U.S. Indexes plummeted on Friday while havens rallied as US President Trump reignited trade concerns. In response to China’s rare earth export controls, Trump threatened massive tariffs on China, noting that other countermeasures are also under consideration. He also said there is seemingly no need for an in-person meeting with Chinese President Xi, given the escalations. The post on Truth hit global equities hard, with all Indices in the red and sectors also whacked, aside from Consumer Staples. The Dollar was sold on the news as it raises trade uncertainty, while the Japanese Yen and Swiss Franc outperformed. Antipodes were hit the hardest, given the close ties to China. Oil prices were sold in the risk-off trade, adding to the post-Gaza ceasefire downside. Gold prices initially rallied back above USD 4,000/oz, pared, and then rose again in later trade as the downside in equities continued. T-notes rallied across the curve on the haven demand, extending on the bid seen in the European morning (tracked global peers higher). Elsewhere, the University of Michigan data sparked little reaction and was largely in line with expectations. 1-year inflation expectations eased, with the 5-year unchanged. Note, this week’s CPI data has been pushed back to 24th October, while the Fed said Industrial Production will be delayed. Retail Sales are also likely to be delayed. Fed speak today saw Daly echo dovish remarks. Waller said the Fed needs to cut rates, but needs to do so cautiously, noting it will not be aggressive or fast, and will move in 25bp steps. Musalem noted that the goals are in tension but warned that there is limited room for further easing before policy becomes accommodative. The Prelim Oct. UoM Consumer Sentiment headline slipped to 55.0 from 55.1, above the 54.2 forecast. The beat was led by the current conditions index rising to 61.0 from 60.4, despite expectations for a drop to 60.0. The forward-looking expectations eased to 51.2 from 51.7, despite an unchanged consensus. The report notes that “Pocketbook issues like high prices and weakening job prospects remain at the forefront of consumers’ minds. At this time, consumers do not expect meaningful improvement in these factors. Meanwhile, interviews reveal little evidence that the ongoing federal government shutdown has moved consumers’ views of the economy thus far.” Inflation expectations saw the one-year ahead ease to 4.6% from 4.7%, while long-run inflation expectations were steady at 3.7%. It notes that “Inflation expectations for both time horizons are about midway between the readings seen a year ago and the highs seen this year in April and May in the wake of the initial announcements of major tariff changes.” Governor Waller reiterated the view that tariffs are a one-time cost increase, which doesn’t result in persistent inflation. He acknowledges there could be a temporary effect, but he does not think it will be that big. Waller claims there is roughly a 40% pass-through of tariffs to goods. He is not seeing evidence of a wage-price spiral, which undercuts the risk of second-round inflation effects. On rates, Waller kept dovish, saying the Fed needs to cut, but be cautious at the same time. The Fed will not be aggressive or fast and will move in 25 basis points steps. The governor views the labour market as not that strong and is not tight in any way. Separately, Waller described his interview for Fed Chair as “great” but does not know if he is a finalist for the role. Reports had suggested the list is now down to five, Waller, Bowman, Rieder, Warsh and Hassett. Fed Member Musalem noted that Fed goals are in tension with inflation running high and the labour market showing weakness, noting a balanced approach only works if inflation expectations are anchored. He reiterated that short-term expectations are elevated, but long-term expectations are anchored. He expects inflation to fade by the second half of 2026 but warns the labour market could weaken; it looks like it is currently at full employment. Musalem supported the September rate cut as insurance against a weakening labour market, and he is open-minded about future rate cuts as further insurance, believing the Fed should tread with caution. He said policy is between modestly restrictive and neutral, reiterating that there is limited room for further easing before policy gets overly accommodative. He believes the Fed has a good understanding of the economy right now, despite the shutdown. Finally, Fed Member Daly said inflation has come in much less than had been feared, and the labour market is to a point where softening looks like it could be more worrisome if they don’t risk manage. Daly described policy as still modestly restrictive after the September rate cut. She notes that the Fed is also projecting more cuts, as part of the risk management. Elsewhere, Oil was hammered, closing lower by over 4% while Gold closed unchanged following a volatile trading session.
To mark my 3250th 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 1105 points on Friday and is now ahead by 1415 points for October after closing September with a gain of 3774 points after ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 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 2.71% lower at a price of 6552.
The Dow Jones Industrial Average closed 878 points lower for a 1.90% loss at a price of 46,479.
The NASDAQ 100 closed 3.49% lower at a price of 24,221.
The Stoxx Europe 600 Index closed 1.25% lower.
