U.S. Equity Markets surged while Oil fell following the unwinding of the Geo-political risk premium which was put on ahead of the weekend. The Dow led Monday’s gains closing higher by over 500 points, for a 1.58% gain. This move higher saw the VIX crushed, closing lower by over 7% at a price of 19.75. Investors are closely monitoring the Federal Reserve’s latest policy-setting meeting, where the future outlook on the economy and interest rates will come into focus. Consensus on Wall Street continues to believe that the Fed has reached peak rates and will maintain current rates for another month. Fed Chair Jerome Powell recently stated that the rise in bond yields could help support restrictive policy and would diminish the need for any further interest rate increases. However, any indications that the Fed would keep rates at current levels for longer than markets currently expect could send yields even higher and prolong the historic drawdown in the bond market. Friday’s U.S. jobs report for October is expected to show a slowing yet stable labour market, with the unemployment rate remaining at 3.8%. The strength of the labour market has been a crucial factor in the resilience of the economy and if unemployment begins to rise, even modestly, investors could begin to turn to safe-haven investments such as bonds and the U.S. Dollar. The Federal Reserve will also be closely looking at wage growth, which is expected to show 4% annual growth – the lowest figure since the pandemic. This would support the case that most analysts believe the Fed’s current restrictive policy is working to bring inflation levels down. As earnings season continues, investors will look to Apple (AAPL) to help stabilise a mixed bag of results from mega-cap tech companies thus far. The iPhone maker is set to report earnings after the market close on Thursday. The tech-heavy Nasdaq has fallen over 10% from the highs this summer and any further decline in these large technology companies could drag the larger market down even further. Consumer spending will also come under tight scrutiny this week with the likes of McDonald’s (MCD), Starbucks (SBUX), Airbnb (ABNB), and PayPal (PYPL) reporting earnings. European Markets closed higher. The Bank of England (“BOE”) is scheduled to hold its latest rate-setting meeting on Thursday, with expectations that the central bank will hold rates steady for another month at 5.25%. The central bank is expected to reiterate that rates are projected to remain high for quite some time and that any resurgence in pricing pressures could open the door for further rate hikes. Investors will also be looking for the latest update to its economic quarterly forecast which is expected to show stagnant growth for the next few quarters. Elsewhere Oil fell 3.5% while Gold closed lower by 0.5%.
To mark my 2875th 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 43 points yesterday and is now ahead by 3088 points for October after closing September with a small gain of 228 points, after finishing August with 1485 points gain following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 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 1.20% higher at a price of 4166.
The Dow Jones Industrial Average closed 511 points higher for a 1.58% gain at a price of 32,928.
The NASDAQ 100 closed 1.09% higher at a price of 14,335.
The Stoxx Europe 600 Index closed 0.36% higher.
Last Friday, the MSCI Asia Pacific closed 0.5% lower.
Yesterday, the Nikkei closed 0.95% lower at a price of 30,696.
Currencies
The Bloomberg Dollar Spot Index closed 0.42% lower.
The Euro closed 0.5% higher at $1.0616.
The British Pound closed 0.3% higher at 121.68.
The Japanese Yen rose 0.4% closing at $149.06.
Bonds
Germany’s 10-year yield closed 1 basis points higher at 2.83%.
Britain’s 10-year yield closed 2 basis points higher at 4.56%.
U.S.10 Year Treasury closed 4 basis points higher at 4.89%.
Commodities
West Texas Intermediate crude closed 3.5% lower at $82.30 a barrel.
Gold closed 0.5% lower at $1997.10 an ounce.
This morning on the Economic Front we have German Retail Sales at 7.00 am, followed by Euro-Zone CPI and GDP at 10.00 am. Next, we have the U.S. Employment Cost Index at 12.30 pm. This is followed by the Housing Price Index at 1.00 pm and the Chicago Fed Purchasing Managers’ Index at 1.45 pm. Finally, at 2.00 pm we have Consumer Confidence.
