Following another volatile trading session a weaker Dollar saw U.S. equity markets finished yesterday’s session higher, led by the S&P which closed with a gain of 0.66%. Markets closed higher Thursday as Federal Reserve Chair Jerome Powell reiterated the central bank’s commitment to combatting inflation and the importance of the tightening cycle. Investors await next Tuesday’s August Consumer Price Index (“CPI”) numbers to get a better idea of whether the Federal Reserve will raise rates by 50 or 75 basis points (“bps”) at the policy meeting on September 20 and 21. And U.S. mortgage rates rose to the highest level since 2008. Within the S&P 500, eight of the 11 sectors finished higher. European Markets closed higher. The European Central Bank’s (“ECB”) decision to raise rates by 75 bps met market expectations. The ECB highlighted that a substantial regional slowdown in economic activity will likely extend into 2023’s First Quarter. The Bank of England forecast a 15-month recession from the end of this year, as projections show inflation is likely to remain at record-high levels. And Germany’s Kiel Institute for the World Economy published its fall economic update, which says high energy costs will push the German economy into a recession. In Asia, Masato Kanda of Japan’s Finance Ministry told reporters that it will take the necessary steps to support the Yen if further devaluation continues. Reserve Bank of Australia Governor Philip Lowe said the case for a slower pace of interest-rate increases becomes stronger as cash rates rise. And the Bank Negara Malaysia increased its base rate by 25 bps to 2.50%. Elsewhere, Oil closed 1.04% higher while Gold fell 0.49% despite the Dollar weakening.
To mark my 2625th issue of TraderNoble Daiy 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 810 points yesterday and is now ahead by 2195 points for September, after closing August with a gain of 2228 points, having made 2660 points in July, following a gain of 3371 points in June. The Service made 3651 points in May, after making 762 points in April, following a gain of 5883 points in March. The Platinum Service made an impressive 5324 points in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Equities
The S&P 500 closed 0.66% higher at a price of 4006.
The Dow Jones Industrial Average closed 193 points higher for a 0.61% gain at a price of 31,774.
The NASDAQ 100 closed 0.50% higher at a price of 12,321.
The Stoxx Europe 600 Index closed 1.1% higher.
This morning, the MSCI Asia Pacific Index rose 0.5%.
This morning, the Nikkei closed 0.53% higher at a price of 28,214.
Currencies
The Bloomberg Dollar Spot Index closed 0.5% lower.
The Euro closed 0.4% higher at $1.0042.
The British Pound closed 0.5% higher at 1.1585.
The Japanese Yen rose 0.3% closing at $143.28.
Bonds
Germany’s 10-year yield closed 16 basis points higher at 1.73%.
Britain’s 10-year yield closed 13 basis points higher at 3.16%.
US 10 Year Treasury closed 7 basis points higher at 3.30%.
Commodities
West Texas Intermediate crude closed 1.04% higher at $81.69 a barrel.
Gold closed 0.49% lower at $1708.90 an ounce.
This morning on the Economic Front we already had the release of U.K. CPI which fell 0.2% versus +0.4% expected. This is followed at 10.00 am by Euro-Zone CPI and Industrial Production ahead of a speech from ECB President Lagarde at 10.30 am. Finally, we have U.S. Wholesale Inventories at 3.00 pm and a speech from Fed Member Waller at 5.00 pm.
Cash S&P 500
Yesterday, saw plenty of two-way price action on the absurdity that both Lagarde and Powell were speaking at the same time. Every dip in the S&P got bought which should come as no surprise to us given the way the charts were set up. Yet again the oversold $NYMO and McClellan Oscillator proved to be fabulous technical signals. The MO has improved to close at -149 last night so there is still plenty of room for the S&P to rally from here especially if we can break and close above the 50 Day MA (4125). Lagarde in her press conference said she wants a higher Euro as the weak Euro is making inflation worse. So far, the market is listening to her with the Euro trading at 1.0070 this morning. My S&P plan worked well with the market trading the whole of my buy range for a 3952 average long position before rallying to my 3979 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 3968/3988 with a 3953 ‘’Closing Stop’’. Ahead of the weekend I do not want to be short the S&P. The fact that Asset Managers and Hedge Funds are record short Equity Futures could well propel the S&P a lot higher. As I said yesterday everyone is expecting September to be a down month but the signal charts that I follow were already on the floor making it difficult to be short. Thus, the opportunity is there for a much larger rally.
