Selling of Sterling re-emerged just before I posted yesterday’s Daily Commentary as the prospect of a ‘’hard’’ exit from the EU loomed large. A date for triggering Article 50 announced on Sunday and repealing the jurisdiction in the UK of the European Court of Justice played into the mix with the political primacy of the immigration issue even ahead of preferred EU market access. GBP/USD was sold down through 1.20 to test 1.2820 and within sight of the post-Brexit poll low of 1.2798 of July 6. Adding to the sombre mood, mentioning ‘’turbulence’’ and ‘’rollercoaster’’ prospects ahead, UK Chancellor Philip Hammond warned that the UK would not get back to surplus until 2020.
To mark my 1200th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2750 for my Platinum Service which includes 1/4 updated emails throughout the trading day. This offer is open to both new and existing members and if anyone is interested, you can contact me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 68 points yesterday on the first trading day in October, having made 1142 points in September and 1782 points in August. The previous four months saw gains of 1682, 2550, 1532 and 2175 points respectively. Since I started this Platinum Service in June 2015 it has averaged a monthly gain of over 1900 points.
Pound selling has eased with Cable now trading at 1.2855 off an overnight low at 1.2817. Yesterday we had the release of UK PMI Manufacturing PMI for September which came in at a healthy two year plus high of 55.4 versus 53.4 the previous month and 52.1 expected, giving hope that Sterling’s decline will temper lack of preferred EU trade access.
Elsewhere, there has been pluses and minuses across major FX markets. Equity markets were choppy in Europe, where the FTSE rose 1.22% helped by the weaker Sterling, while the US opened weaker, then steadied after the release of a somewhat better than expected ISM Manufacturing Report of 51.5, up from 49.4 and beating the 50.4 consensus. Employment was less negative at 49.7 with production and new orders both higher. US Treasury Yields pushed higher towards a December rate hike with 2 years and 10 year Treasuries closing 3 basis points and 2 basis points higher respectively.
US Construction spending in August fell 0.7%, which, along with downward revisions, saw the Atlanta Fed’s GDPNow for Q3 reduced further to 2.2% from 2.4% on lower business and Government construction spending. Remember it was only a few weeks that this number was over 3%.
In commodity news, LME base metals were soft, while both WTI and Brent rose by 1%. Gold and Silver both closed lower, while coal prices rose another $6.50 to $206.50 which is the highest level in over two years.
This morning on the economic front we already had the release of the Japan Consumer Confidence Index for September which came in at 43.0 versus 41.5 expected. At 9.30 am we have UK Construction PMI. This is followed at 2.45 pm by ISM New York. Finally at 3.000 pm we have the IBD/TIPP Economic Optimism.
December S&P 500
The S&P fell hard after rallying initially after I posted yesterday morning with the market eventually hitting my 2152 buy level before having a quick rally back above 2156. As I had a Dow buy level just below when I got filled in the S&P, I emailed my Platinum Members to exit this position at 2154.50 as I did not want to have two ‘’open equity positions’’ at the one time. As I had a difficult start to September, I do not want to replicate this situation and therefore I will continue with my theme of banking points when available. I am now flat the S&P and today I will again look to buy the market on any dip lower to 2144/2149 with a 2139 stop. Again if I am taken long and manage to cover this position for a T/P or I am stopped out of this position, I will be a more aggressive buyer on any dip lower to 2127/2133 with a 2119 wider stop. I still do not want to be short the S&P at this time.
EUR/USD
This morning the Euro is following Sterling lower as we break the 1.1180 previous support level. I am still flat and today I will now lower my buy level to 1.1135/1.1165 with a 1.1095 tights stop which is just below the 1.1121 low print post the last FOMC Meeting. Despite the negative price action I still do not want to be short the Euro at this time.
December Dollar Index
I am still flat the Dollar and today I will now raise my sell level to 96.25/96.55 with a 96.80 tight stop.
December DAX
This morning the DAX is rallying on a combination of a higher 2% opening in Deutsche Bank plus the lower Euro. As I have mentioned over the past month this without doubt has been the most frustrating market to trade all year. Today I will now raise my buy level to 10430/10490 with a 10375 stop. I still do not want to be short the DAX at this time as despite what Chancellor MerkeL says publically, I have no doubt the Bundesbank are supporting the share price as both Germany and the ECB cannot afford Europe’s largest bank to fall. Remember Deutsche Bank is the largest Derivates trader in the world with massive outstanding trading positions.
December FTSE
The one market that I have said all year not to be short is the FTSE especially after the UK voted to leave the EU. The huge fall in Sterling gives the UK a massive competitive advantage as we saw from the huge PMI data yesterday. I am still flat the FTSE which just gaped higher on the PMI release at 9.30 am yesterday. Today I will raise my buy level to 6970/7000 with a tight 6940 stop. The main reason I am been so aggressive is the fact that the FTSE is making new multi-year highs as I post this commentary. Naturally I do not want to be short the market at this time.
Dow Rolling Contract
My Dow plan worked well yesterday as after I exited my long S&P position above the Dow hit my 18200 buy level before having a nice 70 point rally which enabled me to cover this position at my revised 18230 T/P level and I am now flat. Today I will raise my buy level slightly to 18160/18220 with a 18110 stop.
December BUND
Late yesterday the Bund traded lower to my 165.30 buy level before having a small rally which enabled me to cover this position at my revised 165.43 T/P level as emailed to my Platinum embers and I am now flat. Today I will again look to buy the Bund on any dip lower to 164.80/165.10 with a 164.45 tight stop. As the Bund is testing key support this morning I do not want to be short the market at this time.
Gold Rolling Contract
The latest Daily Sentiment Index reading for Gold is very low at just 15% bulls. This implies that we are very near another bottom on Gold which coincides with the 1280/1300 major support level for the precious metal. As I am already long Silver, I will now reduce my Gold buy level to 1293/1299 with a 1285 stop.
Silver Rolling Contract
Late yesterday Silver traded lower to my 18.80 buy level. I am still long and I will now raise my stop in this position to 18.35. If I am stopped out of this trade I will be a more aggressive buyer in front of 18.15 with a 17.80 stop.
Recent Comments