U.S. Equity Markets closed mixed on Monday with Tech weakness seeing the NASDAQ 100 close red but the majority of sectors were green with notable outperformance in Financials and Energy. Tech weakness was led by downside in Apple (AAPL) on lower-than-expected pre-order sale analysis. Treasuries ultimately bull flattened in response to a stronger New York Fed Manufacturing Survey reversing the earlier steepening induced by former NY Fed President Dudley who reiterated calls for 50bps, adding “i think they will” when talking about the Fed’s upcoming rate decision on Thursday. Money markets now price in a c. 60% probability of a 50bp rate cut on Wednesday vs the 48% probability seen on Friday. The only US data was the NY Fed Manufacturing Survey, which saw a strong beat led by New Orders and Shipments, while prices paid saw little change and employment saw a marginal improvement but remained in contractionary territory. In FX, The Dollar was weak on the dovish pricing while cyclical currencies benefitted, apart from the Canadian Dollar which was weighed on by dovish Governor Macklem comments to the FT that the Bank of Canada could shift cuts to 50bp magnitude should growth disappoint. Crude prices were bid with geopolitical tensions remaining despite downbeat China activity data over the weekend while geopolitical tensions remain heightened into the first anniversary of the Israel-Hamas conflict, with some suggesting Yemeni Houthis could increase their activities. NY Fed Manufacturing for September was much better than expected as the headline printed +11.5 (prev. -4.7, exp. -4.75), outside the upper bound of the forecast range, -0.6. Looking at the breakdown, new orders jumped to +9.4 from -7.9, prices paid were more-or-less unchanged at 23.2 (prev. 23.4), with employment coming in at -5.7 (prev. -6.7). Shipments and unfilled orders soared to 17.9 (prev. +0.3) and 2.1 (prev. -7.4), respectively. Expectations for six-months ahead also improved to 30.6 from 22.9, as did expectations for new orders and shipments. On the inflationary footing, prices paid rose while expectations for prices received marginally dipped. Overall, Richard Deitz, Economic Research Advisor at the New York Fed, said “NY State manufacturing activity in September grew for the first time in nearly a year, with shipments increasing strongly. However, employment continued to decline modestly. Firms grew more optimistic that conditions would improve in the months ahead, though capital spending plans were weak.” Elsewhere, Oil closed Monday with a 1.8% gain while Gold was flat as it consolidated last week’s impressive gains and is now ahead by 25% for the 2024.
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 made 100 points yesterday and is now ahead by 1713 points for September having ended August with a loss of 301 points 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 0.13% higher at a price of 5633.
The Dow Jones Industrial Average closed 228 points higher for a 0.55% gain at a price of 41,622.
The NASDAQ 100 closed 0.47% lower at a price of 19,423.
The Stoxx Europe 600 Index closed 0.16% lower.
This morning, the MSCI Asia Pacific closed 0.3% lower.
This morning, the Nikkei closed 1.03% lower at a price of 36,203.
Currencies
The Bloomberg Dollar Spot Index closed 0.37% lower.
The Euro closed 0.3% higher at $1.1121.
The British Pound closed 0.4% higher at 1.3200.
The Japanese Yen rose 0.1% closing at $140.65.
Bonds
Germany’s 10-year yield closed 3 basis points lower 2.12%.
Britain’s 10-year yield closed 1 basis points lower at 3.75%.
U.S.10 Year Treasury closed 4 basis points lower at 3.63%.
Commodities
West Texas Intermediate crude closed 1.8% higher at $70.04 a barrel.
Gold closed 0.1% higher at $2581 an ounce.
This morning on the Economic Front we have Euro-Zone and German ZEW Surveys’ at 10.00 am. This is followed by U.S Retail Sales and Canadian CPI at 1.30 pm. Next, we have Industrial Production and Capacity Utilisation at 2.15 pm. Finally, at 3.00 pm we have the NAHB Housing Market Index followed by a 20 -Year Treasury Auction at 6.00 pm.
