Markets have started the week in tentative mood reflecting some concerns on the outlook. US Equity markets closed lower with energy stock leading the decline, weighed down by the pullback in oil prices as scepticism appears to be rising on OPEC’s ability to limit supply. The softer tone in equities attracted some demand for US Treasuries while the US Dollar is softer across the board with mixed US Economic data releases seemingly also a contributing factor.
To mark my 1200th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2750 for my Platinum Service which includes 1/4 updated emails throughout the trading day. This offer is open to both new and existing members and if anyone is interested please email me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 66 points yesterday and is now ahead by 785 points for October having made 1142 points in September. The previous three months saw gains of 1782, 1682 and 2550 points respectively. Since I started this Platinum Service in June 2015 it has averaged a monthly gain of over 1900 points.
WTI and Brent both closed down by $1 following news that Libyan output expanded last week by 560K barrels a day from 540K previously. Meanwhile Iran repeated its intention to boost production and Nigeria’s Oil Minister said that the African nation was aiming to increase its output by 400K barrels a day to 2.2m. OPEC’s task to restricting oil output appears to be getting harder every day. Adding salt to the wound, a US report showed rigs targeting crude in the US rose for a seventh week to the highest level since February.
Speaking in New York, Fed Vice Chair Stanley Fischer said that Government policies could help partly counter the impact of lower productivity and an aging population which is weighing on the US economy and keeping interest rates low. Fischer argued that a combination of ‘’more encouragement for private investment, improved public infrastructure, better education, and more effective regulation is likely to promote faster growth of productivity and living standards’’.
US Industrial Production rose 0.1% in September matching consensus. The IP data has been volatile recently, but the trend suggests manufacturing productivity is now just above flat and the drop in mining appears to have ended. On the disappointing size, the October Empire State Index fell to -0.68 from -2.0 against expectations of a rebound to +1.
Looking at currencies, the US Dollar is softer against most currencies. The NZD is top of the G10 Leader Board, up 0.65% followed by the NOK up 0.45% and the Yen +0.31%. Meanwhile Sterling closed unchanged closing in New York at 1.2200. Bank of England Deputy Governor Broadbent said that Sterling’s slump since the UK vote to leave the European Union will help the economy overcome shocks from the decision.
Looking at other commodities, Iron Ore climbed another 1.9% to end the day at $58.4, while Gold closed 0.3% higher at $1255.
This morning on the economic front we have the ECB Bank Lending Survey at 9.00 am. At 9.30 am we have UK CPI, PPI, and the House Price Index. This is followed at 1.30 pm by US CPI and the NAHB Housing Market Index. Finally just before the close at 9.00 pm we have the US Total Net TIC Flows.
December S&P 500
My S&P plan worked well yesterday as just as I posted the S&P was trading at my 2117 buy level before having a nice rally shortly after the European Markets opened which enabled me to cover this position at my 2122 T/P level. As I had posted overnight and by the time you got to read my Daily Commentary most of you would still have had a buy level from last Friday at my 2119 buy level or lower before either way the market rallied. I am assuming that given the level of support at the 2114/2119 level that most members would have taken at least a 5 Handle gain given the fact that the market subsequently rallied to a 2130 high print before selling off again on the awful Empire data release. There is no doubt the Fed are doing everything they can to prevent the S&P from taking out last Thursday’s low print at 2107.75 as a break and close below here could see an acceleration lower. I am still flat the market and today my only interest in buying the market is still on a further dip lower to 2112/2119 with a wider 2106 stop. Remember to keep any eye on the McClellan Oscillator which closed last night with a negative 160 reading. Remember over the coming sessions I am looking for a bottom that will stick especially if the MO can print below -250. Given how oversold the S&P is trading I do not want to chase the market lower from here despite the fact that all my technical signals are on a ‘’Sell’’.
EUR/USD
My long 1.0965 Euro position worked well yesterday as thankfully by the time you got to read my commentary the Euro was trading at 1.0971 before having a nice rally back over 1.10 which enabled me to cover this position at my 1.0995 T/P level and I am now flat. As I mentioned yesterday, the Euro is oversold, under-loved and due a decent bounce as sentiment is so bearish towards the single currency. Today I will again look to buy the market on any dip lower to 1.0940/1.0980 with a 1.0910 stop. Naturally I do not want to be short the Euro at this time.
December Dollar Index
Unfortunately just as I posted early yesterday morning I was stopped out of my short 97.50 Dollar position near the high of the day at 98.10 and I am now flat. Given the fact that the Dollar is so overbought I will again look to sell the Dollar on any rally higher to 97.90/98.30 with a 98.65 stop.
December DAX
The DAX has traded in just a six hundred point range for the last eleven weeks. I am still flat the market and today I will again leave my buy level unchanged at 10310/10370 with the same 10260 stop. Again if the DAX dips to my buy level I will only be a small buyer in this area.
December FTSE
My FTSE plan worked well with the FTSE trading lower to my average buy level at 6920 before having a small rally to 6958. Despite the weaker Sterling the FTSE has under-performed over the past few trading sessions and for this reason I emailed my Platinum Members to exit this position at my revised 6935 T/P level and I am now flat. On top of this the FTSE had a weak close. Given how quickly the FTSE moved higher over the previous two weeks the support for this market does not come in until 6830/6860. I will be a strong buyer in this area with a 6795 stop. Despite the negative price action I do not want to be short the market at this time.
Dow Rolling Contract
There is no doubt the more tests that the Dow has of the 17950/18000 major support level, that it is only a matter of time before we break through this level. Despite the weaker Dow over the past few weeks the Daily Sentiment Reading Index is neutral at 43%, implying that there is plenty of room on the downside. This is why we need to keep a close eye on the Daily Bollinger Band, Williams Index and of course the McClellan Oscillator. If the 17950/18020 support level is broken the next key level is from 17820/17890 and I will be a strong buyer in this area on any test with a 17770 stop. I will also still be a buyer in in the first support zone with a 17910 stop.
December BUND
My Bund plan also worked well with the market hitting my 162.95 average buy level with a 162.81 low print. Subsequently the market rallied hard which enabled me to cover this position at my revised 163.26 T/P level and I am still flat. My own view is that the Bund put in a nice bottom yesterday which was also a test of the September spike low at 162.60 Today I will again look to buy the Bund from 163.00/163.40 with a 162.55 stop.
Gold Rolling Contract
Gold remains at or very near the end of the decline at the $1375 level from July 6. I am still flat the market and today I will raise my buy level slightly to 1244/1251 with a 1237 stop.
Silver Rolling Contract
No change as I am still long at 17.85 with the same 16.95 wider stop.
Following the success of the NFP Live Trading Day and Education Session in London on September 2, Paul Wallace and I are bringing this event to Dublin for the December NFP day on Friday December 2nd. If anyone is interested in attending this event the details are on the following link:
https://www.eventbrite.com/e/live-nfp-trading-day-dublin-tickets-28159689389
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