U.S. Indexes closed lower on Monday, with the NASDAQ 100 the clear underperformer as Technology led the broader market lower. The weakness in Tech was driven by sharp losses in memory names (DRAM -c. 9%) and semiconductor stocks (SOXX -5%) amid concerns surrounding SK Hynix’s upcoming earnings. The stock also gave back some of Friday’s gains following SK Hynix’s US listing. Broader risk sentiment was also weighed down by ongoing geopolitical tensions between the US and Iran after further military strikes over the weekend. President Trump announced that the US would reinstate the blockade on Iran and assume control of the Strait of Hormuz, adding that the US would impose a 20% charge on cargo vessels transiting the Strait in exchange for safe passage. The developments pushed crude prices higher throughout the session, with benchmarks settling near their highs after the US military confirmed the blockade on Iran would take effect from Tuesday. Meanwhile, retaliatory strikes between Saudi Arabia and Yemen were seen, adding to concerns that the conflict could broaden across the region. Fed commentary also influenced markets after Governor Waller struck a hawkish tone. He said another firm core inflation reading in Tuesday’s CPI report would force the Fed to consider a near-term rate hike, adding he would view such an outcome as a genuine signal rather than noise. Conversely, a softer reading would not be sufficient on its own, with Waller saying he would need to see several months of cooler inflation before becoming confident that price pressures were moving back towards target. The combination of higher oil prices and Waller’s hawkish comments pushed Treasury yields higher across the curve, with the front end yields leading as markets increased expectations for additional Fed tightening. In FX, the Dollar outperformed as higher Treasury yields and safe-haven demand supported the Greenback. The Canadian Dollar also gained on the back of stronger oil prices, while the traditional low-yielding currencies, the Japanese Yen and Swiss Franc, lagged. Attention now turns to Tuesday’s CPI report and Chair Warsh’s testimony before the House. Markets will be particularly focused on the core inflation reading following Waller’s comments, while investors will also be listening for any indication of how Warsh interprets the latest inflation data, although he is expected to continue avoiding explicit forward guidance. Elsewhere, Oil closed higher by a whopping 9% while Gold ended Monday’s session with a 3% loss.
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For anyone following my Platinum Service it made 50 points yesterday and is now ahead by 3624 points for July after ending June with a new record of 10527 points after ending May with a loss of 1104 points, having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a previous record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 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 0.79% lower at a price of 7515.
The Dow Jones Industrial Average closed 138 points lower for a 0.26% loss at a price of 52,498.
The NASDAQ 100 closed 1.88% lower at a price of 29,264.
The Stoxx Europe 600 Index closed 0.04% lower.
Yesterday, the MSCI Asia Pacific closed 1.2% lower.
Yesterday, the Nikkei closed 1.92% lower at 67,242.
Currencies
The Bloomberg Dollar Spot Index closed 0.28% higher.
The Euro closed 0.23% lower at $1.1386.
The British Pound closed 0.33% lower at $1.3356.
The Japanese Yen fell 0.47% closing at $162.46.
Bonds
U.K.’s 10-Year Gilt closed 8 basis points higher at 4.97%.
Germany’s 10-Year Bund Yield closed 6 basis points higher at 3.10%
U.S.10 Year Treasury closed 6 basis points higher at 4.62%.
Commodities
West Texas Intermediate crude closed 8.79% higher at $77.69 a barrel.
Gold closed 3.09% lower at $3992.10 an ounce.
Today on the Economic front we have German Wholesale Price Index at 7.00 am, followed by a speech from Bank of England Governor at 9.45 am. Next, we have U.S. CPI at 1.30 pm. Finally, we have speeches from Fed Members Barr, Goolsbee, Cook and Bowman at 5.40 pm, 6.00 pm, 6.30 pm and 7.55 pm respectively.
