A late rally into the close on Friday saw all three American Indexes close positive following a quiet trading session. This morning we are seeing some unwinding of USD/JPY positions leading to some Dollar weakness across the board. This is helping the S&P Futures to rally overnight. Federal Reserve Bank of New York President John Williams said that he believed current monetary policy is in a good place in terms of how restrictive it is. Williams implied that the bulk of its rate hikes is having tangible effects on the economy and bringing high inflation down. However, he would not rule out further rate hikes if more economic data continued to show strength in certain sectors of the economy. In a strong showing of economic resilience, the number of Americans applying for unemployment dropped to the lowest level since February last week. Initial Jobless claims fell by 13,000 and settled at 216,000 for the week ending September 2. And in the week ending August 26, Continuing Claims – which measure how many people are currently receiving benefits – also declined to 1.68 million. Limited layoffs and sustained hiring have fuelled optimism that the U.S can avoid a recession and achieve a soft landing. Despite signs of gradual softening, the labour market remains a steady support of the U.S. economy. Qualcomm (QCOM) is taking a hit to its business because of the mounting tensions between China and the U.S. The company is a key supplier of microchips for Apple, so China’s recent alleged restriction on the iPhone could impact Qualcomm’s future sales. Additionally, U.S. lawmakers are scrutinising suppliers of Chinese tech company Huawei Technologies. Since Qualcomm provides Huawei with older-generation 4G chips, this also could hurt future sales. China, including Hong Kong, represents about two-thirds of Qualcomm’s revenue, meaning it is a crucial market for the company. These challenges have caused significant uncertainty for Qualcomm, and some investors are bailing. The stock fell more than 7%. European Markets closed lower. The Pound Sterling has been under immense pressure lately as expectations build that the Bank of England (“BOE”) may only deliver one more quarter-point interest-rate increase during the current cycle. As a result, the Pound recently hit its lowest level since June and experienced the largest monthly decline among the Group of Ten currencies. Traders are scaling back their bets on how much further BOE rates will rise and are no longer fully pricing in two additional quarter-point hikes. They currently believe that the peak rate will be around 5.70%, which represents their lowest prediction since June. The Pound’s performance is now closely tied to U.K. interest rates, and any further decline in expectations could lead to additional losses. In Asia, the G20 Summit in New Delhi, India, was the spotlight over the weekend due to the absence of Russia and China, opening avenues for new U.S.-India economic and political agreements. President Biden’s landed in India on Saturday with hopes of fortifying bilateral ties and influencing new economic partnerships. However, issues such as trade disputes, human rights concerns, and diverging views on China pose the biggest obstacles to any such agreements. The summit’s outcomes could greatly impact global markets, international relations, and the overall geopolitical scenario. Elsewhere, Oil rose a further 0.74% while Gold closed flat after another boring session.
To mark my 2875th 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 112 points on Friday and is now ahead by 101 points for September, after finishing August with 1485 points gain following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 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 0.14% higher at a price of 4457.
The Dow Jones Industrial Average closed 75 points higher for a 0.22% gain at a price of 34,576.
The NASDAQ 100 closed 0.14% higher at a price of 15,280.
The Stoxx Europe 600 Index closed 0.22% higher.
This morning, the MSCI Asia Pacific closed 0.3% higher.
This morning, the Nikkei closed 0.43% lower at a price of 32,467.
Currencies
The Bloomberg Dollar Spot Index closed 0.20% higher.
The Euro closed 0.1% lower at $1.0698.
The British Pound closed 0.1% lower at 124.63.
The Japanese Yen fell 0.4% closing at $147.78.
Bonds
Germany’s 10-year yield closed 1 basis points higher at 2.61%.
Britain’s 10-year yield closed 2 basis points lower at 4.42%.
U.S.10 Year Treasury closed 1 basis points higher at 4.28%.
Commodities
West Texas Intermediate crude closed 0.74% higher at $88.20 a barrel.
Gold closed 0.1% lower at $1919.10 an ounce.
This morning on the Economic Front we have a speech from Bank of England Member Pill at 9.00 am. The only other relevant data on either side of the Atlantic is the U.S. Three-Year Treasury Auction at 6.00 pm.
Cash S&P 500
Thankfully the S&P has continued to build on Friday’s late rally, trading at 4473 this morning. I am still long at an average rate of 4479. I will leave my 4485 T/P level unchanged while raising my stop to a ‘’Closing Stop’’ at 4459. As expected, we saw the usual VIX Friday crush with the VIX falling 4%, to close with a 13 Handle. The one danger with a low VIX is there is not much protecting in being long the S&P, hence my tight exit level. All eyes will be on the Apple news tomorrow where I would expect volatility to increase. If any of the above levels are hit in the S&P, I will be back with a new update for my Platinum Members.
EUR/USD
The Euro has closed lower for eight consecutive weeks. This is extreme resulting in the Daily Sentiment Index is single digits. History tells that every time the DSI has such a reading it is not long before a rally ensues. I am still flat the Euro as the Market just missed Friday’s buy range. I will now raise my buy level to 1.0640/1.0710 with a higher 1.0585 ‘’Closing Stop’’. I no longer want to be short the Euro at this time.
September Dollar Index
I am still short the Dollar at 104.70. I will continue to look to add to this position at 105.30 with the same 105.85 ‘’Closing Stop’’. I will now raise my T/P level to 104.30. If any of the above levels are hit, I will be back with a new update for my Platinum Members
Cash DAX
No matter what the news the DAX continues to hold in. Yesterday it was Industrial Production coming in much weaker than expected on top of Wednesday’s awful Factory Orders. No matter the DAX continues to find buyers on dips. With European Market so far ignoring the Apple news it gives me confidence that this week’s American sell-off is just a blip. I will now raise my DAX buy level to 15580/15660 with a higher 15495 ‘’Closing Stop’’.
Cash FTSE
The FTSE again outperformed on Friday helped by the falling Pound which I mentioned in my Daily Commentary above. I will now raise my buy level to 7370/7440 with a higher 7315 ‘’Closing Stop’’. I will also raise my sell level to 7550/7620 with a higher 7675 ‘’Closing Stop’’.
Dow Rolling Contract
I am still flat. Ther Dow led Friday’s gains despite trading in a narrow range. Given the recent strength of both the Dollar and Treasury Yields it is impressive how well the Dow has performed. The Dow has strong support from 34100/34350 where I will continue to be a buyer with the same 33995 ‘’Closing Stop’’.
Cash NASDAQ 100
My patience paid off as the NDX rallied to an afternoon high at 15373 enabling me to exit my 15285 long position at 15342 and I am still flat. With the Apple iPhone announcement tomorrow, I would expect the Apple Shares to rally ahead of this news. Last week’s 7% fall in Apple knocked a massive $200bn off their Market value. The NDX has support from 15100/15250 where I will be a buyer with a lower 14995 ‘’Closing Stop’’.
December BUND
The Bund traded in a narrow range on Friday, and I am still flat. Ahead of the three-year Treasury Auction this evening, I will now lower my Bund buy level to 129.60/130.40 with a lower 128.95 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 131.00.
Gold Rolling Contract
No Change. The volatility in Gold over the past few months has been dreadful, making it hard to make points. I am still flat, refusing to chase Gold higher given the large selling on any move above 1960. I will continue to be a buyer from 1895/1910 with the same 1883 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I am still long at an average rate of 24.05 with the same 22.95 ‘’Closing Stop’’. I will now lower my T/P level to 24.40. If any of the above levels are hit, I will be back with a new update for my Platinum Members
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