1260 and I am still flat. I am going to stay flat Gold today as I want to see how the market reacts to the NFP data later this afternoon.
Silver Rolling Contract
My long 14.85 Silver position from early yesterday morning worked well but unfortunately I cover this position at my revised 15.10 T/P level and I am now flat. Today I will again look to buy Silver on any dip lower to 15.15/15.35 with a 14.65 stop.
This is a copy of the email that I sent to my Platinum Members shortly after 2.00 pm yesterday.
Hi Everyone
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