U.S. Indexes sold off on Friday despite better earnings from both Intel and Amazon. However, it did limit the sell-off in the NASDAQ 100, which was the only Index to close higher on Friday. The Dow led the declines closing lower by over 1% for the second consecutive trading session. The increased negativity saw the ‘’Fear & Greed’’ Index again close with a reading of ‘’Extreme Fear’’ with a 24 print. Both Crude and Gold prices surged on Geo-Political tensions as the materialised cease-fire in Gaza never happened. Meanwhile, gross domestic product (“GDP”) grew at an annual pace of 4.9% in the third quarter. This is the fastest the economy has grown in nearly two years and is primarily due to a 4% increase in consumer spending (the largest rise since 2021). If this economic momentum continues through the end of the year, it could stifle inflation progress and complicate the Federal Reserve’s future decisions. However, this outcome seems unlikely since growth is expected to cool in the final quarter as student-loan payments resume and high borrowing costs limit big-ticket items. Meta Platforms (META), the parent company of Facebook and Instagram, suffered its largest drop in share price in nearly a year. The slide came after Meta executives expressed concerns on an earnings call about lower advertising spending hurting revenue in the future. Despite the cautionary outlook, the company’s third-quarter earnings report was mostly positive. Meta reported better-than-expected revenue of $34.2 billion and increased its total number of monthly users by 7%. It also boosted its profit margins to 40% and its earnings per share to $4.30 – both of which were significant increases from the year prior. IBM (IBM) reported stellar third-quarter results after divesting portions of its business and acquiring new assets. The company is now focusing on software and hybrid cloud computing, and that switch has paid off handsomely. IBM saw a 4.6% increase in sales to more than $14.8 billion, which trounced expectations. Additionally, the software unit grew sales by 7.8%, and profit per share of $2.20 beat estimates of $2.12. IBM’s annual outlook remains positive, with expectations for 3% to 5% sales growth and roughly $10.5 billion in free cash flow. Mastercard (MA) is projecting revenue growth in the low double digits to close out the year. This is despite the American consumer being financially resilient and strong overall. The stock fell 5% during midday trading on the news. Despite the negative outlook, the payment processor had a successful third quarter. Purchase volume increased 12% to $1.88 trillion, net income rose to $3.2 billion, and earnings per share hit $4.39 – all surpassing expectations. The company also said it saw a 21% uptick in cross-border volumes, which suggests consumers are continuing to travel despite tightening economic conditions. Ford Motor (F) and the United Auto Workers (“UAW”) union have reached a tentative labour deal to end the ongoing strike at Ford’s factories. This marks the first agreement between the union and one of Detroit’s Big Three car manufacturers – the other two being General Motors (GM) and Stellantis (STLA). The proposed deal, still pending approval from UAW leadership, will include a 25% wage increase over the life of the four-and-a-half-year contract. While the agreement marks a major milestone for both parties and will allow manufacturing to resume, concerns remain about the effect of higher labour costs on electrical-vehicle production. European Markets closed lower. The European Central Bank (“ECB”) paused its rate hikes for the first time in over a year, keeping the deposit rate at 4%. It believes that holding interest rates at the current level will make a “substantial contribution” to lowering inflation to its 2% target. President Christine Lagarde acknowledged that the Euro-Zone’s economy is likely to be weak for the remainder of the year but will strengthen over time as inflation falls. She also shut down talk of rate cuts and left the door wide open for additional increases if the central bank sees fit. According to the Ifo Institute’s business climate index, German business morale saw a slight uptick for the first time in six months. October’s reading inched up to 86.9, coming in higher than September’s reading of 85.8. Sentiment about the current business situation showed modest improvement. Meanwhile, managers who were surveyed expressed marginally less pessimism regarding the upcoming months. However, a recent decline in the composite Purchasing Managers’ Index, along with looming headwinds like geopolitical tensions and the potential fallout from the ECB’s next rate decision, suggest Germany may face a challenging economic environment ahead. Elsewhere Oil reversed Thursday’s fall, closing higher by 2.89%, while Gold continued its recent flight to safety, closing over $2,000 with a 2.1% gain.
To mark my 2875th 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 465 points on Friday and is now ahead by 3045 points for October after closing September with a small gain of 228 points, after finishing August with 1485 points gain 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 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and 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 0.48% lower at a price of 4117.
The Dow Jones Industrial Average closed 366 points lower for a 1.12% loss at a price of 32,417.
The NASDAQ 100 closed 0.50% higher at a price of 14,180.
The Stoxx Europe 600 Index closed 0.84% lower.
Last Friday, the MSCI Asia Pacific closed 0.5% higher.
Last Friday, the Nikkei closed 1.27% higher at a price of 30,991.
Currencies
The Bloomberg Dollar Spot Index closed 0.20% lower.
The Euro closed 0.1% lower at $1.0564.
The British Pound closed 0.1% higher at 121.23.
The Japanese Yen rose 0.3% closing at $149.63.
Bonds
Germany’s 10-year yield closed 8 basis points lower at 2.82%.
Britain’s 10-year yield closed 7 basis points lower at 4.54%.