Last Friday, the MSCI Asia Pacific closed 0.5% lower.
Last Friday, the Nikkei closed 1.08% lower at a price of 48,088.
Currencies
The Bloomberg Dollar Spot Index closed 0.69% lower.
The Euro closed 0.32% higher at $1.1619.
The British Pound closed 0.21% lower at $1.3362.
The Japanese Yen rose 0.9% closing at $151.15
Bonds
U.K.’s 10-Year Gilt closed 4 basis points lower at 4.68%.
Germany’s 10-Year Bund Yield closed 4 basis points lower at 2.64%
U.S.10 Year Treasury closed 6 basis points lower at 4.06%.
Commodities
West Texas Intermediate crude closed 4.24% lower at $58.90 a barrel.
Gold closed 0.1% lower at $4019.10 an ounce.
This morning on the Economic Front we have the German Wholesale Price Index at 7.00 am followed by U.S. Wholesale Trades Index at 3.00 pm. Finally, we have a speech from Bank of England Member Mann at 8.10 pm.
Cash S&P 500
The S&P 500 got hammered on Friday, closing lower by 2.7% for its largest daily fall since the April lows. Having hit a high at 6762 on Friday afternoon, the S&P fell over 250 Handles into the close. I have been warning of this type of event for the past few weeks as sentiment has reached insane levels. The market had become overcoiled from a volatility standpoint, as the Index dropped below its 20-day moving average, which can trigger selling from systematic funds—particularly CTAs (Commodity Trading Advisors). For those unfamiliar, CTAs are trend-following or trend-chasing strategies. When the 20-day moving average starts to roll over, these funds typically shift into selling mode, just as they become buyers when the market turns higher. As long as the S&P remains below that 20-day moving average, systematic funds are likely to stay net sellers, which is an important factor to keep in mind. We also saw three-month realised volatility rise from its previously low levels. This matters because when one-month realised volatility climbs above three-month realised volatility, volatility-control funds can also be triggered to sell. These mechanical forces may be contributing to the current wave of market weakness. Before the decline, three-month realised volatility was around 8%—a level previously seen only in January 2020, October 2018, and December 2007. Each of those instances preceded significant volatility spikes and notable market drawdowns. Historically, such extremely low realised volatility tends to be followed by violent market moves. The recent setup appears similar, suggesting we may be at the beginning of another meaningful equity reversal. Back in 2014, we saw a similar setup that ultimately led to a relatively muted outcome, but that was the exception. From a volatility standpoint, we had all the warning signs that the market was overstretched—it was just a matter of when a sharp reset would occur. The remaining question now is how deep that reset will be. The Dispersion Index, which tracks performance differences between stocks, rose sharply on Friday to nearly 39—a very high reading. This indicates that while AI and technology names have continued to outperform, the rest of the market has lagged. For context, the S&P 500 fell 2.7% Friday, while the equal-weighted S&P (RSP) dropped only 2.25%. That spread reflects the elevated dispersion across market sectors. Constituent volatility—the average implied volatility of individual S&P 500 components—also remains high, even though the VIX itself is only moderately elevated. On Friday, the VIX rose to around 21 after sitting near 16.5 earlier in the week for a 32% rise on the day. The gap between the VIX and constituent volatility is historically large, implying that either the VIX needs to rise further or individual stock volatility must decline to normalise the spread. As earnings season approaches, constituent volatility typically falls as earnings uncertainty resolves. Leading into earnings, implied volatility usually rises—this dynamic supports the Implied Volatility Dispersion Trade, where investors go long volatility on individual stocks while shorting index-level volatility. That trade has been a tailwind for equities recently but could come under pressure if broader market volatility persists. Taken together, these indicators suggest that the selloff may still have room to run before volatility metrics normalise. Systematic flows could add to downside pressure if weakness continues into this week. We cannot rule out a deeper decline resembling past volatility-driven corrections, such as late 2018 or early 2022. From a technical perspective, support levels to watch include the 6475 region, followed by 6240, with additional gaps lower at 6000 and 5700. These may act as downside targets if selling continues. Given that the VIX 1-day index spiked to 25.7 on Friday, we may see a short-term volatility reset Monday morning, potentially giving equities a brief boost. However, as long as the S&P 500 remains below its 20-day moving average—currently near 6660–6670—any rallies are likely to face renewed selling from systematic funds. Interestingly over the weekend the research Firm Elliott Wave put out a report stating ‘’that the speed of Friday’s breakdown fits their expectation for a serious shift from bull market to bear. They think we have just seen a top in a Grand-Supercycle advance in the U.S. dating back 237 years’’. Caution: Elliott wave have been calling for a top in the S&P for many years but the last week has seen them becoming more animated that a major sell-off is imminent. TBD. Selling rallies again paid dividends as Wednesday’s 6750 short position saw the market hit my 6728 T/P level shortly after I posted on Thursday. Subsequently I went short the S&P again at 6750 before exiting this position too early at 6735. After this T/P level was triggered I emailed my Platinum Members to stay flat which turned out to be a lucky decision given the subsequent 250 Handle sell-off and we were not caught long. The S&P will have initial support at 6529 which is the 50-Day Moving Average. Therefore, I will be a buyer from 6520/6540 with a 6495 ‘Closing Stop’. As I go to post the S&P is trading 1.73% higher on the back of pulling back his threat of 100% tariffs on China. The S&P will have short-term resistance from 6650/6670 where I will be a small seller with a 6685 ‘Closing Stop’. If any of these views change, I will be back with a new update for my Platinum Members.