Cash S&P 500
The S&P closed less than 1% from its August all-time high, having risen over 230 Handles since its low of 5403 on September 6. With the Dow making it latest all-time high early yesterday afternoon it seems only a matter of time that the S&P will follow suit despite the number of negative divergences. When the $NYSI reading is released later this morning it will show a maximum overbought trading signal. History tells us not to be a buyer of the S&P when the $NYSI is maximum overbought. However, these are not normal markets as the theme ‘’nothing matters’’ continues to help the U.S. Indexes to new highs. The S&P is now trading at a forward P/E of 21 which is not only historically very rich but dependent on a Wall Street consensus 15% earnings growth in 2025. Now the Fed will start cutting rates tomorrow concerned about the labour market and slowing growth but earnings growth is at 15% – ‘’nothing matters’’. Look, corporations can achieve a lot of efficiencies by cutting jobs, but slowing growth is slowing growth and 15% earnings growth is a tall order especially as we are coming out of a period where earnings growth to record earnings have largely been driven by inflation and vast savings from prior record stimulus. Well, both are gone now so the earnings growth has to come from somewhere else. There is no room for error from here. This market is absurdly expensive on a macro basis. It is no wonder that Warren Buffet keeps selling his holdings and has built a record cash position. Standard election year seasonality says any peak this week or month will make room for a larger corrective scenario which fits in with the technical corrective scenario above. However, it is still so difficult to be short. I am still flat the S&P. Ahead of the Fed Meeting, I will now raise my S&P sell level to 5647/5667 with a higher 5683 ‘’Closing Stop’’. I no longer want to be long the S&P at this time, preferring to wait for a correction first. If I am taken short, I will have a T/P level at 5631.
EUR/USD
The Euro closed above 1.11 last night and I am still flat. As the Euro is short-term overbought, I am reluctant to chase the market higher. Therefore, I will continue to be a buyer on any dip lower to 1.0960/1.1040 with the same 1.0895 ‘’Closing Stop’’. I still do not want to be short the Euro at this time.
Dollar Index
No Change. I am still long the Dollar from early Monday morning at a price of 100.80. I will continue to look to add to this position on any further move lower to 100.20 while leaving my 99.75 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 101.15. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
No Change: Thankfully we have had no sell level in the DAX as every dip is bought. Since Wednesday’s 18216 low print the DAX has surged 550 points as yet again anyone trying to short the DAX is run over. I will now raise my DAX buy level to 18330/18430 with an 18195 ‘’ Closing Stop’’ which is just below las week’s low print. If I am taken long, I will have a T/P level at 18505. I still do not want to be short the DAX at this time
Cash FTSE
The FTSE hit a low at 8250 shortly after I posted before rallying 50 points into the London close. I will now raise my FTSE buy level to 8180/8260 with a higher 8125 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 8310. I still do not want to be short the FTSE Market at this time. If this view changes I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Although the Dow made a new all-time intra-day high at 41733 early yesterday afternoon the market quickly fell 300 points from this high before trading sideways for most the session before having a late spike into the close. I am still short at a price of 41280 from Friday having emailed my Platinum Members to move any stop to a new ‘’Closing Price’’ of 41705. With the $BPINDU (Bullish Percent Index for the Dow) RSI closing at 81 last night I just cannot be a buyer with a reading this high as history tells us that this does not last. I will add to this short position on any further move higher to 41880. If this level is hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
My latest 19440 short NDX position worked well as the market sold off to my 19340 T/P level and I am n now flat. The NDX was heavy for all of Monday’s trading session on the back of the 3% fall in Apple shares. Given how overbought the NDX is trading coupled with the seasonality weakness associated with the last two weeks of September I am happy to continue with my strategy of selling rallies. The next short-term resistance level for the NDX is from 19600/19760. I will be a seller in this area with a higher 19905 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 19480. I still do not want to be long the NDX at this time.
December BUND
The boring sideways price action for the Bund shows no sign of ending. Yesterday’s small rally saw the Bund Yield close Monday at a yield of 2.12%. As I mentioned extensively in yesterday’s S&P commentary, I just cannot be a buyer of the Bund at these levels are there is no protection. Hopefully we get some clarity on Bond Yields at tomorrow’s FOMC Statement and Powell press conference. The Bund has resistance from 135.60/136.30 where I will be a small seller with the same 137.05 ‘’Closing Stop’’. Meanwhile, my only interest in buying the Bund is still on a move lower to 133.20/133.90 with the same 132.65 ‘’Closing Stop’’.
Gold Rolling Contract
Gold traded in a narrow range on Monday following Friday’s aggressive move higher to new all-time highs. It is very rare that I will attempt a short position in Gold but the market is so extended short-term I will use any further rally to 2610/2630 to be a small seller with a 2649 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 2588.
Silver Rolling Contract
Silver closed slightly lower on Monday, and I am still flat. Ahead of tomorrow’s FOMC Statement, I will now raise my Silver buy level to 29.40/30.20 while leaving my 27.95 wider ‘’Closing Stop’’ unchanged. If I am taken long, I will have a T/P level at 31.10.
Recent Comments