U.S. Equity Markets slipped, oil surged and investors sought out assets considered to be havens in times of trouble after a strike on Saudi Arabia’s crude production heightened geopolitical risk. Losses for automakers helped drag the S&P 500 Index down the most in almost two weeks, though the gauge came off its lows of the day in afternoon trading. Treasury Yields fell the most in three weeks. Brent oil posted a record intraday jump, adding as much as 19%, as news of the devastating strike on the world’s largest exporter also sent currencies of commodity-linked nations higher, including Canada’s Dollar. The developments in the Middle East are testing sentiment after a bullish start to the month for global equities and other riskier assets. President Donald Trump promised to help allies following the infrastructure attack after stating over the weekend that the U.S. is “locked and loaded.” Several administration officials said Sunday that they had substantial evidence that Iran was to blame, not the Iranian-backed Houthi rebels in Yemen who claimed responsibility. Boris Johnson skipped a planned press conference with his Luxembourgish counterpart Xavier Bettel, which was set up close to a noisy group of anti-Brexit protesters. In his absence, Bettel called Brexit a “nightmare” and said it was up to Johnson to find a way out of the impasse. Earlier, the U.K. Prime Minister met European Commission President Jean-Claude Juncker to discuss the divorce agreement. Johnson told the BBC a deal “will take some work,” while the EU said a breakthrough is no closer.
To mark my 1900th 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 made 30 points yesterday and is now ahead by 759 points for September, having made 2387 points in August, 1153 points in July, 1346 points in June,1722 points in May, 955 points in April and 1027 points in March. 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
Shares in Asia were mixed after China data missed estimates, with Hong Kong equities underperforming, while those in South Korea rose after a holiday. Japanese markets were closed.
The S&P 500 Index fell 0.3% to close at 2998.
The Dow Jones fell 147 points to close at 27,076.
The Stoxx Europe 600 Index fell the most in three weeks, closing 0.6% lower.
The MSCI Emerging Markets Index slipped 0.1%.
Currencies
Here is a summary of the main changes in F.X. Markets:
The Bloomberg Dollar Spot Index climbed 0.3%.
The Euro decreased 0.6% to $1.1006.
The British Pound sank 0.6% to $1.2427, after no signs of progress in Prime Minister Boris Johnson’s first face-to-face meeting on Brexit with European Commission President Jean-Claude Juncker
Canada’s Dollar rose 0.3% to $0.7549.
The Japanese Yen was little changed at 108.06 per dollar.
Bonds
The yield on 10-year Treasuries sank six basis points to 1.84%.
Germany’s 10-year yield fell three basis points to -0.48%.
Britain’s 10-year yield fell seven basis points to 0.69%.
Commodities
West Texas Intermediate crude jumped 13% to $61.73 a barrel, near a four-month high.
Silver added 2.6% to $17.89 an ounce.
Gold climbed 0.7% to $1,499.01 an ounce.
This morning on the Economic Front we have the German and Euro-Zone ZEW Survey at 10.00 am. This is followed by U.S. Industrial Production and Capacity Utilisation at 2.15 pm. Finally, at 3.00 pm we have the NAHB Housing Market Index at 3.00 pm.
September S&P 500
The S&P just missed my 2978 buy level with a 2982.50 low print before spending the rest of the session trading in a narrow range, closing at 2998. It is no surprise that we traded with little volatility as the market waits for the FOMC Rate decision tomorrow at 7.00 pm, followed by Fed Chair Powell’s press conference. Adding to the mix is the Quadruple Expiration for the September Futures and Options Contracts on Friday. I will now raise my buy level in the S&P to 2975/2985 with a higher 2967 stop. If I am taken long and subsequently stopped out of this position I will be a more aggressive buyer from 2951/2961 with a 2944 stop. Ahead of the FOMC tomorrow I still do not want to be short the S&P at this time.
EUR/USD
Much to my surprise the Euro fell yesterday with the market trading the whole of my buy range for a now average long position of 1.1020. If the Euro can hold last Thursday’s post ECB Meeting low of 1.0927 then the Key Day Reversal from that session will still be valid. Today I will lower my T/P level on this position to 1.1035 with the same 1.0965 stop. If any of the above levels are hit I will be back with a new update for my Platinum Members.
December Dollar Index
As I am long the Euro I will now raise my sell level in the Dollar to 98.55/98.95 with a higher 99.30 tight stop.
September DAX
No Change as my only interest in buying the DAX is on a further dip lower to 12200/12280 with the same 12145 tight stop. I still do not want to be short the DAX at this time.
September FTSE
The FTSE traded in a narrow range yesterday and I am still flat. This morning the Pound is trading lower on the worsening political situation in the UK. Despite the weaker Sterling I will now lower my buy level to 7210/7250 with a lower 7170 stop.
Dow Rolling Contract
The Dow broke its consecutive higher-closing streak yesterday, declining by 0.5%. Yesterday’s open occurred with a lower gap, creating a potential Island Reversal Pattern. I am still flat the Dow and despite the small sell-off yesterday I still expect to see new highs in the market. Not surprisingly Defence Stocks were the strongest component. The Dow Jones US Defense Index closed above its early 2018 high to establish a new record. Today I will raise my buy level to 26800/26950 with a higher 26705 stop. If I am taken long and subsequently stopped out of this position I will be a more aggressive buyer from 26450/26600 with a 26380 stop. Just like the S&P above I still do not want to be short the Dow at this time.
September NASDAQ
My long 7825 NASDAQ position worked well with the market trading higher to my 7855 T/P level and I am now flat. The NASDAQ has strong support from 7750/7800 and I will be a buyer on any dip to this area with a 7705 stop.
December BUND
I am still flat the Bund and I will now raise my buy level to 172.10/172.50 with a higher 171.70 stop.
Gold Rolling Contract
Despite the worsening geopolitical situation Gold is selling off this morning as I go to press. I am still flat and I will now lower my buy level to 1468/1478 with a 1461 stop.
Silver Rolling Contract
No Change as I am still a buyer on any further dip lower to 17.05/17.45 with the same 16.80 tight stop.
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