U.S. Equity Markets finished the day higher, led by the 2.15% gain in the Dow. This move higher saw the VIX close over 8% lower at a price of 24.23, which is its lowest close since early June. Markets closed higher as a slew of economic data pointed to better-than-anticipated economic activity. The New York Federal Reserve’s Empire State Manufacturing Index, Retail sales for June, and the University of Michigan’s Consumer Sentiment Index for July all exceeded Wall Street’s expectations. At the same time, the University of Michigan’s Consumer Inflation Expectations Index fell to the lowest level in a year. This coincided with a New York Fed report earlier this week showing the same thing. All of these metrics pointed to economic activity that could be faring better than investors’ dire expectations. Within the S&P 500, all 11 sectors finished higher. European Markets close higher. Investors were also in a buoyant mood. Exchanges across the region rallied on speculation that the U.S. Federal Reserve could soon begin to ease up on its aggressive rate-hike policy. Comments from St. Louis Fed President James Bullard on Thursday indicated the central bank’s biggest hawk (meaning he’s inclined to raise rates) was not in favour of an even larger-than-anticipated hike despite unexpectedly high inflation growth. The change would help to rally the Euro and ease regional price pressures. At the same time, political developments in Italy pointed toward stability. Last Thursday, Prime Minister Mario Draghi threatened to resign after a Junior Member of the ruling coalition refused to support legislation to ease inflation for individuals. On Friday, President Sergio Mattarella asked Draghi to remain in office. That would avoid a new election and a potential change of control in Rome. In Asia, weak Second-Quarter Chinese economic growth pointed to the potential for increased stimulus from the Beijing government. Premier Li Keqiang recently said the government will make more policy changes to support employment and growth. He also stated the national government will allow regional governments to raise funds for infrastructure projects via $220 billion in bond sales. Japanese stocks rallied after Prime Minister Fumio Kishida called for the restart of nuclear power plants. With the boycott of Russian energy supplies, the nation needs to find alternative energy sources to power homes and businesses. Investors were hopeful the shift would help to avoid a broader economic slowdown. Elsewhere, Oil closed 1.89% higher while Gold fell 0.26%.
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For anyone following my Platinum Service it made 130 points on Friday and is now ahead by 2297 points for July after closing June with a gain of 3371 points June, while making 3651 points in May, having made 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 1.92% higher at a price of 3863.
The Dow Jones Industrial Average closed 658 points higher for a 2.15% gain at a price of 31,288.
The NASDAQ 100 closed 1.83% higher at a price of 11,983.
The Stoxx Europe 600 Index closed 1.1% higher.
This morning, the MSCI Asia Pacific Index rose 0.9%.
This morning, the Nikkei closed 0.54% higher at a price of 26,788.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% lower.
The Euro closed 0.5% higher at $1.0081.
The British Pound closed 0.6% higher at 1.1875.
The Japanese Yen rose 0.4% closing at $13857.
Bonds
Germany’s 10-year yield closed 2 basis points lower at 1.13%.
Britain’s 10-year yield closed 1 basis points lower at 2.08%.
US 10 Year Treasury closed 2 basis points lower at 2.92%.
Commodities
West Texas Intermediate crude closed 1.89% higher at $97.59 a barrel.
Gold closed 0.26% lower at $1704.10 an ounce.
This morning on the Economic Front we have no data from either the U.K or the Euro-Zone. The only U.S. Data is the NAHB Housing Market Index at 3.00 pm and the Total Net TIC Flows at 9.00 pm.
