U.S Indices closed weak but well – off intra-day lows led by technology weakness and Dollar strength. Investors continued to rotate out of risky assets heading into the three-day weekend. A U.S Dollar rally means that U.S.-made goods cost more in other currencies, possibly weighing on growth. This has been the case over the past two days, as other global central banks have said they may need to weaken their currencies. There were also stimulus headlines, with members of Congress talking down the chances of a deal before the November election. Economic data was positive, with Non-Farm Payrolls beating estimates. And the Unemployment rate fell to 8.4%. This continued the recent strength in the rebound for the job market. The NASDAQ 100 ended Friday with a loss of 1.27%, a nice rebound off its earlier 5% loss. European Markets rose, before selling off with U.S Markets in a repeat of Thursday’s price action. The European Central Bank is under increasing pressure to respond with more stimulus to support the economy as the Euro has weakened against the dollar. Banks rallied on a Reuters report that Spain’s Caixabank SA and Bankia SA are considering a merger to create the largest lender in the country. Bank of England Monetary Policy Committee member Michael Saunders said there is a good chance additional stimulus measures will be needed to support the economy. French Finance Minister Bruno Le Maire said the country could extend its support programme for furloughed workers beyond 2020 if needed. Elsewhere, Oil closed 4.48% lower as investors sold Crude Assets to raise cash to cover margin calls.
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 made 550 points on Friday and is now ahead by 194 points for September, having made 2383 points in August, 3128 points in July, 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 0.81% lower at a price of 3426.
The Dow Jones Industrial Average fell 150 points for a 0.56% decline to close at 28,133.
The NASDAQ 100 fell 1.27%, closing at a price of 11,622.
The Stoxx Europe 600 Index fell 1.5%.
The MSCI Asia Pacific Index fell 1.1%.
This morning the Nikkei closed 0.5% lower at 23,089.
Currencies
The Bloomberg Dollar Spot Index again closed 0.1% higher.
The Euro closed flat $1.1830.
The British Pound closed 0.6% lower at $1.3210.
The Japanese Yen closed unchanged at 106.22 per dollar.
Bonds
The yield on 10-year Treasuries closed eight basis points higher at 0.72%.
Germany’s 10-year yield closed three basis points higher at -0.45%.
Britain’s 10-year yield closed three basis points higher at 0.26%.
Commodities
The Bloomberg Commodity Index fell 0.2%.
West Texas Intermediate closed 4.48% lower at $39.48 a barrel.
Gold closed unchanged at $1,930.10 an ounce.
This morning on the Economic Front we already had the release of German Industrial Production for July which came in lower than the +4.5% expected with a +1.2% print. With U.S Markets closed today for the Labour Day Holiday, the only other data of note is Euro-Zone Sentix Investor Confidence at 9.30 am.
September S&P 500
An incredible trading session on Friday with the S&P trading higher to my 3482 sell level ahead of the Non-Farm Payrolls before hitting an afternoon low on panic selling at 3348. Subsequently we rallied over 100 Handles to trade at a rebound high of 3453 before selling off to close 0.8% lower at 3426. A VIX above 30 guarantees plenty of two-way price action. After the VIX spiked above 38, we saw strong buying of equities across the board, leading to a turnaround in the VIX which closed 8% lower at 30.75. After the S&P hit my 3482 sell level I covered this position at my revised 3472 T/P level as I wanted to be flat ahead of NFP. With market having their most volatile week in three months, you have to trade in small size with wider stops. I hate having a fixed stop as so many times you get stopped out intra-day before the market reverses. This happened to me last Wednesday when I was stopped out twice in the S&P at 3551 and right at the top at 3581. Last Friday after the S&P hit my 3400 average buy level I emailed my Platinum Members that my 3382 stop will only be used if we close below this level. Thankfully the S&P rallied over 60 Handles, enabling me to cover this trade at 3415 and I am still flat. As long as the S&P can hold last Friday’s 3348 low print I will continue to be a buyer on dips as the Central Banks cannot allow the markets to crash given all the money they have thrown at these markets since the March lows. The S&P Futures Market will close at 4.30 pm this afternoon before re-opening at 11.00 pm for tomorrow’s session. I will be a small buyer from 3378/3393 with a 3365 stop. Given the large ‘’Open Gap’’ I do not want to be short the S&P at this time.
EUR/USD
The Euro just missed my 1.1760 buy level with a 1.1780 low print, before rallying to sit at 1.1830 this morning. I will now raise my buy level to 1.1730/1.1780 with a higher 1.1685 stop. I am not going to chase the Euro lower and I will leave my 1.1905/1.1955 sell level unchanged with the same 1.1995 stop.
September Dollar Index
No Change as I am still a buyer from 92.00/92.50 with a 91.45 stop. If I am taken long I will have a T/P level at 92.85.
September DAX
My DAX plan worked well with the market trading the whole of my buy range for a 12830 average long position before we rallied to my revised 12900 T/P level and I am still flat. This morning the DAX is trading higher at 12940 as traders continue to buy the dip. The DAX has support from 12750/12850 where I will be a buyer with a 12675 stop.
September FTSE
The FTSE just missed my initial 5740 buy level and I am still flat. I will now raise my buy level to 5730/5790 with a 5685 stop.
Dow Rolling Contract
The Dow had a wild trading session on Friday, trading in a 900 point range. We saw a lot of rotation out of technology into Financials, helped by the eight basis points rally in 10-Year Bond Yields. After the Dow hit my 28050 average buy level I covered this position for a breakeven as I had too many open positions at the time and I am still flat. The Dow has good support below the market with the 50 Day Moving Average coming in at 27100. Today, I will be a small buyer from 27700/27900 with a 27550 stop. I still do not want to be short the Dow at this time.
September NASDAQ
At one stage on Friday the NASDAQ was trading 5% lower, for a 10% decline since Wednesday’s latest all-time high. This is one of the steepest and fastest falls from an all-time high. Apple and Telsa led the declines falling 20% and 26% respectively to Friday afternoon’s low before reversing some of these losses into the close. My NASDAQ plan worked well with the market trading the whole of my buy range for a 11440 average long position before rallying to my 11660 T/P level with a 11750 rebound high and I am still flat. This morning the NASDAQ is trading lower at 11400. Given the huge ‘’Open Gap’’ from Friday’s Chicago close I will be a buyer from 11200/11360 with a 11050 wider stop. If I am taken long I will have a T/P level at 11480.
December BUND
This morning the September Bund has opened in my buy range and I bought the market at 176.25. As the September Contract rolls in the next few days I have exited this position here at 176.45 and I am now flat. I have now rolled to the December Contract which trades at 285 points Discount to the September Contract. The December Contract has support from 172.80/173.20 where I will be a buyer with a 172.45 stop. If I am taken long I will have a T/P level at 173.55.
Gold Rolling Contract
No Change as I am still a buyer from 1882/1905 with the same 1878 stop.
Silver Rolling Contract
I am still flat and today I will raise my sell level slightly to 27.70/28.20 with a higher 28.81 stop. If I am taken short I will have a T/P level at 27.25.
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