Cash S&P 500
Even after falling by around 0.8% on Monday, the S&P 500 is still roughly where it was on July 2. However, dispersion remains high, implied correlations remain low, and the market is still out of balance when comparing single-stock volatility with index-level volatility. As far as I can tell, the only time the dispersion index has been higher was in 2020. That means it is now even higher than it was during the April 2025 tariff tantrum. This is being driven by the wide wedge that still exists between single-stock and index-level implied volatility. The spread between VIXEQ and the VIX remains near the highs reached just days ago and is still well above 30. What is particularly interesting is that, of the 142 S&P 500 stocks I track in my sector breakdowns, 52% have implied volatility near their 52-week highs, while none are near their lows. Typically, when implied volatility is this elevated across so many stocks, the S&P 500 is falling—not rising. That suggests IV is not necessarily increasing because the market fears individual stocks or views them as particularly risky. Instead, the market’s behavior appears consistent with a gamma-squeeze-like feedback loop. In essence, VXSMH is at 64 not necessarily because the market is deeply concerned about semiconductor stocks or because investors are putting on massive hedges. Rather, realised volatility in SMH is already at 62.4. The large price movements in the underlying stocks are helping to drive implied volatility higher, creating dispersion and distortions across the market. Semiconductor stocks appear to be caught in a gamma squeeze, much like Micron was. With these stocks moving 3% to 4% a day, realised volatility will remain high, and implied volatility will likely remain elevated as a result. The problem is that stocks do not move 3% to 4% every day forever. Eventually, realised volatility will begin to fall, likely pulling implied volatility lower with it. ‘’Call’’ positioning heavily outweighs ‘’Put’’ positioning in many of these names, including Micron. As IV falls and call premiums decay, the associated delta exposure may also begin to unwind. Ultimately, this trade will end. How it ends—and what that unwind looks like—are the real questions. If it has been driven largely by options-related mania, there is a meaningful risk that the ending will not be orderly. TBD. I am still flat the S&P as the market never came close to Monday’s sell range before trading lower. Today, I will now lower my sell level to 7560/7585 with a lower 7611 ‘Closing Stop’. My only interest in buying the S&P is still on a move lower 7405/7430 with the same tight 7389 ‘Closing Stop’. If I am taken short, I will have a T/P level at 7528. If I am taken long, I will have a T/P level at 7463. If any of these views change, I will be back with a new update for my Platinum Members.
EUR/USD
The boring sideways price action continues. I am still long the Euro at an average price of 1.1460 with the same 1.1345 ‘Closing Stop’. Today, I will leave my T/P level unchanged at 1.1485 as I have this position too long. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
My latest 100.60 long Dollar position worked well as the market rallied to my 101.10 T/P level and I am now flat. Today, I will again be a buyer from 99.90/101.60 with the same 99.35 tight ‘Closing Stop’. If I am taken long I will again have a T/P level at 101.10.
Russell 2000
I am still flat. Today, I will lower my sell level to 2980/3040 with a lower 3105 ‘Closing Stop’. If I am taken short, I will have a T/P level at 2930.
FTSE 100
No Change: I am still flat. I will not chase the FTSE Market higher preferring to wait for a sell-off before initiating a new long position. Today, I will continue to be a buyer from 10300/10380 with the same 10215 ‘Closing Stop’. If I am taken long, I will have a T/P level at 10460. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
I am still flat. Today, I will continue to be a small seller on any further rally to 52880/53180 with a lower 53405 ‘Closing Stop’. If I am taken short, I will have a T/P level at 52570. I still do not want to be long the Dow at this time.
Cash NASDAQ 100
The NDX reversed most of Friday’s gains as it led Monday’s decline. I am still flat. Today, I will lower my buy level to 28700/28900 with a lower 28495 ‘Closing Stop’. Ahead of CPI this afternoon, I no longer want to be short the market at this time. If I am taken long, I will have a T/P level at 29170. If any of these views change, I will be back with a new update for my Platinum Members.
December BUND
I am still long the Bund from last week at an average price of 125.55. I will now exit level to a small loss at 125.30 and reassess if triggered. I will leave my 124.75 ‘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
Gold fell 3% on Monday. This move lower saw Gold hit my buy range for a now 4010 long position. I will add to this position at 3920 while leaving my 3855 ‘Closing Stop’ unchanged. I will now lower my T/P level to 4080. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Silver hit my buy range following a 4% fall on Monday for a 57.80 long position. I will add to this position at 54.80 while leaving my 52.95 ‘Closing Stop’ unchanged. I will now lower my T/P level to 59.60. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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