U.S Indices rebounded from Tuesday’s late sell-off, with vaccine news in focus. Moderna (MRNA) announced that it had received another $1.5 billion from the U.S. government for 100 million doses. And Pfizer (PFE) and BioNTech (BNTX) also said their vaccine data had been peer-reviewed, showing it was “well tolerated” by patients. Stimulus remained at the back of investors’ minds, after Senate Majority Leader Mitch McConnell said Republicans and Democrats have not resumed Coronavirus-related stimulus negotiations since talks broke down last week. This was echoed by House Speaker Nancy Pelosi, who said both parties remain “miles apart” on what should be included in the next stimulus bill. Mortgage rates hit another all-time low, boosting housing demand. The S&P closed with a solid gain of 1.4%. In Europe, Germany warned the Russian Coronavirus vaccine had not been sufficiently tested. Euro-Zone Industrial Production data for June were than lower expected, signalling the regional economic rebound may be slower than anticipated. On a monthly basis, we can see the data are rapidly improving. This is also another signal that April likely marked the bottom of the economic downturn. As a result the DAX closed higher for the eighth consecutive trading session, Elsewhere, Gold rebounded $60, while Crude Oil rose 2.36% on a larger-than-expected drawdown in Inventories.
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Equities
The S&P 500 closed 1.4% higher at a price of 3380.
The Dow Jones Industrial Average rose 290 points for a 1.05% gain to close at 27,976.
The NASDAQ rose 2.59%, closing at 11,157.
The Stoxx Europe 600 Index increased 0.5%.
The MSCI Asia Pacific Index rose 0.9%.
This morning the Nikkei is closed 1.78% higher at 23,249.
Currencies
The Bloomberg Dollar Spot Index decreased 0.2%.
The Euro closed rose 0.5% to close at $1.1790 after a volatile session.
The British Pound closed 0.1% higher at $1.3070.
The Japanese Yen closed flat at 106.50 per dollar.
Bonds
The yield on 10-year Treasuries rose two basis points to 0.66%.
Germany’s 10-year yield closed three basis points lower at -0.46%.
Britain’s 10-year yield rose three basis points to 0.23%.
Commodities
The Bloomberg Commodity Index fell 0.3%.
West Texas Intermediate rose 2.36% to $42.15 a barrel.
Gold weakened 1.05% to close at $1,918.10 an ounce.
This morning on the Economic Front we already had the release of German Final CPI which came in as expected with a fall of 0.1%. The only other data of note on either side of the Atlantic is the U.S Weekly Jobless Claims and the Import/Export Price Index at 1.30 pm.
September S&P 500
Everytime, we get a shakeout n the S&P, the market rebounds the next day as the buy the dip mentality shows no sign of ending. The S&P and Dow have now closed higher for eight of the past nine trading sessions as the rally has now gone parabolic. Shortly after I posted the S&P hit my 3345 T/P level on Tuesday’s late 3335 long position before rallying to trade the whole of my sell range. I went short at 3371 before exiting this trade earlier this morning at 3365 and I am now flat. The S&P is to close to its February all-time high not to expect a test of this level before we see a more meaningful sell-off. The Market Cap to GDP has now risen to an unsustainable 170%, which is the highest level in history but with the Fed’s intent on owning everything it is extremely difficult to be short. The S&P has resistance from 3386/3400 where I will be a seller with a 3411 stop. Given how overbought the S&P is trading I am reluctant to chase this market higher and today my buy level will be from 3336/3351 with a 3324 stop.
EUR/USD
The Euro has rallied to yesterday’s sell range and I am now short in small size at 1.1830. I will add to this position at 1.1870 with an unchanged 1.1905 stop. I will now raise my T/P level on this position to 1.1800 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
September Dollar Index
I am still flat the Dollar and as I am short the Euro, I will now lower my Dollar buy level to 92.50/92.90 with a 92.15 stop.
September DAX
As I mentioned in my Economic Commentary above that the DAX has now closed higher for eighth consecutive trading sessions. The DAX is only down less than 2% for the year and has now rallied over 5000 points since its March 23 low. The latest move higher has me short at 13040. I will add to this trade at 13140 with a now higher 13205 tight stop. I will also raise my T/P level on this position to 13000 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
September FTSE
The FTSE traded the whole of my sell range for a 6235 average short position. As I was short the S&P and DAX, I covered this short position for a small loss at 6240 and I am still flat. This morning the FTSE is trading lower at 6199. The FTSE has resistance from 6245/6285 where I will be a seller with a 6320 stop. I will now raise my buy level to 6080/6120 with a 6035 stop.
Dow Rolling Contract
My Dow plan worked well with the market trading higher to my 28000 sell level before selling off to my revised 27900 T/P level and I am still flat. The Dow has strong resistance from 28030/28230 where I will again look to sell with a 28375 wider stop. Given how severely overbought the Dow is trading after rallying 2000 points in just over a week, I am reluctant to chase the market higher and I will leave my 27100/27300 buy level unchanged with the same 26950 stop.
September NASDAQ
Just before the close the NASDAQ rallied to my initial 11180 sell level before selling off to my revised 11125 T/P level and I am still flat. The NASDAQ has resistance from 11220/11320 where I will again look to go short with a 11405 stop. Meanwhile, I will leave my 10790/10890 buy level unchanged with the same 10735 tight stop.
September BUND
I am still flat as the Bund again closed lower. I will now lower my sell level to 176.85/177.35 with a 177.71 stop.
Gold Rolling Contract
Gold rallied $60 shortly after I posted yesterday morning and I am still flat. I will now raise my buy level to 1862/1882 with a higher 1847 stop.
Silver Rolling Contract
I am still flat as Silver never came close to yesterday’s buy level. I will now raise my buy range to 23.90/24.60 with a 23.15 stop.
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