The S&P closed at yet another all-time higher after the White House announced a deal with Abbott Laboratories (ABT) to purchase 150 million rapid-result COVID-19 tests to help contain the spread of the virus. The S&P has had only one down day so far in August. This against a back – ground where Personal Consumption Expenditures (“PCE”) rose in July from the month before and beat estimates, but growth in spending slowed. Philadelphia Federal Reserve President Patrick Harker said the central bank could let inflation run as high as 3% to reach an average target of 2%. This indicates more easy-money policies in order to spur growth. Final August Consumer Sentiment rose from the prior reading, as consumers became more optimistic on the short-term economy. There were no updates on stimulus negotiations, and talks have no timetable to start back up. In contrast European Indices again closed in the red despite Euro Zone Economic Sentiment coming in better than expected in August, signalling economic recovery optimism is growing. However, German Chancellor Angela Merkel said the Coronavirus was likely to worsen in the coming months, adding the government will continue to support the economy and protect jobs. French Prime Minister Jean Castex said the country will do everything it can to avoid another devastating economic shutdown like it experienced earlier this year, after reporting over 7000 cases on Friday, the highest number since April. Elsewhere, Gold closed 2% higher as the Federal Reserve signalled that it would let inflation run above 2%, weakening the dollar. Treasuries rose six basis points, reversing most of Thursday’s decline.
To mark my 2125th 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 lost 193 points last Friday and is now ahead by 2188 points for August having ended July with a gain of 3128 points, 2580 points in June, 2456 points in May, 4773 points in April, an incredible 9264 points in March, 2223 points in February and 2142 points in January. 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
The S&P 500 closed 0.67% higher at a price of 3508, another new all-time high.
The Dow Jones Industrial Average rose 161 points for a 0.57% gain to close at 28,653.
The NASDAQ 100 rose 0.58%, closing at a price of 11,995.
The Stoxx Europe 600 Index fell 0.6%.
The MSCI Asia Pacific Index rose 0.2%.
This morning the Nikkei closed 1.12% higher at 23,139.
Currencies
The Bloomberg Dollar Spot Index again closed 0.4% lower.
The Euro closed 0.6% higher at $1.1904.
The British Pound closed 1% higher at $1.3350.
The Japanese Yen closed 1% higher at 105.37 per dollar.
Bonds
The yield on 10-year Treasuries closed six basis points lower at 0.72%.
Germany’s 10-year yield closed two basis points lower at -0.41%.
Britain’s 10-year yield also closed two basis points lower at 0.31%.
Commodities
The Bloomberg Commodity Index fell 0.2%.
West Texas Intermediate closed unchanged at $42.75 a barrel.
Gold closed 2.0% higher at lower at $1,961.10 an ounce.
This morning on the Economic Front we have German CPI at 1.00 pm. The UK is closed today. This afternoon we have a speech from the Fed’s Clarida at 2.00 pm and the Dallas Fed Manufacturing Business Index at 3.30 pm.
September S&P 500
At one stage on Friday, the VIX was trading over 7% higher before reversing to close 6% lower at 22.96. This price action was reflected in the S&P which reversed an earlier loss to close at yet another new all-time high. If the S&P closes higher today, it will mean that the month of August has seen the market close higher in 21 of the 22 trading days, with the only down-day coming way back on the 11th. This is unprecedented and while the S&P may trade higher this market has so many negative divergences that we can roll-over at any stage. There are no bears left as every short has been squeezed sine the market started to rally off its March 2170 low print. Overnight the S&P gapped higher to hit my sell range and I am now short at a price of 3517. I will add to this trade at 3531 with a now higher 3541 stop. I will raise my T/P level to 3502 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
EUR/USD
The Euro just missed my initial 1.1930 sell level with an overnight high at 1.1929 before selling off to sit at 1.1897 this morning. The Euro has strong support from 1.1810/1.1850. I will now raise my buy level to this area with a higher 1.1765 stop. I will also raise my sell level to 1.1960/1.2010 with a higher 1.2045 tight stop.
September Dollar Index
My Dollar plan worked well with the market trading lower to my 92.20 buy level before rallying to my revised 92.50 T/P level and I am now flat. The Dollar is oversold and has support from 91.50/91.90 where I will again look to buy with a 91.05 stop.
September DAX
Shortly after I posted the DAX sold off to a morning low at 12941. This move lower put me long at 12970 before we rallied to my too tight 13002 revised T/P level and I am still flat. I do not like the price action in the DAX especially with the Euro so strong. The DAX has resistance from 13150/13250 where I will be a seller with a 13325 stop.
September FTSE
The UK Markets are closed today for the August Bank Holiday. I am still flat the market and I will stay flat until the Cash Markets re-open tomorrow.
Dow Rolling Contract
At close of business this evening, Salesforce.com, Amgen and Honeywell International will join the Dow replacing Exon Mobil, Pfizer and Raytheon Technologies respectively. As a result, we may see some short-term volatility ahead of the close. I am still flat the Dow and today I will raise my buy level to 28250/28450 with a higher 28095 stop. I still do not want to be short the Dow at this time.
September NASDAQ
Looking at the valuations of tech stocks I can find no reason to buy them. The only reason that traders are buying these stocks would be the belief that the price will be higher tomorrow. This is a dangerous market with valuations at nose-bleed levels but impossible to be short as I found out to my cost overnight as I was stopped out of my latest 11825 short position at 12065 and I am still flat. The NASDAQ has short-term support from 11850/11940 where I will be a small buyer with a tight 11775 stop. The next resistance level for the NASDAQ is from 12190/12290 where I will be a small seller with a 12405 wider stop.
September BUND
The Bund rallied after I posted on Friday and as a result I was able to exit my 175.55 long position for a small loss at 175.40 and I am still flat. Given the level of debt, Central Banks have to do everything in their power to prevent Bond Yields from rallying as Governments will not be able to afford Interest Payments on any spike in Yields. The Bund has support from 174.70/175.20 where I will again look to buy the market with a 174.35 stop. If I am taken long I will have a T/P level at 175.55.
Gold Rolling Contract
The volatility in Gold over the past few weeks has been insane. As long as Gold does not break and close below trendline support at 1800, then Gold will continue to be a buy on dips. I am still flat and today I will raise my buy level slightly to 1910/1925 with a 1897 stop.
Silver Rolling Contract
Trendline support for Silver comes in at 25.50 and as long as we do not break and close below here, Silver will continue to be a buy on dips. I am still flat and today I will raise my buy level to 26.50/27.10 with a higher 25.95 stop.
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