We had three main developments yesterday, a spike in oil prices, a somewhat more content ECB President and a renewed warning a bout the strength of the Australian Dollar from RBA Governor Stephens in an AFR interview which sees the AUD/USD trading at 0.7640 this morning from over 0.77.
Due to the number of Members taking up my 2 year Euro 2500 for my Platinum Service in recent months, this will be the last month I am offering this special price which will rise to Euro 2750 on October 1 2016. If anyone is still interested in this original deal which has been in situ since January 1 can you please email me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 118 points yesterday and is now ahead by 198 points for September having made 1722 points in August and 1682 points in July. The previous three months saw gains of 2550, 1532 and 2175 points respectively. Since I started this Platinum Service in June 2015 it has averaged a monthly gain of over 2000 points.
Oil prices closed 4% higher yesterday after the biggest weekly inventory drawdown this Century (since January 1999), down a whopping 14.5mb when the market was expecting a 0.9mb run up. Tropical Storm Hermine severely disrupted shipping in the Gulf, imports down 1.95mb/day accounting for the bulk of the inventory draw. Even though most of this looks to have been a short-term supply interruption, US Energy stocks still rose 1.67% in a soft day for US equities.
The ECB left Interest Rates on hold and made no change to its Asset Purchase Programme, all as expected. But at his press conference, President Dragi sounded almost proud of how the loan programme was supporting lending growth and Euro-Zone domestic demand this Quarter, notwithstanding some recent data jitters from choppy confidence and activity(eg the German IFO Survey). Dragi also implored governments to do more to support growth on the fiscal front, saying there is fiscal space for example for Germany to do more, that has so far fallen on deaf ears. The Euro jumped to over 1.1320 but is back trading at 1.1260 this morning.
Governments doing more to support growth from fiscal policy was also one of the takeaways from the interview Glenn Stephens has done with the AFR and on its website yesterday. On the currency he did say that the AUD ”could give us trouble”, a warning that seemed to play some part in taking the AUD/USD down from over 0.77 to 0.7640. Stephens also made the point that it is ”my position in recent times that the AUD has been adjusting as it should”.
Elsewhere yesterday, US Bond Yields rose with the 10 Treasuries rising 6bps. Meanwhile the VIX rose 0.57 while Coal prices rose $6.25 to $166.50, up 3.9% and more than doubling from their lows in late January this year.
On the data front, US Weekly Jobless Claims remained low at 259k, another positive Labour market indicator that keeps the September FOMC Meeting still ”live”.
This morning on the economic front we already had the release of the German Current Account Balance for July which came in at EUR 19.5bln versus 23.7bln expected. At 9.30 am we have the UK Inflation forecast for the next 12 months, Trade Balance and Construction Output. The only US data today is Wholesale Inventories at 3.00 pm.
The EU Finance Ministers have a meeting in Bratislava while the Fed’s Rosengren will deliver an economic forecast at 12.45 pm.
September S&P 500
US stocks continued their two month sideways action yesterday. This is the lowest two month volatility since the 1960’s as the market gets another excuse to go on hold early ahead of the next FOMC Meeting. However volume picked up yesterday to its highest level since August 3 while the McClellan Oscillator slipped back to close barley in positive territory at +1. Despite the fact that the US Markets could not really rally after we saw a decent move higher in European markets off the lows after Dragi’s press conference which was surprising given the weaker US Dollar. Yesterday’s narrow range saw the S&P trade lower to my average 2180 buy level before having a small rally to 2184. As I did not like the way the S&P was trading coupled with the fact that nearly all my call’s got hit yesterday I covered this position at 2181 and I am still flat. The S&P has got to the stage where you are only looking for 4/5 handles on any position given this excessive low volatility. Today my only interest in buying the S&P is on a dip lower to 2163/2168 with a 2158 stop. If I am taken long and subsequently stopped out I will use my ”5 Handle Rule” to go long again with a stop below whatever new low is posted. Given the fact that the S&P is finding it so difficult to get anything going on the upside I will now be a small seller on any rally higher to 2187/2192 with a 2197 stop which is just above its all-time high.
EUR/USD
There is no doubt the Euro is finding it very difficult to break the nine month trend-line at 1.1350 as every time we hit this resistance level we see a lot of selling to drive the Euro lower. However which each test this resistance will become weaker and eventually we will break higher. I am still flat the Euro and today I will now raise my buy level to 1.1210/1.1240 with a 1.1170 stop. I still do not want to be short the Euro at this time.
September Dollar Index
I am still flat the Dollar and today I now lower my sell level to 95.25/95.55 with a 95.85 stop.
September DAX
As I emailed my Platinum Members yesterday by saying now you know why I stay flat over a major announcement such as we had with the ECB Meeting and more importantly the Dragi press conference which following this announcement. The markets did not like the fact that the ECB as yet have not extended their Asset Buying Programme beyond March 2017 and got crushed with the DAX trading over 170 points lower to a 10565 low print. This sell-off enabled me to go long at the bottom of my buy range at 10590. As so many of markets hit at the same time and the fact that I now had to mange my risk I emailed my Platinum Members to exit this position at 10620 and I am now flat. Subsequently the DAX rallied over 10700 which hopefully gave you a better exit point than me. Today my only interest in buying the DAX is on a further move lower to 10520/10570 with a 10480 tight stop. Given the volatility I do not want to be short the DAX at this time.
September FTSE
My FTSE plan also worked well with the market trading lower to my 6820 buy level before rallying over 50 points. Unfortunately I again covered this position too early at 6838 (due to the number of open positions on board at that time) and I am now flat. Today I will again look to buy the market on any further dip lower to 6765/6795 with a 6740 tight stop. I will also look to sell the market on any rally higher to 6880/6910 with a 6935 stop.
Dow Rolling Contract
After the Dow traded lower to my 18445 buy level the market rallied back above 18500 but as the price action was not constructive I covered this position at my revised 18475 T/P level and I am now flat. Today I will again look to buy the Dow on any dip lower to 18310/18370 with a 18260 stop which is just below the 18295 low from last Thursday. Given the weakness in the Dollar I still do not want to be short the Dow at this time.
December BUND
My Bund Plan worked well yesterday with the market trading lower to my 164.80 buy level before having a nice rally to 165.25 which enabled me to cover this position at my revised 164.95 T/P level and I am now flat. Subsequently the Bund got slammed and today I will again try to buy the market from 164.00/164.40 with a 163.80 tight stop.
Gold Rolling Contract
Gold got hit yesterday as yet again the market rejected the now key 1350 resistance level. The market traded lower to my 1336 buy level but as I was already long Silver and the fact that the points that the spread betting firms use for Gold are so expensive I cover this position for a small gain at 1337.50 and I am now flat. Overnight Gold traded higher to 1340 before selling off again Today my only interest in buying Gold is on a dip lower to 1319/1326 with a 1313 stop.
Silver Rolling Contract
No change as I am still long Silver at 19.75 with the same 19.05 stop.
Recent Comments