U.S. Equity Markets closed higher on Friday with outperformance in the NASDAQ, although the Russell 2000 lagged and was the only Index finishing in the red. The majority of sectors were green, with outperformance in Communication Services, Technology, and Real Estate, while Materials, Industrials, and Consumer Staples were the relative laggards. T-notes Bull flattened with eyes turning to US CPI this week while the Dollar Index saw slight pressure but DXY managed to hold above 103.00. The Japanese Yen and Swiss Franc outperformed thanks to lower US Treasury yields while antipodes lagged with Kiwi traders eyeing the RBNZ rate decision this week, with analysts split between a hold or cut. Highlights on Friday saw slightly hotter than expected China inflation data, while Canada Employment was mixed, with the headline missing, the unemployment rate printing beneath expectations, and the full-time employment number surging. Fed’s Collins also spoke, noting that if data continues to come in the way she expects, she believes it will be appropriate to soon adjust policy and ease restrictiveness. She also noted the July jobs report was softer than expected, and it warrants careful attention, but she cautioned against over-emphasising any one or two releases. Meanwhile, Fed Member Schmid said that if inflation continues to come in low, it will be appropriate to adjust policy, adding the current stance of Fed policy is not that restrictive and the Fed is close, but still not quite there on reaching the 2% inflation goal. He noted that financial conditions can impact the real economy, but the Fed must remain focused on its dual mandate. He is more confident that inflation is on the path to target, given recent encouraging inflation data. He noted that price data is volatile and that they should look for the worst in the data rather than the best. He acknowledged there has been a noticeable cooling of the labour market, but overall, it still appears healthy, adding a cooling labour market is a necessary condition for easing inflation. Nonetheless, Schmid noted the story could change if conditions were to weaken considerably and the path of Fed policy will be determined by data and the strength of the economy. He would not want to assume any particular path or endpoint for the policy rate, however. Elsewhere, Oil built on Thursday’s gains end Friday with a gain of 0.76% while Gold was back above $2400 with a gain of 1.2%.
To mark my 3050th issue of TraderNoble Daily Commentary I am offering a special 2-Year Rate of Euro 2750 for my Platinum Service which includes 1 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 95 points on Friday and is now down by 863 points for August after closing July with a gain of 1918 points while June closed with a gain of 2074 points, having made 1843 points in May. The Platinum Service made 4010 points in April after ending March with a gain of 2113 points. February closed with a gain of 1606 points, after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, 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 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 0.47% higher at a price of 5344.
The Dow Jones Industrial Average closed 51 points higher for a 0.13% gain at a price of 39,497.
The NASDAQ 100 closed 0.54% higher at a price of 18,513.
The Stoxx Europe 600 Index closed 0.57% higher.
This Morning, the MSCI Asia Pacific closed 0.5% higher.
This Morning, the Nikkei closed 0.56% higher at a price of 35,025.
Currencies
The Bloomberg Dollar Spot Index closed 0.05% lower.
The Euro closed 0.1% lower at $1.0914.
The British Pound closed 0.4% higher at 1.2746.
The Japanese Yen rose 0.1% closing at $146.63.
Bonds
Germany’s 10-year yield closed 3 basis points lower 2.24%.
Britain’s 10-year yield closed 1 basis points lower at 3.94%.
U.S.10 Year Treasury closed 1 basis points lower at 3.94%.
Commodities
West Texas Intermediate crude closed 0.85% higher at $76.84 a barrel.
Gold closed 1.2% higher at $2430 an ounce.
This morning on the Economic Front we already had the release of German Wholesale Price data which rose 0.3% versus – 0.3% expected. The only other data to be release on either side of the Atlantic is the U.S. Monthly Budget at 7.00 pm.
