Oil continues to be the main driver for both Currency and Equity markets with Oil trading nearly 10% lower than the highs made 24 hours ago. This sell-off in Oil saw the Dow and S&P fall 1.3% and 1.56% respectively while the lower Oil price sees the Canadian Dollar weaker after its nice rebound over the previous three trading sessions when the Bank of Canada left Interest Rates unchanged. One of the main reasons for the lower Oil price came after Saudi Arabia said they will maintain spending at current levels. Markets are opening lower this morning after the Shanghai lost a sizeable 6.4% to close at 2750 while the Nikkei got hit this morning closing down 2.4% at 16700 and back below the key 16900 pivot level.
To mark my 1000th issue of tradernoble Daily Market Commentary I am offering a special 2 year rate of Euro 2500 for my Platinum Service which includes all my Premium Daily Commentaries and 1/5 updated emails throughout the trading session. This offer is open to both existing and new members and if anyone is interested please email on bryan@tradernoble.com for details.
For any body following my new Platinum Service it lost 30 points yesterday but is still ahead by 2995 points for January. Since I started this Platinum Service last June it has generated a return of over 17,500 points.
In Currencies the Dollar is a lot weaker which is benefiting both the Euro and Japanese Yen driven by the lower Oil price which is currently trading at 29.40 from its high of 32.70 early yesterday morning. Kuwait’s OPEC Governor has been speaking in the last few minutes where is look for co-operation from the non OPEC Countries to ease production saying that OPEC cannot cut production alone while other Countries are increasing supply namely Russia and America.
In other news the Bank of England’s Forbes was speaking in London yesterday. He said the BoE needs to see stronger Labour Costs before the Bank will consider a hike in Interest Rates.
On the data front the Dallas Fed Manufacturing Index was released yesterday printing -34.6 versus -14 and this was the worse number in over six years thus giving more ammunition to the fact that the Manufacturing Sector is now in recession. Both the US Dollar and Equity markets got hit hard on this release.
This morning we have no economic data of note from the UK or the Euro-Zone. At 10.45 am the Bank of England Governor Carney will speak. At 2.00 pm we have the US House Price Index. This is followed at 3.00 pm by the Richmond Fed Index and CB Consumer Confidence. Finally at 3.30 pm we have the Dallas Fed Services Index.
March S&P 500
My S&P plan did not work out yesterday as the huge ‘Open Gap’ left from last Thursday/Friday was too big not to get filled with the S&P after trading lower to my 1876 buy level before stopping me out at 1868 near the close and I am still flat. The S&P has continued to sell-off this morning following the 6.4% move lower in the Shanghai but given the fact that we have the FOMC Meeting tomorrow and the fact that the S&P has finally closed this large ‘Gap’ I would not chase this market lower from here. If you listen to the main Business TV stations they are all saying that last Wednesday’s 1804 low print was the low for the year and that everyone should buy stocks now. I do not believe this for one minute especially as so much technical damage was done to the market since the US markets started to sell-off aggressively on December 30th. There is no doubt the US is in or about to enter recession and yesterday’s Dallas Fed’s Manufacturing Index did not help the bullish growth scenario. This morning the S&P traded lower to my 1854 buy level. I am still long and I will leave a 1847 stop on this position. Again if I am subsequently stopped out of this position I will use my 5 Handle Rule to go long again with a stop below whatever new low is printed. Given the fact that we have the Fed Meeting tomorrow I do not want to be short the market at this time.
EUR/USD
Unfortunately the Euro just missed my 1.0770 buy level over the past two trading sessions and I am still flat. Today I will raise my buy level to 1.0780.1.0820 with a 1.0755 stop. I still do not want to be short the Euro at this time.
March Dollar Index.
I am still flat the Dollar which continues to trade in a narrow range. Today I will lower my sell level to 99.70/100.00 with a 100.30 stop.
March DAX
Thankfully I had no buy level in the DAX yesterday with the market trading over 250 points lower form yesterday’s high print and I am still flat. The DAX has reasonable support at 9520 while the main support is at the 9250/9300 in which a break and close below the latter will be very bearish. The weaker Dollar is also not helping the DAX. Today I will look to buy the DAX on any further dip lower to 9480/9530 with a 9440 stop.
March FTSE
My FTSE plan worked well yesterday as after the FTSE traded lower to my 5800 buy level we had a nice rally to 5848 which enabled me to T/P on this position at my 5825 level as outlined to my Platinum Members and I am now flat. The FTSE continues to lead the major Indices lower but with the FOMC Meeting tomorrow I do not want to chase this market lower and today I will look to buy the FTSE again from 5680/5710 with a 5640 stop.
Dow Rolling Contract
The Dow got hit hard over the previous 24 hours with the market now trading nearly 400 points lower from its 16138 high print. However with the Dow leaving a huge potential Gap from last night’s New York close I would not chase this market lower from here as you have to fancy a tradeable rally from here especially with the Fed Meeting tomorrow. For these reasons I will look to buy the Dow from 15640/15710 with a 15580 stop.
March BUND
The weaker equity markets sees the BUND again trade higher with the market hitting my 161.95 sell level this morning. I am still short and I will leave my stop unchanged at 162.30.
Gold Rolling Contract
Gold has finally broken the key 1080/1100 resistance level and for this reason I will raise my buy level to 1095/1103 with a 1089 tight stop.
Silver Rolling Contract
Finally after holding my long 14.19 Silver position for over two weeks I have been able to T/P on this position overnight at 14.40. However with Gold breaking higher I have decided to buy Silver again at 14.30 with a 13.75 stop.
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