U.S. Equity Markets ultimately finished Friday mixed with the S&P, Dow and Russell 2000 giving up their strong start to the day while the NASDAQ outperformed, albeit still closed off highs. The NDX was buoyed by the tech sector with semis performing well after a strong Western Digital (WDC) report Thursday evening. The big 3 sectors (Tech, Communication and Consumer Discretionary) were the only sectors that saw notable gains, with energy flat and the rest in the red – showing that any strength in the market was being held up by the heavyweights. The open was strong but stocks largely failed to hold onto their gains with little fresh news driving the price action, but it appeared to coincide with Dollar strength and upside in US Treasury Yields as participants continue to position for the “Trump Trade”, while oil prices also soared. There are also plenty of key risk events coming up, this week sees a plethora of US data (NFP, PCE, GDP) as well as mega cap tech earnings. Geopolitical risk continues to linger as participants await Israel’s response to Iran, which is expected before the US election. Energy prices rallied with the latest updates being reports that Israel is fully prepared in its response, while Iran announced it would react to the Israeli response, unless it was a limited attack. The scope of the attack is still unclear. The mixed Durable Goods and Strong University of Michigan Survey caused little reaction, while the Dollar outperformed in FX, Antipodes lagged while the Japanese Yen saw mild weakness with attention turning to the LDP election over the weekend and the Bank of Japan next week, alongside the aforementioned key US updates. Overall, Durable Goods were mixed. The headline fell by 0.8%, matching the prior month’s pace of decline, albeit it was not as steep as the expected 1.0% decline. Ex-transport, however, saw a 0.4% rise, beating the expected -0.1% print while the prior was revised up to 0.6% from 0.5%, showing that a lot of the downside was led by the transport sector. Ex-defense however fell by 1.1%, with the prior seeing a notable revision to -1.3% from -0.2%. Oxford Economics points out that core orders, which are a clearer indication of future capital spending by companies, rose at a solid pace. Oxford Economics adds that business equipment investment is set to post another solid quarter of growth, contributing 0.5ppt to GDP growth, but it is unlikely to repeat itself in Q4. OxEco adds unsustainable growth in aircraft investment had powered overall equipment outlays in the past two quarters, and this will begin to unwind in Q4. Final University of Michigan Sentiment for October was revised higher to 70.5 from 68.9, above the expected 69.0, with Expectations and Conditions also revised upwards to 74.1 (prev. 72.9) and 64.9 (prev. 62.7), respectively. In terms of inflation expectations, 1yr declined to 2.7% from 2.9%, and 5yr was left unchanged at 3.0%. The report notes that this month’s increase was primarily due to modest improvements in buying conditions for durables, in part due to easing interest rates. On the election, the report adds that it looms large over consumer expectations and overall, the share of consumers expecting a Harris presidency fell from 63% last month to 57%. Sentiment of Republicans, who believe that a Trump presidency would be better for the economy, rose 8% on growing confidence that their preferred candidate would be the next president. Elsewhere Oil closed 2.27% higher while Gold was strong, ending Friday with a gain of 0.5%.
To mark my 3075th issue of TraderNoble Daily Commentary I am offering a special 2-Year rate of Euro 2750 for my Platinum Service which includes 1 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 556 points of Friday and is now ahead by 1996 points for October after ending September with a gain of 4402 points following a 301-point loss for August after closing July with a gain of 1918 points while June closed with a gain of 2074 points, having made 1843 points in May. The Platinum Service made 4010 points in April after ending March with a gain of 2113 points. February closed with a gain of 1606 points, after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 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 0.03% lower at a price of 5808.
The Dow Jones Industrial Average closed 259 points lower for a 0.61% loss at a price of 42,114.
The NASDAQ 100 closed 0.59% higher at a price of 20,352.
The Stoxx Europe 600 Index closed 0.04% lower.
Last Friday, the MSCI Asia Pacific closed 0.6% higher.
Last Friday, the Nikkei closed 0.60% lower at a price of 37,913.
Currencies
The Bloomberg Dollar Spot Index closed 0.18% higher.
The Euro closed 0.1% higher at $1.0796.
The British Pound closed 0.2% higher at 1.2956.
The Japanese Yen rose 0.2% closing at $152.16.
Bonds
Germany’s 10-year yield closed 1 basis points lower 2.30%.
Britain’s 10-year yield closed 3 basis points higher at 4.24%.
U.S.10 Year Treasury closed 1 basis points lower at 4.24%.
Commodities
West Texas Intermediate crude closed 2.27% higher at $71.78 a barrel.
Gold closed 0.5% higher at $2747 an ounce.
This morning on the Economic Front we have no data of note from either the Euro-Zone or the U.K. The only U.S. data is the Dallas Fed Manufacturing Index which will be released at 3.30 pm.
