U.S. Indexes closed at new all-time highs, buoyed by the risk-on sentiment to start the week amid reports that the U.S. and China agreed on a framework for a trade deal ahead of the Trump/Xi meeting later this week. As a result, spot Gold was sold and fell beneath USD 3900/oz, while the crude complex was initially bid, albeit later sold off to settle in the red. In FX, the Dollar was more or less flat with the Australian Dollar, the clear outperformer and havens lagging on the aforementioned trade updates. The Canadian Dollar was flat, with USD/CAD trading within a narrow range despite Trump imposing an additional 10% tariff amid the latest anti-tariff advert. T-Notes flattened in risk-on trade and front-loaded supply, with mixed 2- and 5-year auctions today, ahead of the 7-year on Tuesday, before the FOMC on Wednesday. While newsflow was light to start the week, it quickly ramps up with Fed, BoJ, ECB, and the Bank of Canada all this week, the Trump/Xi meeting, and 5 of the Mag-7 are reporting earnings. Sectors were predominantly green with Communications leading the gains, followed by Tech and Discretionary, while Consumer Staples and Materials were the only sectors in the red. The stock-specific highlight was arguably Qualcomm (QCOM), which surged after announcing the launch of Qualcomm AI200 and AI250 chip-based accelerator cards and racks for data centres. Headline CPI rose 0.3% M/M in September, cooler than the 0.4% expected and prior, with the Y/Y rising 3.0%, up from the prior 2.9% but below the 3.1% forecast. Core measures rose 0.2% (expected. 0.3%, previous 0.3%), with the Y/Y with the Y/Y rising 3.0%, beneath the 3.1% forecast and prior. The report will be welcome but likely changes little for the Fed, with inflation still above target at 3.0%. However, given that there was no acceleration M/M, it shows inflationary pressures remain contained. Expectations at the Fed are building that tariffs will not result in persistent inflation, but price pressures are expected to remain into 2026, before cooling in H2 ’26 and returning to target in 2027 – providing the situation stays similar to the current picture. ING summarises the data as giving the green light to rate cuts. The desk notes that softer than expected, with tariff effects remaining limited. Says that should gradually change, but gives more time for disinflationary forces such as energy, housing and softer wages to mitigate the tariff impact. “In any case, the Fed’s more pressing concern is the cooling jobs market as it looks to optimise policy for its dual mandate”. Elsewhere, Oil closed lower by 0.31% while Gold smashed, ending Monday’s session with a near 3% fall.
To mark my 3275th 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 was lost 240 points yesterday and is now ahead by 3957 points for October after closing September with a gain of 3774 points after ending August with a gain of 3362 points after closing July with a gain of 3753 points 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 1.23% higher at a price of 6875.
The Dow Jones Industrial Average closed 337 points higher for a 0.71% gain at a price of 47,544.
The NASDAQ 100 closed 1.83% higher at a price of 25,821.
The Stoxx Europe 600 Index closed 0.21% higher.
Yesterday, the MSCI Asia Pacific closed 0.6% higher.
Yesterday, the Nikkei closed 2.46% higher at a price of 50,512.
Currencies
The Bloomberg Dollar Spot Index closed 0.14% lower.
The Euro closed 0.18% higher at $1.1648.
The British Pound closed 0.17% higher at $1.3336.
The Japanese Yen fell 0.31% closing at $152.85
Bonds
U.K.’s 10-Year Gilt closed 1 basis points lower at 4.41%.
Germany’s 10-Year Bund Yield closed 5 basis points higher at 2.61%
U.S.10 Year Treasury closed 4 basis points higher at 3.99%.
Commodities
West Texas Intermediate crude closed 0.31% lower at $61.31 a barrel.
Gold closed 2.76% lower at $3998.10 an ounce.
This morning on the Economic Front we have German GFK Consumer Survey at 7.00 am, followed by the ECB Bank Lending Survey at 10.00 am. Next, we have U.S. House Price Index at 1.00 pm and New Home Sales at 2.00 pm. Finally, we have the Richmond Fed Manufacturing Index at 2.00 pm and the Dallas Fed Manufacturing Index at 2.30 pm while we have a Seven – Year Treasury Auction at 5.00 pm.