U.S.10 Year Treasury closed 10 basis points lower at 4.85%.
Commodities
West Texas Intermediate crude closed 2.89% higher at $85.54 a barrel.
Gold closed 2.1% higher at $2007.10 an ounce.
This morning on the Economic Front we have German GDP at 7.00 am, followed by U.K. Mortgage Approvals and Money Supply at 9.30 am. Next, we have Euro-Zone Economic Sentiment Indicator at 10.00 am. This is followed by German CPI at 1.00 pm. Finally, we have the Dallas Fed Manufacturing Business at 2.30 pm. Remember the American clocks do not change until next weekend. This means U.S. Markets will open an hour earlier and therefore close earlier at 8.00 pm London time for this week only.
Cash S&P 500
There is little doubt that the extent of the recent down move over the past two weeks was not what I envisaged. Although my Platinum Service caught most of the bounces, the sell-off on Thursday and Friday hurt even though I am still stubbornly long both the S&P and NASDAQ 100. There is little doubt that the Israel/Hamas war, an unexpected geo-political event, has exacerbated the downside given the sell-off witnessed in the S&P over the past three Fridays’. Last week saw no rally of note and the trend has been down which I have been fighting which is never pleasant when technical signals take a back seat to larger events. All signals have become ever more extreme and have so far not mattered at this stage. However, they will matter, the question is when and from what price. The S&P is now in a very deep and descending wedge with an unprecedented 8 ‘’Open Gaps’’ with similar positive divergences to the ones we saw last October, that ended up producing a 20% gain in the S&P. The 14-Day RSI closed at 28 on Friday. While the $BPSPX fell a massive 9% on Friday, helping the RSI to an extreme oversold reading of 21. Both the Monthly 20 Moving Average and Monthly 40 Moving Average have converged which looks to me like a one-off event having studied the S&P Chart over the weekend. This means that the next major support is between 4110 and 4085. On top of this it looks like the S&P is going to close down for three consecutive months which is again a rare scenario. There are times we as investors get challenged in the Market. The last six months have been incredibly challenging which can be normal and not pleasant, but this happens to be one of these times. With Bond Yields and the Dollar falling last week these are two of developments that we need to get a bottom. The final one is at least a temporary ceasefire with Israel. I am still long the S&P at an average rate of 4180 having bought the market at 4217 and again at 4142. As we are having a decent month I have decided to hang onto this position with no stop for now. I will continue with my 4205 T/P level. If this view changes, I will be back with a new update for my Platinum Members.
EUR/USD
The Euro hit my second buy level at 1.0535 for a now 1.0570 average long position. I am still long with the same 1.0485 ‘’Closing Stop’’. I will now lower my T/P level to 1.0640. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September Dollar Index
No Change. I am still short the Dollar at 106.25 with the same 105.70 T/P level. I will continue to look to add to this position at 106.95 with the same 107.35 ‘’Closing Stop’’. 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 traded lower on Thursday to my 14670 buy level before rallying to my 14780 T/P level and I am now flat. This morning, the DAX is trading lower at 14645. We have support from 14350/14450 where I will be an aggressive buyer with a lower 14235 ‘’Closing Stop’’.
Cash FTSE
The FTSE traded the whole of my buy range for a now 7300 average long position. Just like the American Indexes, the FTSE is oversold. I will leave my 7215 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 7330. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
I was fortunate with my Dow calls on Thursday. Initially I bought the market at 32870 before the market rallied to my 33050 T/P level. Subsequently, I emailed my Platinum Members to buy the Dow again at 32740 before rallying to my 32850 T/P level and I am still flat. This morning the Dow is trading lower at 32470. We have support from 32000/32250 where I will again be a buyer with a lower 31895 ‘’Closing Stop’’.
Cash NASDAQ 100
Since I posted early Thursday morning, the NDX got hammered before stabilising a small bit on Friday. On Thursday. I emailed my Platinum Members to stay long at 14645. Subsequently, I added to this position at 14170 for a now 14410 large, average long position. I will continue to have no stop or T/P level on this position as I want to give the NDX to room to hopefully rally. It was interesting that despite the carnage in both the S&P and Dow on Friday, that the NDX closed higher on the day by 0.50%. As I go press the NDX is trading higher at 14250. If this view changes I will be back with a new update for my Platinum Members.
December BUND
My long 128.05 Bund position worked well as the market rallied to my 128.70 T/P level and I am now flat. The Bund has support below from 127.50/128.30 where I will again be a buyer with a 126.85 higher ‘’Closing Stop’’.
Gold Rolling Contract
Gold continues to attract strong buying, closing over $2,000 on Friday. I am still flat and surprised that Silver has not been stronger. Gold has short-term support from 1950/1965 where I will be a small buyer with a 1939 tight ‘’Closing Stop’’. Even though Gold is severely overbought, I still do not want to be short the market.
Silver Rolling Contract
No Change. I am still long Silver from six weeks ago at 24.05. In a change of strategy, I will have no stop or no T/P level on this position. This morning Silver is trading higher at 23.35. If this view changes, I will be back with a new update for my Platinum Members.
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