U.S. Indices closed mixed on Monday with markets chopping to the US/EU trade announcement. The news of the deal, which includes a 15% tariff, was initially hailed by markets as a step in the right direction, but sentiment on the deal swiftly turned. European officials do not seem pleased with the deal, with German Chancellor Merz warning of the significant impact it will have on the German economy, while The New York Post reported that Macron was still displeased with the deal and has been calling for the implementation of the Anti-Coercion Instrument, even after the deal was agreed. Overall, the deal is being framed as a win for the US but a loss for the EU, keeping tensions high despite the deal. Elsewhere on trade, the third round of US/China talks resumed yesterday and are set to continue today, but negotiators made no remarks to the press in the wake of the meeting. In the US, sectors were mixed with Energy, Consumer Discretionary and Tech leading gains, helping keep the Nasdaq buoyed ahead of key tech earnings this week from AAPL, META, MSFT and AMZN. All other sectors were red, with notable weakness in Real Estate, Materials and Utilities. The energy upside was buoyed by firmer crude prices after President Trump announced he is going to reduce Russia’s 50-day deadline for peace with Ukraine to 10 or 12 days from today. Meanwhile, the OPEC+ JMMC made no policy recommendation at Monday’s meeting. T-Notes saw two-way trade with upside in the morning faded ahead of supply with the 2 Year auction strong but 5 Year soft, while the Treasury announced much higher borrowing estimates for the July-September quarter than previously touted. In FX, the Dollar outperformed while the Euro lagged in wake of the trade deal. There are still plenty of key risk events this week, including the aforementioned earnings, but also US/China talks on Tuesday, US GDP and Fed on Wednesday, PCE on Thursday, NFP on Friday, as well as the August 1st trade deadline (Fri). Elsewhere, Oil closed higher by 2.6% while a stronger Dollar saw Gold end Monday’s session with a loss of 0.66%.
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 238 points yesterday and is now ahead by 3643 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 0.02% higher at a price of 6389.
The Dow Jones Industrial Average closed 64 points lower for a 0.14% loss at a price of 44,837.
The NASDAQ 100 closed 0.36% higher at a price of 23,356.
The Stoxx Europe 600 Index closed 0.23% lower.
This Morning, the MSCI Asia Pacific closed 0.3% higher.
This Morning, the Nikkei closed 0.93% lower at a price of 40,615.
Currencies
The Bloomberg Dollar Spot Index closed 1.03% higher.
The Euro closed 1.29% lower at $1.1590.
The British Pound closed 0.67% lower at $1.3352.
The Japanese Yen fell 0.59% closing at $148.54.
Bonds
U.K.’s 10-Year Gilt closed 3 basis points higher at 4.66%.
Germany’s 10-Year Bund Yield closed 2 basis points lower at 2.69%
U.S.10 Year Treasury closed 4 basis points higher at 4.42%.
Commodities
West Texas Intermediate crude closed 2.59% higher at $66.85 a barrel.