Cash S&P 500
My ‘’Nothing Matters’’ theme shows no sign of ending anytime soon. Wednesday’s 5763 low resulted in a 100-Handles rally to Friday’s 5863 intra-day high before some reality set in sending the S&P 60 Handles lower in its Chicago close. This move higher saw my 5855-sell level triggered before trading lower to my revised 5843 T/P level and I am now flat. It looks more and more likely that Trumnp will win next week’s Presidential Election, and this has been reflected in Equity Markets trading close to all-time highs. The McClellan Oscillator closed at -165 on Friday. Coupled with the $NYSI been close to maximum oversold I find it very hard to make a case for been short the S&P despite the insane valuations. I still believe that we will not get through the next two weeks unscathed. However, whatever post-election sell-off occurs we have the next FOMC Meeting scheduled for the day after the election on November 6 – you just cannot make this stuff up – meaning buyers will again buy any dip awaiting the next miracle from Fed Powell and the Fed Members. The S&P has strong support from 5762/5778 where I will be a strong buyer with a 5749 tight ‘’Closing Stop’’. My only interest in selling the S&P is on a further rally higher to 5873/5889 with a wider 5911 ‘’Closing Stop’’. If these views change, I will be back with a new update form my Platinum Members.
EUR/USD
The Euro made a rebound high at 1.0840 on Thursday before having a small sell-off into Friday’s New York close. I am still long from last week at an average rate of 1.0830 with a now lower 1.0875 T/P level. There is no doubt that the Euro is severely oversold and due at least a bounce to offset its oversold condition. I will leave my 1.0745 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
No Change: I am still short the Dollar from last week at a price of 103.95 with the same 103.50 T/P level. I will add to this position on any further move higher to 104.75 while leaving my 105.25 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
My DAX plan worked well as the market rallied early Thursday morning to my 19540-sell level before trading lower to my 19470 T/P level and I am now flat. The DAX continues to make lower highs meaning the trend has changed short-term from a buyer of dips to a seller on rallies. This morning, the DAX is trading higher at 19500. We have short-term resistance from 19610/19710 where I will again be a seller with a higher 19805 tight ‘’Closing Stop’’. I still do not want to be long the DAX at this time.
Cash FTSE
Unfortunately, the FTSE missed Thursday’s sell range by 10 points before falling 100 points off this intra-day high and I am still flat. I will now lower my sell level to 8330/8400 with a now lower 8465 tight ‘’Closing Stop’’. I still do not want to be long the FTSE at this time. If I am taken short, I will have a T/P level at 8290.
Dow Rolling Contract
The Dow fell 3% last week which is a big move for this Index in the context of the rally over the preceding six weeks. This initial move lower saw my 42210-buy level triggered before the market rallied to my revised 42351 T/P level as emailed to my Platinum Members and I am now flat. The Dow hit an afternoon high at 42594 on Friday before selling off 500 points for a strong reversal. Whether this is significant has still to be determined as any reversal over the past two years has been met by aggressive buying. The Dow has short-term support from 41600/41850 where I will again be a buyer with a lower 41395 ‘’Closing Stop’’. Ahead of next week’s Presidential Election I no longer want to be short the Dow at this time.
Cash NASDAQ 100
My NDX plan worked well as the market rallied to my 20500-sell level before trading lower to my 20335 T/P level and I am now flat. Equity Markets on Friday were highly divergent. The NASDAQ pushed by Intel, Super Micro Computer and Tesla surged at the open. This move higher saw the NASDAQ Composite make a new all-time intra-day high but not a closing high. The NDX did not confirm the Composite’s new intra-day extreme before having a small sell-off into the Chicago close. The NDX has resistance from 20630/20790 where I will again be a seller with a higher 20905 ‘’Closing Stop’’. My only interest in buying the NDX is still on a large move lower to 19780/19940 with the same 17655 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 20505. If I am taken long, I will have a T/P level at 20030. If these views change, I will be back with a new update for my Platinum Members.
December BUND
My latest 132.70 long Bund position worked well as the market rallied to my 133.20 T/P level and I am now flat. Today, I will again be a buyer of the Bund on any dip lower to 131.80/132.60 with a lower 130.95 ‘’Closing Stop’’. Despite the yield on the Bund being so low I have no interest in shorting the market at this time.
Gold Rolling Contract
No Change: I am still flat Gold as I refuse to chase the market higher waiting patiently for a long overdue correction. Gold has support from 2650/2676 where I will continue to be a buyer with the same 2639 tight ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2693.
Silver Rolling Contract
I am still long Silver from last week at a price of 33.90 with the same 34.60 T/P level. I will continue to look to add to this position at 33.00 while leaving my 31.55 ‘’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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