A week dominated by political drama in Washington ended with the specter of a deepening trade war, sending U.S. stocks to a three-week low and bolstering demand for haven assets. The S&P 500 fell 1.1% in the five days to pare its gain in the Third Quarter to about half a percent. Friday brought the latest drama after a report that the Trump administration is considering sweeping limits to capital-market investments, forcing Wall Street to assess the impact on potentially billions of dollars of assets. Stocks most sensitive to trade and ones linked to China paced the selling. The index bounced from its lows after dipping below a key technical indicator. Stocks were under pressure for most of the week, but the start of an impeachment inquiry of Donald Trump on Tuesday brought the steepest selling, as another major risk was added a market on edge over slowing global growth. The US Dollar advanced and Treasuries rose in the week. In other news, Boris Johnson hoped to use his Conservative Party’s annual convention to launch his campaign to win the next British general election. Instead, he is fighting for his credibility as Prime Minister as he faces allegations of sexual impropriety and plots to oust him. After two months in charge of the U.K. government, Johnson was forced to deny he groped a journalist at a lunch around 20 years ago, and batted away allegations that he had a sexual relationship with a businesswoman and authorised taxpayer-funded sponsorship for her company during his time as London Mayor.
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 252 points on Friday and is now ahead by 1608 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
Heading into the weekend, stocks started stronger before the latest salvo from the Trump administration in its spat with China over trade rattled the market. Trade tensions had shown signs of easing in recent weeks ahead of a Chinese delegation’s visit next month for high-level talks. A U.S. crackdown on capital flows would expose a new pressure point in the economic dispute and cause disruption well beyond the hundreds of billions in tariffs the two sides have levied against each other. The news overshadowed data showing the U.S. economy cooled a bit in August. Tech shares were already under pressure after Micron Technologies lead losses after it cut its profit forecast, citing the U.S.-China trade war.
The S&P 500 Index fell 0.5% closing at 2961.
The Nasdaq 100 lost 1.4%, to close well below its 50 Day Moving Average
The Stoxx Europe 600 Index added 0.5%.
The MSCI Asia Pacific Index declined 0.9%.
The MSCI Emerging Market Index declined 0.8%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index was little changed.
The Euro rose 0.2% to $1.0938.
The British Pound declined 0.2% to $1.2290.
The Japanese Yen weakened 0.1% to 107.96 per dollar.
Bonds
The yield on 10-year Treasuries fell less than one basis point to 1.68%.
Germany’s 10-year yield gained one basis point to -0.57%.
Britain’s 10-year yield dipped one basis point to 0.513%.
Commodities
Gold declined 0.7% to $1,504.40 an ounce.
West Texas Intermediate crude fell 1.2% to $55.69 a barrel.
Elsewhere, Bitcoin slipped for a sixth session, below the $8,000 mark, in its longest losing streak in almost a year.
This morning on the Economic Front we already had the release of German Retail Sales for August which came in as expected with a +0.5% print. At 8.55 am we have German Unemployment and this is followed at 9.30 am by UK GDP, Consumer Credit, Current Account, Total Business Investments and Mortgage Approvals. Next we have Euro-Zone Unemployment at 10.00 am and German CPI at 1.00 pm. Finally we have U.S. Chicago Purchasing Managers’ Index and the Dallas Fed Manufacturing Index at 2.45 pm and 3.30 pm respectively.
December S&P 500
My S&P plan worked well on Friday with the market trading lower to my 2965 buy level before rallying to my 2972 T/P level. Subsequently I emailed my Platinum Members to re-buy the S&P at 2958 which was filled before exiting this position at my 2965 T/P level and I am now flat. The S&P had a wild last hour of trading with the market making a low of 2946 before bouncing into the close and this bounce has continued overnight with the market now trading at 2976 as I go to press. This is the second consecutive session that the S&P has rallied off its 50 Day Moving Average at 2950. The S&P is now trading 15 Handles higher where we closed on Friday leaving a large ‘’Open Gap’’. Today I will again look to buy the market on any dip lower to 2952/2962 with a 2944 stop which is just below last Friday’s low print. As today is the last trading day for the Third Quarter I still do not want to be short the S&P at this time.
EUR/USD
Shortly after I posted on Friday the Euro rallied to my 1.0950 T/P level on my average 1.0933 long position and I am now flat. As I am still short the Dollar, my only interest in buying the Euro is on a further dip lower to 1.0870/1.0910 with a 1.0835 stop.
December Dollar Index
I am still short the Dollar at a price of 98.70 from last week. I will now lower my stop on this position to 99.10 while raising my T/P level on this position to 98.60. If any of the above levels are hit I will be back with a new update for my Platinum Members.
December DAX
The weaker Euro is helping the DAX to outperform the US Indices at this time. I still do not trust this move higher in the DAX but having said that I am also reluctant to go short. Today I will raise my buy level slightly to 12180/12240 with a 12135 stop. Remember a break and close below 12100/12150 is bearish.
December FTSE
No Change as I am still a small buyer on any dip lower to 7270/7320 with the same 7235 stop.
Dow Rolling Contract
While the NASDAQ closed well below its 50 Day Moving Average both the Dow and S&P continue to trade above this key support level. The Dow closed at 26820 which is 240 points above the 50 Day MA. Internally the market is still weak with the McClellan Oscillator weakening slightly on Friday to close at -58. My Dow plan worked well with the market trading lower to my 26780 buy level with a 26776 low print before rallying to my 26850 T/P level and I am still flat. Today I will again look to buy the Dow on any dip lower to 26590/26740 with a 26495 stop.
December NASDAQ
The NASDAQ ended the week well below its 50 Day Moving Average, led by Semiconductors which were the biggest tech losers on Friday due partly to increased trade tensions with China. A report that the White House was considering de-listing Chinese stocks traded in the U.S. took a big toll on those stocks most of which are traded on the NASDAQ. That weakened Internet stocks which pulled the communication sector sharply lower. I am still flat the NASDAQ as I had no buy levels in this market on Friday. The 50 Day Moving Average comes in at 7782 and I will now lower my sell level to 7795/7845 with a 7880 tight stop.
December BUND
I am still flat the Bund which just missed my sell level on Friday before getting hit hard after the market opened this morning to currently trade at 173.90. I will now lower my sell level to 174.25/174.65 with a 174.91 tight stop.
Gold Rolling Contract
The succession of lower highs continues for Gold with the market opening lower at 1490 this morning. I am still flat and I will now lower my buy level to 1467/1477 with a 1459 stop.
Silver Rolling Contract
My Silver plan worked well with the market trading lower to my 17.30 buy level before rallying to my revised 17.55 T/P level and I am now flat. Silver is also opening lower this morning. Silver has strong support from 16.70/17.10 and I will be a buyer in this area with a 16.35 stop.
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