U.S. Equity Markets saw a strong rally Friday with post-Powell shorts covering into the weekend despite Thursday’s hawkish Fed pricing shift extending. The stock strength was driven by the mega-cap names where the Nasdaq 100 outperformed, with the likes of Microsoft (MSFT) hitting all-time highs, although breadth was still strong with many names enjoying upside. Friday’s move higher came despite Thursday’s Downside Key Day Reversal in both the NASDAQ 100 and S&P. Fed Speakers on Friday was inconsequential for markets, with Daly and Bostic giving familiar rhetoric. Treasuries “twisted” with rising consumer inflation expectations in the University of Michigan survey continuing to unwind rate cut pricing post-Powell while the long-end found some dip buying after Thursday’s auction bloodbath. The Dollar Index was little changed, holding on to Thursday’s rally with moves muted across G10 crosses. Oil prices rallied gradually through the session with shorts covering after a third consecutive W/W loss. Precious metals were sold with the hawkish shift in Fed policy expectations weighing; Palladium continues to tumble after falling beneath USD 1k/oz this week to 5yr lows with the secular shift to EVs adding additional pressure. Agriculture and related stocks were pressured further on the back of Thursday’s USDA report that indicated a record crop harvest. The University of Michigan’s preliminary data for November saw the headline sentiment index pare back to 60.4 from 63.8, against expectations of a little changed 63.7; the expectations component eased from 59.3 to 56.9 (analysts were expected 59.5); the current conditions index eased from 70.6 to 65.7 (exp. 70.6). Within the release, the index of buying conditions for durable goods slumped by the most since November last year, with a record 36% of consumers blaming high borrowing costs or tight credit conditions for poor motor-vehicle purchase conditions. The consumer inflation expectation gauges both ticked up, despite some expectations for a fall with gas prices, with the one-year ahead expectation rising 0.2pts to 4.4%, while the longer-term 5-10yr gauge rose to 3.2% (from 3.0%), to the joint second highest level of the cycle (peak has been 3.3%). Despite the NDX closing at a new three-week high, European Markets closed lower. Elsewhere, Oil closing 1.77% higher which Gold ended Friday with a loss of 0.9%, following a volatile trading session that saw plenty of two-way price action.
To mark my 2900th 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 was made 519 points on Friday and is now ahead by 710 points for November. October ended with a gain of 3184 points, after closing September with a small gain of 228 points, after finishing August with 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 1.56% higher at a price of 4415.
The Dow Jones Industrial Average closed 391 points higher for a 1.91% gain at a price of 34,283.
The NASDAQ 100 closed 2.25% higher at a price of 15,529.
The Stoxx Europe 600 Index closed 1% lower.
Yesterday, the MSCI Asia Pacific closed 0.4% higher.
Yesterday, the Nikkei closed 0.24% lower at a price of 32,568.
Currencies
The Bloomberg Dollar Spot Index closed 0.1% higher.
The Euro closed 0.2% lower at $1.0684.
The British Pound closed 0.5% lower at 122.25.
The Japanese Yen fell 0.3% closing at $151.51.
Bonds
Germany’s 10-year yield closed 11 basis points higher at 2.72%.
Britain’s 10-year yield closed 9 basis points higher at 4.33%.
U.S.10 Year Treasury closed 12 basis points higher at 4.64%.
Commodities
West Texas Intermediate crude closed 1.89% higher at $77.17 a barrel.
Gold closed 0.8% lower at $1936.10 an ounce.
This morning on the Economic Front we have U.K. Unemployment and Average Earnings at 7.00 am. This is followed by a speech from Fed Member Williams at 8.00 am. Next, we have the German and Euro-Zone ZEW Surveys at 10.00 am followed by a speech from Fed Member Jefferson at 10.30 am. At 11.00 am we have the NFIB Business Optimism Index and CPI at 1.30 pm. Finally, we have a speech from Fed Member Goolsbee at 5.45 pm.
