Catalan separatist leaders signalled they may be moving toward a unilateral declaration of independence as early as this week after hundreds of activists were injured yesterday as they sought to stop Spanish police from shutting down an illegal referendum. Catalan President Carles Puigdemont appealed to the European Union for support as he pledged to inform the regional parliament of the result of the vote in the coming days. The assembly will then act in line with the referendum law, Puigdemont said and that could lead to a unilateral declaration of independence within 48 hours of the notification. The Euro fell to 1.1760 in early trading this morning.
To mark my 1425th 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. This offer is open to both new and existing members and if anyone is interested can you please contact me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 65 points on Friday, to close September with a 447 point gain, having made 1560 points in August, 1096 in July, 1023 in June, 1076 in May, 1375 in April, 1335 in March, 1481 in February and 1734 in January. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points.
Spanish Prime Minister Mariano Rajoy is wrestling with his country’s biggest constitutional crisis since Franco’s death in 1975 as Puigdemont looks to harness decades of frustration to force Catalonia out of Spain. Heading a minority government, Rajoy is fighting to maintain his authority as allies peel off the national parliament and his officials struggle to enforce the law of the rebel region. While a declaration of independence would have no legal force, and would likely not be recognised by the international community, it would nevertheless constitute a historic challenge to the authority of the Spanish government and state institutions.
In other news, on what turned out to be a very quiet trading session on Friday, the US Indices again closed at new all-time highs with the Dow closing up for the eighth consecutive Quarter while the S&P made its 39th new high for 2017. Worryingly for the bears is that the S&P 500 has risen seven times since 2009 in the final three months. Matching the average return of the eight years could see the S&P Index hit 2676 by December as the melt-up in the S&P that I have spoken and written about extensively over the past 10 days starts to materialise.
On Saturday China’s Central Bank unveiled its latest Targeted Lending Plan to aid growth by saying it will reduce the amount of cash that lenders must hold as reserves from next year, with the size of the cut linked to the flow of funding to parts of the economy where credit is scarce.
The targeted measures apply to all major banks, 90 percent of city commercial banks, and 95 percent of rural commercial lenders, the People’s Bank of China said in a statement late Saturday. Cuts will range from 0.5% to 1.5% depending on how much business banks do with small enterprises, agricultural borrowers and startups. Foreign banks will also be eligible for the cut should they meet the requirements.
This morning on the Economic Front we have German, Euro-Zone and UK Manufacturing PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed at 10.00 am by Euro-Zone Unemployment and at 2.45 pm by US Manufacturing PMI. Finally we have ISM Manufacturing and Construction Spending at 3.00 pm
In contrast to last week’s heavy Central Bank speakers, the only speaker today is the Fed’s Kaplan at 7.00 pm in El Paso.
December S&P 500
My S&P plan worked well with the S&P trading higher to my revised 2523 sell level on the re-open of the Futures Market last night with a 2523.50 new all-time high before the market traded lower to my 2519 T/P level and I am now flat. As I mentioned last week the 2520/2530 is huge resistance and if the S&P does not break the now massive support from 2390/2440 over the coming three weeks then there is a strong possibility of a major melt-up to the S&P third Standard Deviation at 2792 over the coming months. Today I will again look to sell the S&P on any move higher to 2524/2531 with a 2536 stop. The S&P has strong support from 2501/2507 and I will be a buyer on any dip to this area with a 2496 stop.
EUR/USD
I am still flat the Euro which is selling of this morning on the worsening political situation in Spain. The Euro has strong support from 1.1680/1.1720 and today I will continue to look to buy the Euro in this area with a 1.1640 stop. Remember a break and close below 1.1660 is bearish opening up the possibility of any initial move lower to 1.1565 which is the 100 Day Moving Average ahead of the next main support at 1.1200/1.1400.
December Dollar Index
Unfortunately the Dollar just missed my 92.70 buy level with a 92.79 low print on Friday afternoon and I am still flat. I am reluctant to chase this market higher and today I will only raise my buy level to 92.70/93.00 with a 92.40 stop.
December DAX
Late on Friday the DAX traded higher to my 12820 sell level. In hindsight I should have cut this position after my sell level was triggered but I did not as the DAX traded higher to my second sell level this morning at 12880. I am now short at an average rate of 12850 and I will use any sell-off to this area to cut this position for a breakeven. If I manage to exit this trade near my average sell level I will again look to sell the DAX on any subsequent rally higher to 12895/12945 with a 12980 stop. Given how overbought the DAX is trading I still do not want to be long the market at this time.
December FTSE
The renewed weakness in sterling saw a spike higher in the FTSE shortly after I posted on Friday. I am still flat and today I will now raise my buy level slightly to 7265/7295 with a 7235 stop. The FTSE has strong resistance at its 100 Day Moving Average which comes in at 7380 ahead of a four month trendline at 7415. However despite the strong resistance at these two points I still do not want to be short the FTSE at this time.
Dow Rolling Contract
Despite the US Indices closing at new all-time highs the McClellan Oscillator only improved marginally to finish on Friday with a +83 print which was only nine points higher than Thursday’s +74 print. The FANG stocks continue to underperform with Google (Alphabet) making its high back on June 6, Netflix made a high on July 21, Amazon on July 27 and Apple made its high on September 1. This continues to be a central bank controlled fractured market making it extremely difficult to be short the markets for any length of time. Last night the Dow traded higher to my second sell level at 22450 before having a small sell-off and I covered this second short position at 22425. I am still short in tiny size from a few weeks ago at 22030 and today I will again look to add to this position on any move higher to 22480/22530 with a 22580 stop. Again if and when the Dow does have a more meaningful correction I will be an aggressive buyer from 21850/21930 with a 21780 stop.
December BUND
Unfortunately the BUND juts missed my 161.40 sell level with a 161.31 high print before selling off as expected and I am still flat. My only interest in buying the Bund is still on a dip lower to 159.45/159.85 with a 159.15 stop. I will now lower my sell level slightly to 161.30/161.70 with a 162.05 stop.
Gold Rolling Contract
As I am now long Silver for a second time I will now lower my buy level for Gold to 1258/1265 with a 1252 stop.
Silver Rolling Contract
Finally overnight Silver traded lower to my second buy level at 16.60 which now has me long at an average rate of 16.80. I will leave my stop unchanged at 16.35 while I will now lower my T/P level to 16.90.
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