EUR/USD
Finally, we saw a rally in the Euro that the oversold charts were suggestion as the market rose to my 1.0030 T/P level on my .9990 average long position and I am now flat. Today, I will again be a buyer on any dip lower to .9980/1.0040 with no stop. If triggered, I will have a T/P level at 1.0110.
March Dollar Index
The Dollar continued Wednesday’s reversal falling a further 80 points in the past 24 hours, to sit at 108.60 this morning. Central Banks need a weaker Dollar and it was interesting that both Lagarde and the Bank of Japan Finance Minister Suzuki speaking about strengthening their respective currencies against the Dollar. The Monthly RSI for the Dollar Index is at an unstainable 78.9. This shows how overvalued the Dollar is currently trading as it continues to press a major trendline with no sustained break as yet. The last time the Dollar was this overvalued, at the end of 2016, we quickly saw a 10% decline in the Dollar over the following 12 Months. I am expecting a similar outcome, I just do not know what the catalyst will be. Based on a longer-term outlook, the risk/reward is skewed to the downside. In my view, a key source of prior support has disappeared (strong economic growth) and another is fully discounted and may be on the verge of reversing which of course is a divergence in Central Bank rate hike expectations. I am still short the Dollar at an average rate of 107.50. Given how overbought the Dollar is trading I will have no stop on this position, fully believing that we are close to a reversal in the Greenback. I will now raise my T/P level on my short position to 107.10. I am convinced we will see a reversal in the Dollar and I will add to my existing short position on any further move higher to 110.50. If this price is triggered, I will come back with a new update for my Platinum Members.
Cash DAX
My DAX plan worked well with the market trading the whole of my buy range for a 12835 average long position before rallying this morning to my 12895 revised T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 12730/12810 with a 12675 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 12890.
Cash FTSE
Overnight the FTSE rallied tom my 7280 T/P level on my latest 7230 long position and I am now flat. The FTSE rallied despite Gilt Yields rising a further 13 basis points yesterday, to sit a yield of 3.16%. The FTSE has support from 7180/7240 where I will again be a buyer with a 7125 stop.
Dow Rolling Contract
Yesterday was one of the best trading days for my Platinum Service this year. The Dow traded lower to my 31300 buy level before rallying to my aggressive 31570 T/P level and I am now flat. This morning the Dow is trading higher at 31800. We have support from 31400/31600 where I will again be a buyer with a 32095 stop. The 50-Day MA comes in at 32184. As a result, I will be a small seller from 32100/32300 with a tight 32425 stop. Remember a break and close over 32200 will be extremely bullish.
Cash NASDAQ 100
My NDX plan also worked well. Despite the rise in Bond Yields the NDX after hitting my 12130 buy level rallied to my 12255 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 12050/12250 with a wider 11895 ‘’Closing Stop’’.
December BUND
The Bund got hit hard yesterday. This oversold market just got more oversold with Bund Yields now at 1.75% after rising over 90 basis points in the past three weeks. This move lower saw the whole of my buy range triggered for a now 144.15 average long position. I will leave my tight 142.95 ‘’Closing Stop’’ unchanged while lowering my T/P level to 144.80.
Gold Rolling Contract
No Change. As I am still long Silver, I will not chase the price of Gold higher. This morning, Gold is trading higher at 1724. We have support from 1685/1700 where I will again be a buyer with the same 1669 ‘’Closing Stop’’.
Silver Rolling Contract
Thankfully, Silver had a further 1% rallying yesterday, trading at 18.85 this morning. I am still long from last week at 18.80 with the same 19.25 T/P level. Given how oversold Silver is trading I will continue to hold this position with no stop.
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