A Friday flare-up in trade tensions between the U.S. and China sent American equities to the first weekly decline in a month. Treasuries capped a fifth straight gain and the US Dollar rose. The S&P 500 halted a three-day advance on the week’s final day, with losses coming after Chinese trade officials cancelled farm visits and President Donald Trump called the nation a threat. Technology and consumer shares sensitive to U.S. tariffs on Chinese goods paced the decline. Stocks edged higher for most of the week after the Federal Reserve delivered a rate cut and promised to do more if needed. Data on housing and manufacturing topped estimates. Treasuries climbed all week, sending the 10-year yield lower by 17 basis points. The move was unrelated to problems in the short-term funding market that prompted the New York Fed to announce a series of overnight operations for the next three weeks to ensure a vital corner of financial markets work properly. The US Dollar nudged higher in the five days. In other news, Thomas Cook Group Plc collapsed under a pile of debt after talks with creditors failed, forcing the British government to hire charter planes to bring thousands of the 178-year-old U.K. travel provider’s customers back home. The company filed for administration early Monday after eleventh-hour negotiations to raise additional funding failed to result in a deal. The move saw all bookings, flights and holidays with Thomas Cook cancelled, sparking panic online among travellers.
To mark my 1900th 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 made 150 points on Friday and is now ahead by 1061 points for September, having made 2387 points in August, 1153 points in July, 1346 points in June,1722 points in May, 955 points in April and 1027 points in March. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Equities
U.S. equity trading may have been extra volatile Friday because of a quarterly event known as “quadruple witching,” when options and futures on indexes and stocks expire. The moves bring some of the busiest trading days of the year, and volume was above average on the week’s last trading day. After a slew of monetary policy decisions this week, including the Fed’s Interest-Rate Cut Wednesday and pledge to support economic growth, traders are now looking toward negotiations between the U.S. and China. President Donald Trump said Friday he doesn’t want to make a partial trade deal with China and that voters won’t punish him for the ongoing trade war in his 2020 bid for re-election.
The S&P 500 Index fell 0.5%, closing at a price of 2992. This left the Index down by the same amount for the week.
The Dow Jones fell 160 points closing the week at 26,936.
The Stoxx Europe 600 Index advanced 0.3%.
The MSCI Asia Pacific Index climbed 0.4%.
The MSCI Emerging Market Index climbed 0.4%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index rose 0.1%.
The Euro fell 0.2% to $1.1021.
The British Pound decreased 0.4% to $1.2473, after the Irish government damped hopes of an imminent breakthrough in Brexit negotiations.
The Japanese Yen gained 0.4% to 107.55 per dollar.
Bonds
The yield on 10-year Treasuries fell six basis points to 1.72%.
Germany’s 10-year yield fell one basis point to -0.53%.
Britain’s 10-year yield slipped one basis point to 0.63%.
Commodities
Gold rose 1.1% to $1,515.90 an ounce.
West Texas Intermediate crude fell 0.1% to $58.09 a barrel.
This morning on the Economic Front we have German and Euro-Zone Markit Manufacturing PMI at 8.30 am and 9.00 am respectively. This is followed at 11.00 am by the Monthly Report from the German Bundesbank. At 1.30 pm we have the Chicago Fed National Activity Index. Next we have the U.S Markit Manufacturing PMI. Finally and could be significant we have speeches from Fed Member Williams and ECB President Dragi at 3.50 pm and 4.00 pm respectively.
December S&P 500
It took a while but just after 6.00 pm the S&P traded lower to my 2991 buy level before rallying back to my 2998 T/P level and I am now flat. The S&P sold off into the close with the market trading at 2988 in the post-close session before opening higher last night to sit at 3003 as I go to press. Despite the S&P trading only 1% below all-time highs the internals of the market continue to show weakness with the McClellan Oscillator closing barely in positive territory with a +19 print. It is not unusual for the stock markets to stall near previous highs and now that the Quarterly Expiration is out of the way we should see some more two-way trading this week. Today I will again be a buyer on any dip lower to 2983/2993 with a 2975 stop. Despite the overhead resistance I still do not want to be short the S&P at this time.
EUR/USD
After the Euro traded lower to my 1.1005 buy level I emailed my Platinum Members to exit any long position ahead of the weekend at 1.1020 and I am now flat. As long as the Euro does not close below 1.0920 I will continue to be a buyer on dips and today my buy level will be from 1.0930/1.0970 with a 1.0895 stop.
December Dollar Index
I am still flat the Dollar and I will now raise my sell level slightly to 98.35/98.75 with a 99.10 stop.
December DAX
The DAX continues to hover just above 12400 as volatility again evaporates. Hopefully this will change when we hear from ECB President Dragi this afternoon. I will leave my 12250/12320 buy level unchanged with the same 12195 stop.
September FTSE
The collapse of Thomas Cook has so far not affected the Market with the FTSE opening higher helped by the weaker Pound. I am still flat the FTSE and I will now raise my buy level to 7230/7270 with a 7195 stop.
Dow Rolling Contract
My Dow plan worked well with market selling off late in the session to my 26940 buy level before rallying to my revised 27012 T/P level and I am now flat. As long as the Dow can hold its 50 Day Moving Average which comes in at a price of 26620 this morning then the market will continue to be a buy on dips. Today I will again look to buy the Dow on any move lower to 26730/26880 with a 26595 wider stop.
December NASDAQ
The NASDAQ was weak all day Friday and was the first of the main Indexes to hit my buy level at 7880. Subsequently the NASDAQ fell further to my second buy level at 7830. At this stage all three of my US Indexes were in my buy ranges and as I wanted to be flat overnight I covered this now 7855 average long position for a small loss at 7848 and I am still flat. This morning we are trading higher at 7875 but for the bulls to regain control we need to see the market push back above 8000. Today I will be a small seller from 7950/8010 with a 8055 stop. I will also look to buy the market on any dip lower to 7750/7810 with a 7705 stop.
Gold Rolling Contract
The late sell-off in the US Indices on Friday saw Gold rally. This rally in Gold has held over the weekend and could well mean that we have seen at least a temporary low in the precious metals. Today I will raise my buy level to 1487/1497 with a 1479 stop.
Silver Rolling Contract
Unfortunately Silver just missed my 17.65 buy level by a few cents before rallying into the New York close. This morning Silver is opening 3% higher at 18.35 and today I will move my buy level up to 17.70/18.10 with a 17.35 stop.
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