U.S. Equity Markets fell as investors assessed mixed corporate earnings amid concern over the U.S.-China trade spat. Treasuries rallied. Industrials led the S&P 500 Index below 3,000, with CSX Corp. plunging 10% after a weakened sales forecast stoked fears of a prolonged freight slump. The Dow Jones Transportation Average, a barometer of economic growth, tumbled. Bank of America Corp. advanced as gains in its retail division drove overall profit to a record. In after-hours trading, Netflix Inc .sank on a surprise loss of U.S. customers for the second quarter, while International Business Machines Corp. climbed as its operating earnings beat analysts’ estimates. While early indications are usually unreliable when it comes to corporate profits, investors have closely watched those reports for clues on the state of the world’s largest economy amid the threat of a trade war. Market sentiment was clearly dented after President Donald Trump said Tuesday he could impose more tariffs on China, pushing stocks down from a record high.
To mark my 1875th 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 50 points yesterday and is now ahead by 678 points for July, having made 1346 points in June,1722 points in May, 955 points in April, 1027 points in March, 1013 points in February and 1671 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 U.S. economy expanded at a modest pace with job gains slowing somewhat and inflation remaining stable or slightly weaker, a Federal Reserve survey showed. The report is unlikely to sway the debate policy makers will have during the July 30-31 meeting. They’re expected to reduce rates by a quarter point, though a handful of regional Fed presidents appear uneasy about a cut. In after- hours trading Netflix fell 13% on weaker earnings driving the Futures Market lower. The S&P 500 lost 0.7% to close at 2,984. In Europe, The Stoxx Europe 600 Index slid 0.4%.
Currencies
Here is a summary of the main changes in F.X Markets:
Despite the volatility in Equity Markets, currencies continued to trade in narrow ranges.
The Bloomberg Dollar Spot Index decreased 0.1%.
The Euro rose 0.1% to $1.1223.
The Japanese Yen increased 0.2% to 108.03 per dollar.
Bonds
A late sell-off in Equity Markets saw Bond markets rally with the yield on 10-year Treasuries falling five basis points to 2.05%. In Europe the buy the dip for the German Bund continued with the 10-year yield closing five basis points lower at -0.31%,
Commodities
Oil sank after a mixed U.S. government report showed a surprising drop in fuel demand last week. West Texas Intermediate crude dipped 1.5% to $56.78 a barrel. Bitcoin climbed, while still trading below $10,000.
This morning on the Economic Front we have UK Retail Sales and the Bank of England Credit Conditions Survey at 9.30 am. This is followed by US Weekly Jobless Claims and the Philly Fed Manufacturing Survey at 1.30 pm. Finally the Fed’s Bostic and Williams are speaking at 2.30 pm and 7.15 pm respectively.
September S&P 500
As I was flying to Florida late yesterday with little or no WIFI access I emailed my Platinum Members to lower their S&P buy level to 2983/2991 with a 2980 stop. The awful results from Netflix saw the S&P trade the whole of this buy range for a now average long position at 2987. Early this morning I was stopped out of this trade at 2980 and I am now flat. The S&P has very strong support from 2957/2967. I will be an aggressive buyer on any dip to this area with a 2949 stop. Yet again the Daily Sentiment Index proves what a valuable technical signal it is especially when we have a reading north of 90%. Clearly I should have paid more attention given the 30 Handle sell-off in the S&P since I posted on Wednesday morning. However the fact that the S&P has rallied 300 Handles since the June 3rd low, shorting the market has been costly. If I am taken long I will have a T/P level at 2974.
EUR/USD
Overnight the Euro has finally rallied to my 1.1235 T/P level on my latest 1.1215 long position and I am now flat. The Euro had a small rally yesterday after the IMF came out and said the US Dollar was overvalued by 6/12%. Today I will again look to buy the Euro on any dip lower to 1.1170/1.1210 with a 1.1135 stop.
September Dollar Index
I am still flat the US Dollar. Today I will lower my buy level slightly to 95.80/96.20 with a 95.45 tight stop.
September DAX
As well as lowering my buy level in the S&P above, I also lowered my DAX buy level to 12260 which was not filled before the Market closed on Eurex at 9.00 pm and I am still flat. The DAX must hold the key 12180/12250 support area this evening or else the market will be back on a sell signal. Today my only interest in buying the market is on a dip lower to 12130/12190 with a 12075 stop.
September FTSE
Just before the New York close the FTSE traded lower to my 7445 buy level. I am still long with a now higher 7405 stop and a lower 7465 T/P level. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Just a day after reaching a two-month high, transportation stocks were yesterday’s weakest group with the Dow Jones Transportation Average falling more than 3%. My concerns about a rising VIX certainly proved correct with this Index closing over 8% higher at 14.00. Thankfully we had no buy level in the Dow itself yesterday with the market getting hit for 250 points since Tuesday’s 27405 high print. The Dow has strong support from 26850/26980 and I will be a buyer on any dip to this area with a 26780 tight stop. A break and close below the previous October 3rd high of 26951 will be bearish and opens up the possibility of much lower prices. Keep an eye on the McClellan Oscillator which closed in negative territory with a -30 closing print. Remember we have 10 Hindenburg signals on the clock and this signal is still valid until the end of September. Markets are facing a crucial two weeks ahead of the FOMC Meeting on July 30/31.
September NASDAQ
Unfortunately the NASDAQ just missed my sell level before getting hit hard after Netflix reported its earnings. I am still flat and I will now lower my sell level to 7930/7980 with a 8025 stop. I still do not want to be long the NASDAQ at this time.
September BUND
The buy the dip in the Bund continues with the market rallying to my 173.00 sell level. I am still short with a now lower 173.35 stop. I will also raise my T/P level on this position to 172.80.
Gold Rolling Contract
Gold exploded to the upside yesterday making me look silly for cutting my Tuesday 1402 long position at 1404 and I am still flat. I should have paid more attention to Silver’s reversal to the upside on Tuesday and which continued yesterday with another 2% rally. Today I will raise my Gold buy level to 1405/1413 with a 1397 stop.
Silver Rolling Contract
Unfortunately Silver just missed my buy level yesterday before rallying 50 cents and I am still flat. Silver has resistance at the Feb 20 high of 16.29 and a break and close above here will be bullish. Today I will raise my buy level to 15.55/15.95 with a 15.20 stop.
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