Cash S&P 500
Former Market expert Richard Russell used to say that it is a bearish sign when a stock Index declines sharply and then claws its way back from the sell-off but is unable to close in positive territory. His theory is that it uses up all the buying power with no gain to show for it. We will see if that axiom applies now as all three of the major U.S. Indexes – the Dow, S&P 500 and NASDAQ – declined sharply from Friday August 2 to last Monday’s close and then spent the rest of the week clawing back the decline. But by Friday’s close, all three Indexes closed the week lower. Friday’s 5360 high was over 200 Handles higher than the early Thursday morning low as the ‘’Open Gap’’ from August 2 was closed. Thankfully we had no sell levels in any of the Indexes over the past two sessions as yet again anyone who shorted the market last week was slammed. The VIX spike that we witnessed out of the blue last Monday, I have not seen in many years. Adding to the complexity of the market is how quickly the VIX reversed these gains closing at a still high 23 on Friday night. These moves are historic and the VIX will probably become the most significant technical signal over the next coming weeks. The S&P has further resistance from 5400/5420. If bulls want to regain control this key resistance area must be broken and then subsequently held as support on any re-test. Given that the original breakdown was from this area it should act as strong resistance initially. Therefore I will be a seller from 5400/5420 with a 5435 ‘’Closing Stop’’. I will now raise my buy level to 5270/5286 with a higher 5255 ‘’Closing Stop’’. Finally, as I go to press, the 2-10 Treasury Yield Curve remains slightly inverted, still.
EUR/USD
No Change. The Euro has traded in a narrow range over the past four trading sessions, and I am still flat. The Euro has strong resistance from 1.1020/1.1090 where I will be a small seller with a 1.1155 ‘’Closing Stop’’. The Euro has support below from 1.0800/1.0870 where I will still be a buyer with the same 1.0745 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 1.0970. If I am taken long, I will have a T/P level at 1.0920.
Dollar Index
I am still flat as the Dollar has hardly moved since Thursday’s Daily Commentary was posted. I am still long at an average rate of 103.30 with the same 102.35 ‘’Closing Stop’’. Meanwhile, I will leave my 103.70 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
No Change: I will stay flat the DAX as I have no interest in initiating a short position at these levels. If this view changes, I will be back with a new update for my Platinum Members.
Cash FTSE
The FTSE was strong on Friday, never coming close to my buy range and I am still flat. This morning the FTSE is trading at a price of 8205. I will now raise my buy level to 8040/8120 with a higher 7975 tight ‘Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
Although the Dow rallied over the past two trading sessions, the move higher is much weaker than what occurred in both the NDX and S&P. The Dow remains short of its August 2 ‘’Open Gap’’ at 39,737. I know all gaps are eventually filled and this level may have to be triggered before the bears have a chance to re-group and try and drive the market lower. The Dow is trading at 39510 as I go to press. We have short-term resistance from 39770/40020 where I will be a small seller with a wider 40205 ‘’Closing Stop’’. Given how extended the Dow is trading I no longer want to be long the market at this time.
Cash NASDAQ 100
Shortly after I posted on Thursday, the NX rallied to my 18070 T/P level on my latest 17975 average long position, and I am now flat. The NDX spent the rest of Thursday/Friday trading sideways/higher as the market tries to build some confidence following the last three weeks’ aggressive sell-off. The NDX has now retraced 54% of the sell-off from August 1. The NDX has resistance from 18800/18950 where I will be a small seller with a wider 19105 ‘’Closing Stop’’. Despite the positive price action over the past two trading sessions, I no longer want to long the NDX at this time. If this view changes, I will be back with a new update for my Platinum Members.
September BUND
I am still flat the Bund. The Bund has support below from 133.00/133.70 where I will continue to be a buyer with the same 132.35 ‘’Closing Stop’’. The Bund has resistance from 135.50/136.20 where I will still be a seller with the same 136.85 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 134.30. If I am taken short, I will have a T/P level at 134.95.
Gold Rolling Contract
Gold closed over $2400 on Friday and I am still flat. I will now raise my buy level to 2382/2398 with a higher 2369 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2410.
Silver Rolling Contract
I am still long Silver at an average rate of 28.10 with the same no stop policy for. I will now have a T/P level on this position at 28.90. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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