U.S. Equity Markets initially resumed the session on a strong footing but shortly after the US open the optimism faded with stocks tumbling throughout the rest of the session with stocks closing well in the red with underperformance in the RUSSELL 2000. Sectors ultimately closed mixed with gains seen in Utilities, Energy and Financials, while Consumer Discretionary, Materials and Tech lagged; Comms also finished red. In healthcare, the weakness was largely led by a tumbling Eli Lilly (LLY) on the back of Novo Nordisk (NVO) Wegovy sales missing estimates, hitting the GLP1 competitor, while CVS (CVS) missed on revenue and light FY guidance. T-Notes were pressured throughout the session with a slew of corporate and treasury supply weighing, with the 10 Year Treasury Auction seeing a very weak reception with a chunky 3.1bps tail. In FX, the Dollar was bid but primarily as a function of the Japanese Yen weakness after Bank of Japan Deputy Governor Uchida overnight said that the BoJ will not hike rates when markets are unstable, noting that Ueda shares his views. Elsewhere, the cyclical currencies outperformed, particularly the New Zealand Dollar after a strong jobs report overnight but all the risk-sensitive currencies were off best levels as equities nose-dived in the US afternoon. Crude prices held onto the bid on geopolitical tensions, bullish inventory data, and Libya’s NOC confirming its force majeure of the Sharara oil field. The 10 Year Treasury Auction was weak. The US Treasury sold USD 42 billion of 10yr notes at a high yield of 3.960%, showing a whopping 3.1bp tail vs the 3.929% WI. The Bid-to-Cover of 2.32x was well beneath the prior and average of 2.58x and 2.52x, respectively. The breakdown saw dealers take an above average 17.9%, while direct demand took a step back to 16% from 20.9%, beneath the 17.1% average. Indirect demand slipped marginally and was a touch beneath the six-auction average. Elsewhere, Oil closed 2.96% higher at 75.37 while despite a stronger Dollar, Gold ended Wednesday with a loss of 0.4%.
To mark my 3050th 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 made 385 points yesterday and is now down by 958 points 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 0.77% lower at a price of 5199.
The Dow Jones Industrial Average closed 234 points lower for a 0.60% loss at a price of 38,763.
The NASDAQ 100 closed 1.16% lower at a price of 17,867.
The Stoxx Europe 600 Index closed 1.54% higher.
This Morning, the MSCI Asia Pacific closed 0.5% lower.
This Morning, the Nikkei closed 0.78% lower at a price of 34,817.
Currencies
The Bloomberg Dollar Spot Index closed 0.22% higher.
The Euro closed 0.1% lower at $1.0921.
The British Pound closed 0.6% lower at 1.2690.
The Japanese Yen rose 1.69% closing at $146.78.
Bonds
Germany’s 10-year yield closed 7 basis points higher 2.27%.
Britain’s 10-year yield closed 3 basis points higher at 3.95%.
U.S.10 Year Treasury closed 6 basis points higher at 3.95%.
Commodities
West Texas Intermediate crude closed 0.14% higher at $73.04 a barrel.
Gold closed 0.9% lower at $2388 an ounce.
This morning on the Economic Front we have no data of note from either the U.K. or the Euro-Zone. At 1.30 pm we have U.S. Weekly Jobless Claims, followed by Wholesale Inventories at 3.00 pm. Finally, at 6.00 pm we have a 30-Year Treasury Auction.