Gold closed 0.66% lower at $3315.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Composite PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed by Euro-Zone PPI at 10.00 am. Next, we have U.S. Trade Balance at 1.30 pm and the Chicago PMI at 2.45 pm. Finally, we have ISM Non-Manufacturing PMI at 3.00 pm and the Atlanta Fed GDPNOW at 6.00 pm
Cash S&P 500
Nothing has been relevant so far as buyers have been willing to pay any price no matter how extended and uncorrected these moves higher in the S&P 500 have been over the past three months. Frankly all the chart constructs are screaming for a pullback. Valuations is not a timing tool as we have seen many times over the years but technical help us assess risk/reward and either way you look at it RSI’s in the high 70’s are simply not the time to establish new longs from my perspective and is one of the main reasons why I have been shorting these rallies over the past six weeks. Sunday’s tariff announcement with Europe is seen as a win for the U.S. and a submission for Europe, yet it is American importers paying 15% for most goods and 50% for aluminum and steel. Huge numbers are thrown out in terms of commitments, but no time frames are given. Any of course any deal has to pass not only the European Council but also individual Member States Parliaments so any deal could still fail or take many months to actually get signed and legally relevant stage. For now, it is all framework but markets do not care with the S&P back trading above 6400 this morning. Speaking of the Japan deal, the initial reaction on the marketing front caused a spike and now as reality is setting in a bit we are now seeing a reversal with the Nikkei trading 1400 points lower from where it was last Wednesday morning. What is the driver to the recent all-time highs? In my opinion it is ungodly amounts of liquidity drowning the system as global liquidity has again made a new all-time high and the S&P is simply following. The U.S tax cuts are helping with record buybacks which are due to come back again in August. As liquidity flows so do asset prices which has been the theme since the 2008 Global Financial Crisis. In the process the asset bubbles keep getting larger and larger. 209% Market Cap to GDP, Housing 115% of GDP and now $4 trillion+ in crypto valuations that is not even included in Market Cap to GDP. It does not matter as buyers keep piling in despite earnings yields on the floor at just 1.2%. I am still short the S&P at an average rate of 6334. I will continue to look to add to this position at 6425 with a lower 6447 ‘Closing Stop’. If my 6425 sell level is triggered, I will raise my T/P level to 6365. If my next sell level is not triggered and the S&P has a small sell-off I will exit my 6334 existing short position at 6355 and reassess. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
EUR/USD
It has taken patience but finally the Euro traded lower to my revised 1.1637 T/P level on my 1.1710 average short position and I am now flat. Given how overbought the Euro has become over the past few months there is every chance that a meaningful top was recorded in the Euro at 1.1840. The Euro has short-term resistance from 1.1670/1.1750 where I will again be a seller with a higher 1.1845 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1610.
Dollar Index
Monday’s long overdue rally in the Dollar saw the market hit my 98.10 T/P level on my 97.65 average long position and I am now flat. This morning, the Dollar is trading higher at a price of 98.70. We have short-term support from 97.30/98.10 where I will again be a buyer with the same 96.75 ‘Closing Stop’. If I am taken long, I will have a T/P level at 98.90. I still do not want to be short the Dollar at this time.
Russell 2000
I am still flat the Russell as I patiently wait for the market to rally to my 2290/2360 sell level. If triggered, I will have a T/P level at 2240 while leaving my 2415 ‘Closing Stop’ unchanged.
FTSE 100
My FTSE plan worked well as Monday’s 100-point fall saw the market hit my 9110 T/P level on my latest 9170 short position and I am still flat. Today, I will again be a seller from 9130/9200 with a lower 9275 ‘Closing Stop’. If I am taken short, I will have a T/P level at 9060. I still do not want to be long the FTSE at this time.
Dow Rolling Contract
I am still flat the Dow as the market sold off shortly after I posted yesterday morning. Today, I will lower my sell level to 45150/45400 with a lower 45605 tight ‘Closing Stop’. If I am taken short, I will have a T/P level at 44910.
Cash NASDAQ 100
I am still short the NDX at an average rate of 23320 as the market just fell shy of Monday’s T/P level before rallying overnight, sitting at 23410 as I go to press. As I am still short the S&P, I will now raise my NDX T/P level to 23300 and reassess if triggered. Meanwhile, I will leave my 23505 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
Despite higher Treasury Yields the Bund rallied to my 129.80 T/P level on last week’s 129.20 long position and I am now flat. This morning, the Bund is trading at a price of 129.60. We have support below from 128.40/129.10 where I will again be a buyer with the same 127.75 ‘Closing Stop’. If I am taken long, I will have a T/P level at 129.70. I still do not want to be short the Bund at this time.
Gold Rolling Contract
I am still flat. As I am still long Silver, I will now lower my Gold buy level to 3255/3275 with a lower 3239 ‘Closing Stop’. If I am taken long, I will have a T/P level at 3298.
Silver Rolling Contract
No Change: I am still long Silver from yesterday morning at a price of 38.00. I will add to this trade at 37.20 while leaving the same 35.95 ‘Closing Stop’. I will now lower my T/P level to 38.70. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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