Cash S&P 500
Although the S&P closed lower on Thursday after a nasty 60 Handle sell-off following an awful 30-year Treasury Auction, dip buyers stepped in a bought the market aggressively on Friday. This move higher saw the S&P close above its 100 MA at 4404 and 20 MA at 4395. This is impressive price action given Thursday’s aggressive Downside Key Day Reversal. My S&P plan worked well on Thursday as the market hit my 4396-sell level before selling off to my 4381 T/P level. Just before Thursday’s close the 50 Day Moving Average was tested, putting me long at 4344. Unfortunately, I covered this position way too early at 4351 and I am now flat which is frustrating. This morning the S&P is trading at 4406. We have strong support from 4378/4393. I will be a buyer on any dip to this area with a tight 4369 ‘’Closing Stop’’. I no longer want to be short the S&P at this time.
EUR/USD
Despite the stronger U.S. Equity Markets, the Euro is surprisingly weak. Thursday’s move lower has me long at my initial buy level at 1.0660. I will add to this position at 1.0600 with the same 1.0535 ‘’Closing Stop’’. I will now lower my T/P level to 1.0705. If any of the above levels are hit, I will be back with a new update for my Platinum Members. I still do not want to be short the Euro at this time.
September Dollar Index
No Change. I am still flat the Dollar as the market never came close to last week’s buy range. This morning the Dollar is trading at 105.80. We have resistance from 106.50/107.20 where I will be a strong seller with a tight 107.85 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 106.05. I no longer want to be long the Dollar at this time.
Cash DAX
I am still flat the DAX, as the market just missed my buy level on Thursday before rallying 200 points. No matter how bad the economic news is out of Germany, any dip is attracting aggressive buying. The DAX has support from 15100/15180. I will now raise my buy level to this area with a higher 15025 ‘’Closing Stop’’. I still have no interest in being short the DAX at this time.
Cash FTSE
The FTSE sold off hard on Friday morning, hitting my initial 7320 buy level. Subsequently, the FTSE rallied 80 points, enabling me to cover this position at my revised 7354 T/P level and I am now flat. The FTSE has support from 7270/7340. I will be a buyer on any dip to this area with a higher 7215 tight ‘’Closing Stop’’. Despite the negative price action on Friday, I have no interest in being short the FTSE at this time.
Dow Rolling Contract
I am still flat as the Dow missed my initial 34330 sell level late Friday by just 10 points. Subsequently, we fell 80 points into the close and I am still flat. Ahead of CPI this afternoon, I will now raise my Dow sell level to 34450/34700 with a higher 34905 tight ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 34310. I still do not want to be long the Dow at this time.
Cash NASDAQ 100
Wow! Incredible two-way price action on Thursday before a 400-point rally off the 15138 low print made on Friday morning. My NDX plan worked well as the market hit my second sell level at 15380 for a 15300 average short position, before selling off to my revised 15240 revised T/P level. Subsequently, the NDX rallied to my second sell level at 15320 as emailed to my Platinum Members. The awful 30-Year Treasury Auction saw the NDX hit my 15180 T/P level and I am now flat. The NDX is severely overbought having closed higher for 10 of the last 11 trading sessions. The NDX has resistance from 15630/15780 where I will be a small seller with a higher 15905 ‘’Closing Stop’’. The NDX has support from 15270/15420 where I will be a buyer with a 15135 tight ‘’Closing Stop’’.
December BUND
I am still flat the Bund as the market never came close to Thursday’s sell level, trading 130 points lower from where I last marked prices. The Bund has support below from 128.40/129.10 where I will be an aggressive buyer with a 127.75 ‘’Closing Stop’’. I no longer want to be short the Bund at this time.
Gold Rolling Contract
After Gold traded the whole of my buy range for a 1958.50 average long position, Gold rallied to my revised 1965 T/P level as emailed to my Platinum Members and I am now flat. This was a lucky exit given the subsequent $30 drop. Gold has support below from 1910/1925 where I will again be a buyer with a lower 1899 ‘’Closing Stop’’. I still do not want to be short Gold at this time.
Silver Rolling Contract
No Change. I am still long Silver from six weeks ago at 24.05. Silver has traded in a narrow 100-point range with very small daily ranges over the past few weeks. I am extremely bullish of Silver while frustrated that Silver has not followed the price of Gold higher. In a change of strategy, I will have no stop or no T/P level on this position. This morning Silver is trading lower at 22.30. I am encouraged by the fact the despite the 2% fall in Gold since Thursday that Silver continues to trade with a 22 Handle. Silver has strong support below at 21.80. I will now add to my existing position on any move lower to this pivot level. If this price is triggered, I will be back with a new update for my Platinum Members.
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