U.S. Indices were predominantly bid on Monday, with upside led by the NASDAQ thanks to gains in the heavyweight tech stocks, while the equal-weighted S&P (RSP) and Russell underperformed. Sectors were more mixed, with strong outperformance in communication and consumer discretionary names, while energy and health care lagged. T-notes were bid across the curve with the curve bull flattening with the lower yields weighing on the Dollar but in turn supporting Gold and the Japanese Yen. The Yen was also buoyed after the Upper-House elections in Japan, which avoided the politically worst-case scenario with PM Ishiba committed to his role in the now minority government. Crude prices settled lower with focus turning to E3 talks on Friday between Iran, France, Germany and the UK, as well as a Russia-Ukraine meeting on Wednesday. On trade, Reuters suggested the EU is to ramp up retaliation plans as US tariff deal prospects dim. Meanwhile, Treasury Secretary Bessent said the EU has become more engaged, noting it does not have to get ugly. Separately, Canada is meeting with US Senators this week, and the US will also be in talks with Taiwan. Regarding India, reports suggested the Indian trade team has returned to India, and a deal with the US is likely by September or October. Focus this week lies on ongoing trade updates, Flash S&P Global PMI data, Treasury supply (20yr and 10yr TIPS) and a flurry of US earnings. Elsewhere, Oil closed lower by 0.5% on Monday while a weaker Dollar saw Gold end the day with a gain of 1.44%.
To mark my 3225th 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 270 points yesterday and is now ahead by 2885 points for July 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 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 0.14% higher at a price of 6305.
The Dow Jones Industrial Average closed 19 points lower for a 0.04% loss at a price of 44,323.
The NASDAQ 100 closed 0.5% higher at a price of 23,180.
The Stoxx Europe 600 Index closed 0.12% lower.
This Morning, the MSCI Asia Pacific closed 0.3% higher.
This Morning, the Nikkei closed 0.29% lower at a price of 39,705.
Currencies
The Bloomberg Dollar Spot Index closed 0.62% lower.
The Euro closed 0.53% higher at $1.1687.
The British Pound closed 0.51% higher at $1.3483.
The Japanese Yen rose 1.02% closing at $147.28.
Bonds
U.K.’s 10-Year Gilt closed 7 basis points lower at 4.61%.
Germany’s 10-Year Bund Yield closed 7 basis points lower at 2.61%
U.S.10 Year Treasury closed 7 basis points lower at 4.35%.
Commodities
West Texas Intermediate crude closed 0.46% lower at $67.03 a barrel.
Gold closed 1.44% higher at $3398.10 an ounce.
This morning on the Economic Front we have the ECB Bank Lending Survey at 9.00 am. Next, we have U.S. Richmond Fed Manufacturing Index at 3.00 pm. Finally, we have a speech from Fed Chair Powell at 2.20 pm and Fed Member Bowman at 6.00pm.
Cash S&P 500
The election in Japan resulted in a minority party gaining control of both the lower and upper houses, leaving the fate of Prime Minister Ishiba uncertain. If you were wondering why Japanese rates were flat on Monday, it was because markets were closed for Marine Day. The Yen was stronger yesterday, although it is unclear whether this was due to positioning around the election or the closing out of hedges. Today’s trading should provide a better insight into potential impacts on the long end of the yield curve. It could turn out to be a non-event, but based on price action and reports before the election, there seemed to be heightened anxiety around the vote, similar to events seen in France last summer and perhaps Germany this year. Those effects mainly appeared in bond spreads, particularly with both countries’ 10-year rates trading at their tightest relative to Italian bonds in quite some time. Additionally, supporting the case for higher long-term rates, 1- and 2-year CPI swaps rose again yesterday, likely driven by rising copper prices. It is hard to see how rates don’t start climbing. Essentially, we are at a point where volatility and correlations have very little room to move, given that the big earnings start on Wednesday and realised volatility is low. The market has been pushed almost to the maximum, and while I can’t say with certainty that it can’t go higher, the returns should continue to decrease. It was interesting that despite the S&P closing higher on Monday the VIX ended the session with a gain of 1.5%. History tells us that when both the S&P, NDX and VIX are all rising that the market is close to a move lower. My S&P plan worked well yesterday as the market traded the whole of my sell range for a 6328 average short position before selling off to my revised 6305 T/P level just before the close and I am now flat. Today, I will again be a seller of the S&P from 6313/6333 with the same 6351 ‘Closing Stop’. If I am taken short, I will have a T/P level at 6292. The Risk/Reward does not justify a long position at this time.
EUR/USD
I am still short the Euro from last week at a price of 1.1670. I will add to this position on any further move higher to 1.1750 while leaving my 1.1805 ‘Closing Stop’ unchanged. I will now raise my T/P level to 1.1620. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
The weakness of the Dollar on Monday saw the market hit my buy range for a now 98.00 long position. I will continue to look to add to this position at 97.30 while leaving my 96.75 ‘Closing Stop’ unchanged. I will now lower my T/P level to 98.70. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
The Russell never came close to Monday’s buy range and I am still flat. I will now raise my buy level to 2120/2190 with a higher 2075 ‘Closing Stop’. If I am taken long, I will have a T/P level at 2240.
FTSE 100
I am still short the FTSE from last Wednesday at a price of 8970. The FTSE continues to trade in narrow ranges close to its all-time high. Today, I will look to add to this position at 9050 while leaving my 9125 ‘Closing Stop’ unchanged. I will now raise my T/P level to 8930. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
No Change: I am still flat. The Dow has short-term resistance from 44630/44880 where I will again be a seller with the same 45105 ‘Closing Stop’. If I am taken short, I will have a T/P level at 44410. The Dow has short-term support from 43650/43900 where I will continue to be a strong buyer with the same 43495 ‘Closing Stop’. If I am taken long, I will have a T/P level at 44180.
Cash NASDAQ 100
The NDX was the strongest of the American Indexes on Monday. This move higher saw the market hit my sell range for a now 23200 short position. I will add to this trade on any further move higher to 23350 while leaving my 23455 ‘Closing Stop’ unchanged. I will now raise my T/P level to 23060. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
I am still flat as the Bund as the market rallied 40 points from where I marked prices yesterday morning. I am reluctant to chase the Bund higher given how low Bund Yields are at 2.61%. Therefore, I will continue to be a buyer from 128.70/129.50 with the same 127.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 130.15.
Gold Rolling Contract
Gold closed higher by 1.5% yesterday and I am still flat as the market continues to give no opportunity for a buy the dip sell-off. Gold is now overbought. Gold has short-term resistance from 3450/3470 where I will be a seller with a 3491 ‘Closing Stop’. Meanwhile, I will continue to be a buyer on any dip lower to 3295/3315 with the same 3279 ‘Closing Stop’. If I am taken short, I will have a T/P level at 3428. If I am taken long, I will have a T/P level at 3334.
Silver Rolling Contract
Silver finally rallied to my 38.60 T/P level on my latest 38.20 long position and I am now flat. Today, I will again be a buyer on any dip lower to 37.20/38.00 with the same 35.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 38.70.
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