US indices closed Monday with upside bias (SPX & NDX +0.3%, DJIA +0.4%) while the small-cap Russell 2000 (+1.9%) continued its outperformance, with the highlights being the failed Trump assassination attempt, which has ultimately boosted his election chances, and Fed Chair Powell nodding to inflation progress giving the Fed more confidence. The Dollar was choppy, starting the week in the green before paring as eyes turned to Powell. The Dollar Index hit lows of 104 while the Japanese Yen saw notable but brief strength after Powell’s dovish remarks. The Fed Chair acknowledged that the recent three months of inflation data has increased the Fed’s confidence inflation will return to target but caveated that more data will add to that confidence – suggesting they are not quite fully confident. Treasuries steepened in response to an increased likelihood of Trump being re-elected as President but briefly hit peaks in response to Powell, before swiftly paring into settlement. The crude complex was lower to start the week, albeit in a choppy session in thin ranges, as Chinese data overnight disappointed while Gaza talks took a pause. US Natural Gas saw chunky losses in response to a slow restart of the Freeport LNG export terminal. Sectors were mixed, with Energy and Financials sitting atop of the pile with the latter buoyed by Goldman Sachs (GS) (+2.5%) reporting strong results. Utilities were the distinct laggard and weighed on by NextEra Energy (NEE) (-6.5%) trimming its 8-day rally. Stock-specific highlights include Trump Media & Technology Group (DJT) surging after the odds of Trump winning the election increased, which also weighed on Solar Names (ENPH, FSLR), but Health Insurers (CI, CVS, UNH) and Gun Names (RGR, SWBI) saw gains. Looking ahead, Retail Sales (Jun), Fed’s Kugler, and earnings (BAC, MS, SCHW, UNH) are the highlights on Tuesday. Fed Chair Powell largely echoed remarks from his Congressional Testimonies, although he did acknowledge the last three inflation readings do add confidence to the Fed that inflation is returning to target, but more good data will add to that confidence – suggesting the Fed still want a bit more progress. The Fed Chair refrained from providing any policy guidance, noting that decisions will be on a meeting-by-meeting basis, and he is not going to send any signal on any particular meeting. The Fed Chair noted that with inflation coming down, the Fed will look at both mandates, repeating if there was an unexpected weakening of the labour market, the Fed would react. The mild June inflation reading makes Fed Member Goolsbee more confident that price pressures are easing in a way that supports lowering interest rates, according to the Wall Street Journal. Goolsbee added he is concerned that holding rates steady would contribute to an unduly restrictive policy stance; said, “We set this rate when inflation was over 4%, and inflation is now, let’s call it, 2.5%. That implies we have tightened a lot since we’ve been holding at this rate.” The Chicago Fed President added that you only want to stay this restrictive for as long as you have to, noting the economy does not look like it is overheating. He declined to comment on whether they should cut in July or wait until September; noting monetary policy is more influenced by broader expectations rather than “whether you did something today, or six weeks from today,”. Goolsbee noted that what the Fed should do at the July meeting and meetings in the imminent future, is to try and figure out where the Fed is on the path. Meanwhile, the New York Fed Manufacturing Index printed -6.6 in July, slightly better than the expected -7.0, but worse than June’s -6.0. Looking into the details, New Orders were little changed at -0.6 (prev. -1.0), Shipments ticked higher to 3.9 from 3.3, and Employment continued to contract at -7.9 (prev. -8.7). The inflation gauge of Prices Paid rose to 26.5 from 24.5, while Prices Received dipped to 6.1 from 7.1. Ahead, six-month general business conditions fell to 25.8 from 30.1, while both price metrics rose. In the report, Richard Deitz, Economic Research Advisor at the New York Fed, said “Manufacturing conditions remained somewhat sluggish in New York State in July, though orders held steady, and shipments edged slightly higher. Employment continued to contract, and capital spending plans were weak. However, firms remained fairly optimistic that conditions would improve in the months ahead.” Note, survey responses were collected between July 2nd and July 10th. Elsewhere, Oil closed Monday with a 0.32% fall, while Gold continue to build value above $2400 with a 0.3% gain.
To mark my 3025th 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 50 points yesterday and is now ahead by 244 points for July after closing June 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 to 4 updated emails throughout the trading day to demonstrate this value, a points, 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 0.28% higher at a price of 5631.
The Dow Jones Industrial Average closed 210 points higher for a 0.53% gain at a price of 40,211.
The NASDAQ 100 closed 0.27% higher at a price of 20,386.
The Stoxx Europe 600 Index closed 0.97% lower.
This Morning, the MSCI Asia Pacific closed 0.2% higher.
