U.S. Equity Markets closed lower on Wednesday (SPX -0.9%, RUT -0.8%, DJIA -1%) with the tech-heavy NASDAQ 100 (-1.6%) lagging as it was weighed on by weakness in mega-cap names Apple (AAPL) (-2.2%) and Nvidia (NVDA) (-2.8%). AAPL was weighed on by cautious analyst commentary and reports of Mac delays, while NVDA was hit after it announced a flaw in the blackwell AI chip, although TSMC (TSM) fixed the issue. As such, sectors were largely in the red with Consumer Discretionary and Technology the laggards, while Real Estate and Utilities were the only sectors in the green due to their haven nature in risk off trade. Once again, there was a deluge of earnings and stock specific headlines with the highlights arguably the McDonald’s (MCD) (-5%) E.Coli outbreak, and Boeing (BA) (-1.8%) underwhelming after a weak earnings report added to recent woes. In FX, the Dollar Index continued on its recent strength amid the ongoing ‘Trump Trade’ as he garnered further momentum into winning the election. Antipodeans underperformed given the risk off trade although the Canadian Dollar was the G10 ‘outperformer’ (ex Dollar), despite the Loonie initially weighed on by the Bank of Canada policy rate announcement, whereby they cut rates by 50bps as anticipated and appeared to declare victory against inflation. The crude complex was weaker, weighed on by the broad Dollar strength and bearish EIA inventory data. Treasuries saw notable weakness with the curve bear flattening, in what seemingly was a continuation of the Trump Trade. For the record, the Fed Beige Book noted on balance, economic activity was little changed in nearly all Districts since early September, though two Districts reported modest growth. Existing Home Sales fell 1% in September to 3.84 million from 3.88 million, and slightly beneath the expected 3.86 million. Inventory of homes for sales was 4.3 months’ worth, slightly increasing from August’s 4.2 months’ worth. The supply of homes for sale continued to rise, with inventory rising 23% Y/Y. Increases in supply are hitting home price growth, highlighted by the median home prices declining for a third consecutive month. Overall, Oxford Economics expects resilient demand to keep a floor under home prices, particularly if mortgage rates resume their decline as we expect. In addition, Ox Eco notes that their baseline assumes a modest recovery in home sales gets underway in Q4 and gains traction in 2025. However, the consultancy adds, the recent rebound in mortgage rates and Hurricanes might delay that recovery. Finally, we had the release of the Fed’s Beige Book: On balance, economic activity was little changed in nearly all Districts since early September, though two Districts reported modest growth. Reports on consumer spending were mixed, with some Districts noting shifts in the composition of purchases, mostly toward less expensive alternatives. Regarding the labour market, employment increased slightly during this reporting period, with more than half of the Districts reporting slight or modest growth and the remaining Districts reporting little or no change. Many Districts reported low worker turnover, and layoffs reportedly remained limited. Demand for workers eased somewhat, with hiring focused primarily on replacement rather than growth. Meanwhile, wages generally continued to rise at a modest to moderate pace. On prices, inflation continued to moderate with selling prices reportedly increasing at a slight or modest pace in most Districts. Home prices edged up in many Districts, while rents were reported to be steady or down slightly. Elsewhere both Oil and Gold closed lower by 1.4%.
To mark my 3075th issue of TraderNoble Daily Commentary I am offering a special 2-Year rate of Euro 2750 for my Platinum Service which includes 1 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 was flat yesterday and is still ahead by 1440 points for October after ending September with a gain of 4402 points following a 301-point loss for August after closing July with a gain of 1918 points while June closed with a gain of 2074 points, having made 1843 points in May. The Platinum Service made 4010 points in April after ending March with a gain of 2113 points. February closed with a gain of 1606 points, after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Equities
The S&P 500 closed 92% lower at a price of 5792.
The Dow Jones Industrial Average closed 409 points lower for a 0.96% loss at a price of 42,514.
The NASDAQ 100 closed 1.55% lower at a price of 20,066.
The Stoxx Europe 600 Index closed 0.30% lower.
Yesterday, the MSCI Asia Pacific closed 0.6% lower.
Yesterday, the Nikkei closed 0.80% lower at a price of 38,104.
Currencies
The Bloomberg Dollar Spot Index closed 0.32% higher.
The Euro closed 0.15% lower at $1.0781.
The British Pound closed 0.3% lower at 1.2919.
The Japanese Yen fell 0.9% closing at $152.66.
Bonds
Germany’s 10-year yield closed 1 basis points lower 2.31%.
Britain’s 10-year yield closed 4 basis points higher at 4.21%.