Cash S&P 500
The Yield on the 2-year U.S. Treasury Bill has been higher than the yield on the 10-year U.S. Treasury Note for a record 765 days, from July 5, 2022, to the current date. This is known as an-inverted yield curve, which has an excellent record of preceding economic contractions. Since the early 1980s, economic turmoil usually occurs after the yield ‘’Uninverts’’ when the yield on the longer-dated paper rises above the yield on the shorter-dated paper. As I go press, the 2-10 yield curve is only inverted by 3.19%, the smallest inversion since the upside-down condition started on July 5, 2022. It appears, finally, that the curve will soon ‘’Univert’’ which will mark the start of the countdown to a U.S. economic recession. I have said numerous times over the past week that the Fed made another serious error in not cutting rates last week. If the market continues to make lower highs and tests the lows made on Monday morning, then the Fed will have no choice but to do an out-of-meeting rate cut of at least 50 basis points. Having this backdrop makes it extremely difficult to be short as we will see a strong rally on any rate-cut announcement. The S&P hit an afternoon high yesterday at 5331 – just falling short of my 5345-sell range- before plunging into the close and again overnight to a low at 5156. The ‘Fear & Greed’’ Index closed slightly lower last night at 20 which is another reason not to be chasing prices lower from here. Yesterday’s plunge saw the S&P trade the whole of my buy range for a 5211 average long position before rallying to my revised 5227 T/P level as emailed to my Platinum Members and I am now flat. The S&P has short-term support from 5131/5155 where I will be a strong buyer with a 5115 ‘’Closing Stop’’. If I am taken long and subsequently stopped out of this position I will be an aggressive buyer from 5000/5030 with no stop. My second buy level contains a number of important Moving Averages, including the 200 Day MA. Ahead of the weekend I no longer want to be short the S&P. If any of these price ranges change, I will be back with a new update for my Platinum Members. If I am taken long, I will have a T/P level at 5190. If I am taken long a second time, I will have a T/P level at 5120.
EUR/USD
The Euro has traded in a narrow range over the past 48 hours, and I am still flat. The Euro has strong resistance from 1.1020/1.1090 where I will be a small seller with a 1.1155 ‘’Closing Stop’’. The Euro has support below from 1.0800/1.0880 where I will be a buyer with a higher 1.0745 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 1.0970. If I am taken long, I will have a T/P level at 1.0930.
Dollar Index
The Dollar is back to its Daily small range trading. I am still long at an average rate of 103.30 with the same 102.35 ‘’Closing Stop’’. Meanwhile, I will leave my 103.70 T/P level 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: As I am now long the NDX I will stay flat the DAX as I have no interest in initiating a short position at these levels. If this view changes, I will be back with a new update for my Platinum Members.
Cash FTSE
The FTSE was strong yesterday, never coming close to my buy range and I am still flat. This morning the FTSE is trading at a price of 8120. I will now raise my buy level to 7960/8030 with a higher 7895 tight ‘Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
Another wild trading session for the Dow. The market hit an intra-day high at 39485 before plunging to an overnight low at 38560. This move lower saw my 38650-buy level triggered before rallying this morning to my revised 38825 T/P level and I am now flat. The Dow has strong support from 38100/38350. I know this range is well below current prices, but this is my only interest in buying the market. With the VIX closing at a price of 28 last night most surprises will be on the downside of the market. If I am taken long, I will have a T/P level at 38630.
Cash NASDAQ 100
We were right to concerned that the rally in the NDX might be a bull-trap. Thankfully before the NDX sold off the market rallied to my 18440 T/P level on my 18390 large average long position. Subsequently, I emailed my Platinum Members to buy the NDX which I did at an average rate of 17975, making the earlier 18440 T/P level even more significant. I am still long with an 18070 T/P level. I will have a 17695 ‘’Closing Stop’’ on this position. I f any of the above levels are hit, I will be back with a new update for my Platinum Members.
September BUND
I am still flat the Bund. The Bund has support below from 133.00/133.70 where I will be a buyer with the same 132.35 ‘’Closing Stop’’. The Bund has resistance from 135.50/136.20 where I will be a seller with a higher 136.85 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 134.30. If I am taken short, I will have a T/P level at 134.95.
Gold Rolling Contract
Gold traded in a narrow range for the third consecutive trading session, and I am still flat. I will not chase the market higher as I continue to be a buyer on any dip lower to 2358/2374 with the same 2343 ‘’ Closing Stop’’.
Silver Rolling Contract
Overnight, Silver traded lower to my next buy level at 26.40 for a now 28.10 average long position. I will continue to have no T/P level or Stop on this position. If this view changes, I will be back with a new update for my Platinum Members.
Please Note: There will be no Daily Commentary tomorrow. Any of my calls that are not triggered today and are subsequently executed on Friday will see me return with updated emails for my Platinum Members.
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