US stocks finished at new record highs on Friday in thin post-Thanksgiving holiday trade, led by utilities but with energy stocks a drag. US Bond Yields were narrowly mixed and the US Dollar gave back a little of its recent strength. The Australian and New Zealand Dollar’s were the best FX performers, AUD aided by stronger metals prices and coking coal hitting $300 a tonne for the first time. The Canadian Dollar didn’t fare as well with oil prices off almost $2 after Saudi Arabia canceled a meeting with non-OPEC producers due to the lack so far of any agreement on output cuts among OPEC nations themselves.
To mark my 1200th issue of Tradermoble I am offering a special 2 year rate of Euro 2750 for my Platinum Service which includes 1/4 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 92 points on Friday and is now ahead by 1656 points for November having made 1582 points in October. The previous four months saw gains of 1142, 1782, 1682 and 2550 points respectively. Since I started this Platinum Service in June 2015 it has averaged a monthly gain of over 1900 points.
The S&P gained 0.39% to 2213.35. The Index also closed bang on the highs of the day. The Dow was +0.36% and the NASDAQ +0.34%. The VIX lost 0.09 to 12.34 and so -0.51 on the week. The Eurostoxx 50 closed 0.26% higher and the German DAX +0.09%.
US Bond markets saw 2s -0.5bp to 1.12% (+5bps on the week); 5s +0.3bp to 1.836% (+3.8bps on the week) and 10s +0.7bps to 2.358% so retracing all of the APAC session rise and up just 0.2bp on the week. Both 10yr Bunds and gilts lost 1.9bps to 0.24% and 1.417% respectively. The ECB’s Stournaras said it was far too early to discuss QE tapering.
In FX, the US Dollar rally stalled, DXY -0.21% to 101.49 and is just 0.3% higher on the week and the broader BBDXY -0.23% to also be +0.3% on the week. ADXY was +0.29% and -0.2% on the week. NZD/USD was the biggest gainer Friday, +0.59% to 0.7043 followed by AUD/USD +0.47% to 0.7443. In contrast USD/CAD was +0.2% to 135.19 on lower oil. USD/JPY lost 0.1% to 113.22 and after the intra-day high of 113.90 in Asia. Overnight the Yen had a strong rally to a 111.35 low before rallying back above 112. EUR/USD added 0.33% to 1.0589. GBP/USD gained 0.21% to 1.2477. T the South African Rand (ZAR) was stronger on the day (+0.28%) despite Fitch revising its outlook on South Africa to negative (it reaffirmed the BBB rating).
In commodities, oil slumped on the Saudi news, Brent -$1.80 to $47.24 and WTI -$1.90 to $46.06. Oil is still just up on the week (+$0.38/39). Lead and Zinc led the 0.53% rise in the LMEX index, iron ore added $2.7 as is back within touching distance of $80 where it was a week ago ($79.61). Coking coal ended at exactly $300, a new cycle high and up from $297.50 when last traded on Wednesday. Steaming coal out of Newcastle in contrast lost $2.20 to $103.75. Gold was down, another $11 to $1178.40. However overnight both Gold and Silver have rallied strongly.
This morning on the economic front we have Euro-Zone Money Supply (M3) at 9.00 am and this is followed at 10.00 am by OECD Economic Outlook. Finally at 3.30 pm we have the Dallas Fed Manufacturing Activity Index.
December S&P 500
The S&P closed at new all-time highs on Friday in what was a very thin trading session. The McClellan Oscillator regained what it lost on Wednesday closing with a positive 179 reading. There is no doubt the market is overbought after its 180 Handle rally since the 2028 post Trump election victory as one short after another gets squeezed. I am still flat the S&P and today I will leave my buy level unchanged at 2191/2197 with a 2186 stop. If the market continues to rally over the coming days I will look to sell the S&P from 2225/2233 with a 2238 tight stop.
EUR/USD
The Euro unfortunately just missed my 1.0570 buy level on Friday before rallying strongly as expected overnight and I am still flat. All eyes will be on the Italian Referendum next Sunday but as long as the Euro can hold its March 23, 2015 low print at 1.0462 we still have a large negative divergence versus the US Dollar Index which is still trading above its 100.65 low print from the same day. Today I will now move my buy level higher to 1.0570/1.0610 with a 1.0535 stop. Despite the negative price action, I still do not want to be short the Euro unless we take out the key 1.0462 low. If I am stopped out of any long Euro position I will be an aggressive buyer on any dip lower to 1.0435/1.0475 with a 1.0395 stop. Remember the Daily Sentiment Index reading for the Euro is still in single digits, implying a large rally to correct this bearish reading has already started or is due to begin after one more test lower.
December Dollar Index
The aggressive move lower in USD/JPY overnight led to the Dollar hitting my 100.65 buy level before reversing to hit my 100.95 T/P level as outlined to my Platinum Members and I am now flat. Today I will again look to buy the Dollar on any dip lower to 100.20/100.55 with a 99.80 stop. I will also lower my sell level in the Dollar to 101.60/102.00 with a 102.30 stop.
December DAX
The DAX continues to trade in the narrow 230 point range which we have seen over the past three weeks. The stronger Euro should help the DAX to trade lower and today I will lower my buy level slightly to 10500/10555 with a 10455 tight stop. Remember the DAX has to break and close over its key resistance level at 10800/10850 for the market to turn higher. A break and close over 10850 targets 11160. I still do not want to be short the DAX at this time especially with month end on Wednesday.
December FTSE
I am still flat the FTSE which traded in a narrow range on Friday. Today with Sterling stronger I will now lower my buy level to 6710/6750 with a 6680 stop. Just like the DAX above, I do not want to be short the FTSE ahead of month end on Wednesday.
Dow Rolling Contract
On Friday the Dow came close to my sell level before selling off and I am still flat. Today I will again look to sell the Dow on any rally higher to 19190/19250 with a 19310 stop. The Dow is overbought after its near 1700 point rally since its post Trump election low print and is due a correction especially with the McClellan Oscillator close to a +200 print. Given how overbought the Dow is trading I do not want to be long the market at this time as I prefer instead to buy the S&P on dips as shown above.
December BUND
The BUND also missed my 160.95 buy level on Friday before rallying strongly and I am still flat. Today I will now raise my buy level to 160.85/161.20 with a 160.55 tight stop. I still do not want to be short the Bund at this time.
Gold Rolling Contract
My Gold plan worked well on Friday with the market hitting my 1179.50 buy level before rallying to a 1198 high print overnight. Unfortunately as I was already long Silver I emailed my Platinum Members to exit this long position for a small gain at 1182.50 and I am now flat. The single digit DSI reading for Gold shows why it is too dangerous to be short Gold at this time as the market can easily rally back to 1230/1250 over the coming days. Today I will again look to buy Gold on any dip lower to 1178/1185 with a 1169 stop which is just below last week’s low.
Silver Rolling Contract
My long 16.38 Silver position worked well on Friday with the market hitting my 16.70 T/P level over night and I am now flat. The aggressive move lower in Silver over the past few weeks is in my opinion at or near an end. Every time we have a single digit DSI reading for Silver the marker turns around by having an aggressive rally. Today I will look to buy Silver on any dip lower to 16.40/16.80 with a 15.95 stop.
Following the success of the NFP Live Trading Day and Education Session in London on September 2, Paul Wallace and I are bringing this event to Dublin for the December NFP day next Friday December 2nd from 10.00 am to 4.30 pm. We only have a couple of places left and If anyone is interested in attending this event the details are on the following link:
https://www.eventbrite.com/e/live-nfp-trading-day-dublin-tickets-28159689389
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