U.S.10 Year Treasury closed 4 basis points higher at 4.25%.
Commodities
West Texas Intermediate crude closed 1.35% lower at $70.77 a barrel.
Gold closed 1.4% lower at $2715 an ounce.
This afternoon on the Economic Front we have German, Euro-Zone and U.K. Manufacturing PMI at 8.30 am, 9.00 am and 9.30 am respectively. Next, we have the Chicago Fed National Activity Index and the Weekly Jobless Claims at 1.30 pm, followed by U.S. Manufacturing PMI at 2.45 pm. Finally, we have New Home Sales at 3.00 pm, and the Kansas City Fed Manufacturing Activity Index at 4.00 pm.
Cash S&P 500
To say that the American Equity Market is probably one of the most challenging to analyse currently is a huge understatement. The correlation between a strong Dollar and higher Bond Yields has so far been ignored by the broader Indexes. I cannot remember the last time a 4% rally in the Dollar accompanied by a 60-basis point rise in 10-Year Yields has led to both the S&P and Dow trading close to all-time highs. To add to my conundrum the $NYSI is close to been maximum oversold. For me the $NYSI Stochastic has one of the best technical signals to follow over the last few years. It may give a buy/sell signal a few days early but ultimately has worked well for all of us. I deliberately left the above paragraph from yesterday in today’s Commentary. Adding further to the confusion is the internal weakness of the market as shown by the McClellan Oscillator which closed with a reading of -165 last night. Normally when these two signals are in line, I will be an aggressive buyer of the S&P even though the MO is still short of my -250 reading to justify a quick 5% rally. The S&P bounced off my 5767-support level that I outlined on Monday. Unfortunately, I did not have a buy set-up at this level yesterday and I am still flat. Today, I will be a strong buyer from 5757/5773 with a wider 5739 ‘’Closing Stop’’. I will now lower my sell level slightly to 5850/5866 with a 5885 ‘’Closing Stop’’ which is just above last week’s intra-day high. If I am taken long, I will have a T/P level at 5793. If I am taken short, I will have a T/P level at 5836. If this view changes I will be back with a new update for my Platinum Members.
EUR/USD
The Euro made a new two-month low at 1.0761 yesterday before having a small rally into the New York close. There is no doubt that the Euro is severely oversold and due at least a bounce to offset its oversold condition. I am still long at an average rate of 1.0830 with the same 1.0745 ‘’Closing Stop’’. I will also leave my 1.0880 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
No Change: I am still short the Dollar from Monday at a price of 103.95 with the same 103.50 T/P level. I will add to this position on any further move higher to 104.75 while leaving my 105.25 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
No Change: The DAX never came close to yesterday’s sell range, and I am still flat. It is noticeable that the DAX has made a series of lower highs since last week’s latest all-time-high. Now this may be nothing or could be the start of a meaningful correction that is long overdue. I will continue to sell the DAX on any small rally higher to 19540/19640 with the same 19725 tight ‘’ Closing Stop’’. I still do not want to be long the DAX at this time.
Cash FTSE
No Change: The FTSE never came close to yesterday’s sell range, and I am still flat. We have short-term resistance from 8350/8420. I will now lower my sell level to this area with a now lower 8505 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 8305.
Dow Rolling Contract
The Dow hit a low at 42293 yesterday afternoon before bouncing 200 points off this low into the close. The 42000/42250 area should now act as short-term support. I will be a small buyer on any dip to this area with a tight 41795 ‘’Closing Stop’’. Given how weak both the $NYSI and McClellan Oscillator are I have no interest in shorting the Dow at this time. If I am taken long, I will have a T/P level at 42450.
Cash NASDAQ 100
Given how weak some of my technical signals are at this time which is insane given how small the correction has been so far, I will look to buy the NDX from 19780/19940 with a 17655 ‘’Closing Stop’’. I will not chase the NDX lower as I continue to be a seller on any further rally to 20460/20620 with the same 20805 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 20335. If I am taken long, I will have a T/P level at 20030. If these views change, I will be back with a new update for my Platinum Members.
December BUND
I am still long the Bund from Tuesday at a price of 132.70 with the same 133.20 T/P level. I will add to this trade at 132.00 while leaving my 131.35 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
I am still flat Gold as I refuse to chase the market higher waiting patiently for a long overdue correction. Gold has support from 2650/2676 where I will continue to be a buyer with the same 2639 tight ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2693.
Silver Rolling Contract
Silver followed Gold lower, hitting Wednesday’s buy range for a now 33.90 long position. I will continue to look to add to this trade on any further move lower to 33.00 while leaving my 31.55 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 34.60. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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