Cash S&P 500
The Ten Year – Two Year Yield curve inverted last week. This means that the shorter two-year yield is now higher than the longer maturity 10-year yield. That normally occurs when the Fed starts raising short-term Interest Rates to combat rising inflation, which is usually a warning sign of an impending recession. This is one of the main reasons why the S&P bottomed on Thursday at a price of 3722 as the market is now betting that we are close to end of the rate hike cycle given the fact that we are already in or close to a recession. Buying the S&P during a massive correction that we have had this year is always an exercise in self-doubt and conviction testing especially when everyone around you is calling for the end of the world. It looks like Thursday’s low was an epic ‘’Bear Trap’’ as the Dollar reversed from hitting at high at .9948 against the Euro. We are not out of the woods yet as we still have lots of company earnings to be reported over the coming weeks which may produce some scary results judging by the bank results last week. My own view is CEOs will mention weakening demand which in turn should finally weaken the U.S. Dollar. Last week saw the Weekly 150 MA hold for a higher low while Friday’s move higher saw the May lows (3811) again hold which is short-term bullish. Although the S&P did not hit my buy level we have had the right idea of buying dips. The S&P has support from 3855/3870. I will move my buy level higher to this area with a tight 3839 ‘’Closing Stop’’. I still do not want to be short the S&P at this time.
EUR/USD
My latest long 1.0045 Euro position worked well with the market rallying overnight to my 1.0110 T./P level and I am now flat. Today, I will again be a buyer on any dip lower to 1.0010/1.0090 with a wider 99.42 ‘’Closing Stop’’.
March Dollar Index
The Dollar never came close to Friday’s sell level and I am still flat. I will now lower my sell level to 108.20/108.80 with a tight 109.35 stop.
Cash DAX
The DAX surged after Friday’s Daily Commentary was posted, trading 350 points higher at 12960 this morning. I will now raise my buy level to 12730/12810 with a higher 12645 ‘’Closing Stop’’.
Cash FTSE
The FTSE rallied to my 7105 T/P level on my latest 7090 long position and I am still flat. This morning the FTSE has continued Friday’s late rally, trading at 7220 as I go to press. The FTSE has support from 7090/7150 where I will be a small buyer with a tight 7035 ‘’Closing Stop’’.
Dow Rolling Contract
The Dow never came close to my buy level on Friday, rallying 2.15% and apart from the Russell Index, was the strongest Index on Friday. The Dow has now rallied 1300 points off Thursday’s post PPI print low at 30143, as yet again traders getting bearish after a news event are now trapped. The Dow is by far the strongest Index this year, only trading lower by 14% in comparison to the 30% fall in the NASDAQ. The McClellan Oscillator improved to close at +45 on Friday while the ‘’Fear & Greed Index closed slightly higher at 27 which is now a reading of ‘’Fear’’. This is another reason not to press the downside given how oversold stocks are across the board. The Dow has support from 30950/31250 where I be a buyer with a 30795 ‘’Closing Stop’’.
Cash NASDAQ 100
This morning the NDX is trading above its 50-Day Moving Average which comes in at 12050. This could be important as we have not closed above this key resistance level since early April. A break and close over this level over the coming days could well see the NDX have a more sustained rally to its 200-Day MA (14275) over the coming weeks. I am still long from April at 14327. I will not add to this position unless we close above this key 12050 pivot point. I continue to hold my April long position at 14327. I will leave my exit level unchanged at 12900 on this position.
September BUND
My Bund plan worked well as the market hit my 152.90 T/P level on my latest 153.40 short position and I am still flat. This morning the Bund is trading lower at 152.20. We have resistance from 153.00/153.70 where I will again be a seller with the same 154.15 ‘’Closing Stop’’. The Bund has support from 150.90/151.60 where I will be a small buyer with a 150.45 ‘’Closing Stop’’.
Gold Rolling Contract
No Change. My only interest in buying Gold is still on a dip lower 1673/1688 with the same 1659 ‘’Closing Stop’’.
Silver Rolling Contract
Shortly after I posted on Friday, Silver hit my 18.25 buy level. I am still long with the same 19.10 T/P level. I will add to this position at 17.70 while leaving my 16. ‘’Closing Stop’’ unchanged. If any of the above levels are hit I will be back with a new update for my Platinum Members.
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