EUR/USD
I am still flat as the Euro never came close to Thursday’s sell range. Today I will continue to be a seller from 1.1680/1.1750 with a lower 1.1825 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1610. I still do not want to be long the Euro at this time.
Dollar Index
I am still flat. Today, I will leave my 97.70/98.50 buy level unchanged with the same 96.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 99.20.
Russell 2000
It took a while but finally the Russell sold off to my 2430 T/P level on my latest 2470 short position and I am now flat. Today, I will again be a seller from 2445/2510 with the same 2565 ‘Closing Stop’. If I am taken short, I will have a T/P level at 2395.
FTSE 100
Friday’s late sell-off saw the FTSE hit my revised 9495 T/P level on my latest 9535 short position and I am now flat. Subsequently, the FTSE fell a further 100 points into the New York close. The FTSE has support below from 9250/9320 where I will be a buyer with a 9185 tight ‘Closing Stop’. My only interest in selling the FTSE is from 9470/9550 with a lower 9615 ‘Closing Stop’. If I am taken long, I will have a T/P level at 9380. If I am taken short, I will have a T/P level at 9410.
Dow Rolling Contract
Friday’s 1000-point fall saw the Dow close below its 50 Day Moving Average (45511). Today will be a key session for the Dow because if the Dow cannot recover the 50-Day MA then the likelihood of a major move lower increase. As I go to post the Dow is trading 1.3% higher at a price of 45850. The Dow has support below from 45150/45400 where I will be a small buyer with a 44895 tight ‘Closing Stop’. If I am taken long, I will have a T/P level at 45670. I no longer want to be short the Dow at this time.
Cash NASDAQ 100
Incredible sell-off in the NDX on Friday with market falling 4%. This initial sell-off saw my 24930 T/P level triggered on my latest 25085 average short position and I am now flat. Subsequently, the NDX fell a further 900 points making this one the worst trading sessions in points terms for the NASDAQ 100 in history. The 50-Day Moving Average for the NDX is just below current prices at 23976. I would expect any tag of this level to met by strong buying initially as the NDX has not been below this key MA since last May. Therefore, I will be a strong buyer of the NDX from 23750/23950 with a 23595 tight ‘Closing Stop’. If I am taken long, I will have a T/P level at 24170
December BUND
The Bund never came close to Thursday’s buy range before rallying 80 points on the back of the equity sell-off. I will now raise my Bund buy level to 128.90/129.60 with a higher 128.15 ‘Closing Stop’. If I am taken long, I will have a T/P level at 130.30.
Gold Rolling Contract
My Gold plan worked well on Thursday/Friday. Initially Gold fell $100 hitting my 3974 T/P level on my latest 3992 average short position. Subsequently, as emailed to my Platinum Members, I went short Gold again at 4020 before the market sold off to my 3988 T/P level and I am now flat. This morning Gold is trading back above $4000 at 4023 this morning. Gold is severely overbought. We have short-term resistance from 4045/4065 where I will again be a seller with a 4081 ‘Closing Stop’. If I am taken short, I will have a T/P level at 4018.
Silver Rolling Contract
Silver hit a new all-time high at 51.20 on Friday morning before selling of 200 points into the New York Close. Short-Term Silver is extremely overbought. However, I have no interest in shorting the market. I will not chase the price of Silver higher as I continue to be a buyer on any dip lower to 45.80/46.80 with the same 44.15 ‘Closing Stop’. If I am taken long, I will have a T/P level at 48.30.
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