Cash S&P 500
So far, my decision to hold onto my aggressive long S&P position is proving to be the right call given the out-of-the-box rally yesterday. There is little doubt that Israeli-Hamas conflict has thrown a massive wrinkle in the signal charts over the past three weeks. I thought that we would have put in a low by mid-October based on seasonality and oversold signal charts which was wrong as the oversold signal charts got more oversold with each passing day. Against that we have had our first decent month in a while as we stuck to the process of buying dips despite the pain it caused on a few occasions. It is worth noting that geopolitical events, especially regional ones also tend to be temporary as we have seen with the Russian invasion of Ukraine where no one seems to be writing about anymore. In 2022 the S&P bottomed before rallying 20% despite the ongoing conflict in Ukraine. As I mentioned in an updated email to my Platinum Members late Thursday, GANN Cycles were looking for a low between October 23/26. As it turned out the NASDAQ 100 made a low on Thursday so far at 14060 while the S&P had a low on Friday at 4104 before rallying hard. The key question is whether these lows stick. We have month-end today ahead of the November positive seasonality starting tomorrow. All this information comes against a background of severely oversold technical signals. I am still long the S&P at an average rate of 4180. I will now have a ‘’Closing Stop’’ on this position at 4139. Meanwhile, I will leave my 4205 T/P level unchanged. If any of the above levels are hit I will be back with a new update for my Platinum Members.
EUR/USD
My view that the Euro is weak and due a strong rally certainly worked yesterday as the market rallied to my revised 1.0624 T/P level on last week’s 1.0570 average long position. I am now flat. I will be an aggressive buyer on any further dip lower to 1.0500/1.0580 with the same 1.0445 ‘’Closing Stop’’.
September Dollar Index
No Change. I am still short the Dollar at 106.25 with a now higher 105.90 T/P level. This morning the Dollar is trading lower at 106.12. I will continue to look to add to this position at 106.95 with the same 107.35 ‘’Closing Stop’’. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
The DAX rallied yesterday, and I am still flat as Monday’s buy range was never threatened. Today, I will raise my buy level to 14470/14570 with a now higher 14395 tight ‘’Closing Stop’’. I still do not want to be short the DAX at this time.
Cash FTSE
The FTSE had a nice rally, hitting an afternoon high at 7362. This move higher enabled me to cover my 7300 average long position at my 7330 T/P level and I am now flat. The FTSE has strong support below from 7200/7270 where I will be an aggressive buyer with a lower 7145 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The Dow surged over 500 points yesterday. I am still flat as the market never came close to my buy range. Despite the aggressive rally, the Dow is still severely oversold. We have short-term support from 32480/32730. I will now raise my buy level to this area with a higher 32295 ‘’Closing Stop’’.
Cash NASDAQ 100
Thankfully the NDX rallied almost 350 points off last Thursday’s low print. This move higher enabled me to cover my aggressively long 14410 position for a small loss at 14369 as emailed to my Platinum Members and I am now flat. The NDX has short term support from 14130/14280 where I will again be a buyer with a 13995 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 14420.
December BUND
No Change. I am still flat the Bund having exited the last of my long positions last Thursday. The Bund has support below from 127.50/128.30 where I will again be a buyer with a 126.85 higher ‘’Closing Stop’’.
Gold Rolling Contract
Gold continues to attract strong buying, closing just below $2,000 last night. I am still flat and surprised that Silver has not been stronger. Gold has short-term support from 1950/1965 where I will continue to be a small buyer with a 1939 tight ‘’Closing Stop’’. Even though Gold is severely overbought, I still do not want to be short the market.
Silver Rolling Contract
No Change. I am still long Silver from five weeks ago at 24.05. In a change of strategy, I will have no stop or no T/P level on this position. This morning Silver is trading higher at 23.45. If this view changes, I will be back with a new update for my Platinum Members.
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