Cash S&P 500
This coming week will feature earnings from five of the mega caps — Apple, Microsoft, Alphabet, Meta, and Amazon — along with three major central bank meetings: the Fed, ECB, and BOJ. But while all eyes will be on these events, the Treasury will be draining another $100 billion in liquidity from the market in the background. Today, $26.0 billion is scheduled to settle, followed by $25.1 billion on October 30 and $58.3 billion on October 31. Settlements in recent weeks have led to greater strain in the funding markets and increased usage of the Fed’s overnight standing repo facility. It is also month-end, and with the added liquidity drain, overnight rates are likely to rise, tightening available market liquidity even further. Determining the potential impact on risk asset prices from the ebb and flow of liquidity is no easy task. However, when more volume passes through the repo market in the form of Treasuries, repo activity in equities tends to decline. We also know that equity repo financing tends to be bullish for stocks when it rises and bearish when they fall. Therefore, if higher rates and Treasury settlements increase volumes in the overnight markets for Treasury securities, we should expect weaker equity prices. Liquidity in the market has fallen sharply since July, and funding conditions have tightened. Meanwhile, the dispersion trade that has helped support the market since September is coming to an end and is likely to unwind, while realised volatility is rising. The only question that remains is whether all of this will finally lead to the market decline I have been expecting. We have now had three consecutive Mondays when the VIX 1-Day fell from its Friday high, leading to an S&P 500 rally of about 1%. The prior two Mondays not only saw rallies but also gave those gains back in the days that followed. However, yesterday the VIX 1-Day closed below 9, suggesting that today’s expected volatility won’t be able to lift stock prices. Right now, the stock market is in the final days of the dispersion trade ahead of results on Wednesday and Thursday. The Dispersion Index actually rose by nearly 5% on Monday, reaching the same level it was at before the October 10 sell-off. The Dispersion Index minus the 3-month Implied Correlation Index also rose back to its highs. That spread has now returned to levels last seen in July 2024 and January 2025, with the previous peak occurring in July 2023. I do not know what the future holds, but each of those prior periods was followed by a sizable pullback. On Thursday, the S&P traded lower to my revised 6708 T/P level on my latest 6719 short position. Unfortunately, I went short the S&P again on Friday at 6763 before getting stopped out of this position on Friday evening at 6791. Monday’s aggressive ramp higher saw me attempt a new sell level and I am now short at an average rate of 6865 with a tight ‘Closing Stop’. Given how extended this market is I will use any further strength to put on a macro short position. This is something that I have not done in a long time. I will have a T/P level at 6840 on my existing position. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
EUR/USD
I am still flat as the Euro traded in a narrow range over the past three trading sessions. As I am still long the Dollar, I will now raise my Euro sell level to 1.1690/1.1760 with a higher 1.1815 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1630
Dollar Index
No Change: I am still long the Dollar at 98.70 with a now lower 99.10 T/P level. I will continue to look to add to this position at 98.00 while leaving my 97.25 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members
Russell 2000
The Russell traded the whole of my sell range for a now 2520 average short position. I will leave my 2605 ‘Closing Stop’ unchanged while raising my T/P level to 2480. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
Wrong! After the FTSE hit my second sell level at 9580 for a 9545 average short position I was quickly stopped out of this trade at 9615 and I am still flat. The FTSE is so overbought, trading outside its Daily Bollinger Bank on a massive negative divergence. As I just cannot be a buyer of the FTSE against this backdrop. I have said this consistently for the past few weeks yet despite the awful political and economic scenario in the UK, the FTSE keeps making new highs. Yes, this will all fall apart the problem like everything else is the WHEN. The FTSE has further resistance from 9690/9760 where I will again be a seller with a 9825 tight ‘Closing Stop’. If I am taken short, I will have a T/P level at 9605.
Dow Rolling Contract
I am still flat. Given the Daily chart I really want to be a seller but I have enough short exposure from the other markets and for this reason I will stay flat the Dow today. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
Thankfully we have had no sell level in the NASDAQ over the past two weeks as the vertical move higher has been staggering. This move higher saw the Market Cap to GDP close at a new record of 223% resulting in the NDX flying outside its Monthly Bollinger Band. After a vertical move higher for seven consecutive months how are new long positions a positive risk/reward from here. We have negative divergences on the Weekly chart which in the past has been a major warning signal for a significant move lower. We are in an environment with financial conditions easier than any other time in history with the Fed expected to cut rates tomorrow while Inflation is still stook at 3%. The U.S has hit $38 trillion of debt after the fastest accumulation of $1 trillion outside of the pandemic. I am still flat the NDX. The NDX has resistance from 25900/26100 where I will be a small seller with a 26225 ‘Closing Stop’. If I am taken short, I will have a T/P level at 25680.
December BUND
The Bund continues to trade in narrow ranges making it difficult to make points. Friday’s small sell-off saw the Bund hit my buy range for a now 130.00 long position. I will continue to look to add to this position at 129.30 while leaving my 128.55 ‘Closing Stop’ unchanged. I will now lower my T/P level to 130.55. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold prices fell by a further 2.7% yesterday and I am still flat. Given the losses incurred in Gold these past few weeks I am going to stay flat Gold until I get a better edge in the market. Gold volatility continues to decline—and so does Gold’s price. This really just reinforces how speculative the move in Gold was in many ways. What is interesting is that Gold volatility and the average volatility of S&P 500 stocks seem to move in lockstep. It is quite possible that, in the end, Gold and stocks are the same trade, and what we are seeing in Gold may soon come to a stock market near us. Who knows, maybe even this week. Meanwhile, if Gold breaks below $3900 I will be back with an update for my Platinum Members.
Silver Rolling Contract
I am still long at an average rate of 49.20 with the same 47.15 ‘Closing Stop’. I will also leave my 49.80 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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