This Morning, the Nikkei closed 0.2% higher at a price of 41,275.
Currencies
The Bloomberg Dollar Spot Index closed 0.15% higher.
The Euro closed 0.1% lower at $1.0895.
The British Pound closed 0.1% lower at 1.2972.
The Japanese Yen fell 0.3% closing at $158.35.
Bonds
Germany’s 10-year yield closed 3 basis points lower 2.47%.
Britain’s 10-year yield closed 1 basis points lower at 4.10%.
U.S.10 Year Treasury closed 3 basis points higher at 4.22%.
Commodities
West Texas Intermediate crude closed 0.32% lower at $81.95 a barrel.
Gold closed 0.3% higher at $2421 an ounce.
This morning on the Economic Front we have the ECB Bank Lending Survey at 9.00 am, followed by the German and Euro-Zone ZEW Surveys at 10.00 am. Next, we have U.S. Retail Sales and the Import/Export Price Index at 1.30 pm. Finally, we have the NAHB Housing Market Index at 3.00 pm and a speech from Fed Member Kugler at 7.45 pm.
Cash S&P 500
The S&P made a new all-time high at 5667 before falling 37 Handles into the close. I have run out of any technical justification to be long the S&P at this time especially as the S&P has closed higher for seven consecutive weeks with a Weekly RSI above 80. In normal times such charts would ring major alarm bells. To give an example of how extended the S&P is trading: the 50 Day Moving Average is 260 Handles lower at a price of 5374 while the 200 Day MA comes in at 4924 this morning. Three of the seven ‘’Magnificent Seven’’ stocks that account for 39% of the S&P’s year to date gains are flashing warning signs. Amazon, Netflix and Nvidia have all rallied with strong negative divergences. The exception to this is Apple whose stock continues to make new highs. It is my opinion that these seven stocks which led the market higher over the past two years will do the same on the way down. I am still short the S&P at an average rate of 5550. I will now lower my next sell level to 5662 with the same 5705 ‘’Closing Stop’’. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
EUR/USD
The Euro traded in a narrow range, and I am still flat. The Euro has strong resistance from 1.0980/1.1060 where I will be an aggressive seller with a 1.1115 ‘’Closing Stop’’. Meanwhile, I will continue to be a buyer on any dip lower to 1.0770/1.0840 with the same 1.0695 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 1.0920. If I am taken long, I will have a T/P level at 1.0890.
Dollar Index
The Dollar never came close to yesterday’s buy range and I am still flat. The Dollar has support from 102.50/103.30 where I will continue to be a buyer with the same 101.85 ‘’Closing Stop’’. I no longer want to be short the Dollar at this time.
Cash DAX
The DAX traded heavy all-day yesterday with the market trading over 100 points lower from where I marked prices 24 hours ago. I will now lower my sell level to 18750/18850 with a lower 18955 wider ‘’Closing Stop’’. I still do not want to be long the market at this time. If I am taken short, I will have a T/P level at 18680.
Cash FTSE
Just as I posted yesterday morning the FTSE traded lower to my 8190-buy level before rallying to my 8240 T/P level. Overnight, the FTSE traded lower to my next buy level at 8150 as emailed to my Platinum Members. I am still long and I will add to this position at 8090. I will have a T/P level at 8200 on this position while my ‘’Closing Stop’’ will be at a price of 8035. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
The Dow made a new intra-day high at 40350 before having a small sell-off into the close. I am still flat as thankfully we have not been short this market over the past few weeks. The Dow is getting close to being severely overbought. However, as I am short the S&P, I will not be a seller of the Dow at this time. I will now raise my Dow buy level to 39700/39950 with a higher 39555 ‘’Closing Stop’’.
Cash NASDAQ 100
I am still flat the NDX as the market again fell shy of yesterday’s sell range. I will now lower my sell level to 20580/20730 with a lower 20855 ‘’Closing Stop’’. The NDX has support from 20080/20230 where I will be a small buyer with a 19985 ‘’Closing Stop’’.
September BUND
No Change: The Bund continues to build value above the 130.50 key support level. I am still flat. I will now raise my buy level to 130/60/131.30 while leaving my 129.65 ‘’Closing Stop’’ unchanged.
Gold Rolling Contract
Gold continues to build value above 2400 and I am still flat. I will now raise my buy level to 2373/2388 with a higher 2359 ‘’Closing Stop’’.
Silver Rolling Contract
Silver just missed yesterday’s buy range before having a late rally into the New York close. I will now raise my buy level slightly to 29.70/30.50 with the same 28.25 ‘’Closing Stop’’. If triggered, I will have a T/P level at 31.25
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