U.S. Indexes closed primarily green with outperformance in the NASDAQ on Monday thanks to the rally in AMD shares. AMD has signed a deal with OpenAI, with OpenAI to deploy 6 gigawatts of AMD GPUs based on a multi-year agreement. Sectors were predominantly firmer, with Consumer Discretionary, Tech and Utilities leading the gains, while Real Estate, Consumer Staples and Health Care underperformed. Note, the Dow was the only Index to close red as Verizon (VZ) put downward pressure on the Index following a CEO transition. US macro updates were light, given the US government shutdown entering its second week, with little sign of progress on a reopening so far. In FX, the Japanese Yen was the clear underperformer after Sanae Takaichi, who is perceived to advocate for looser fiscal policy and a more delayed Bank of Japan tightening cycle, won the LDP leadership election. Meanwhile, the Euro was also pressured after the French PM resigned on the view that he could not form a working cabinet. Therefore, the Dollar Index saw modest strength due to the Yen and Euro weakness, while US Treasury yields also moved higher. Treasury trade remains quiet amid the government shutdown and lack of data, with expected volatility in Treasuries (measured by the ICE BofA MOVE index) falling to lows last seen in December 2021. In commodities, crude prices are firmer following the modest OPEC+ 137k hike (some had expected 500k given recent reports). Meanwhile, Gold surged above USD 3,900/oz as a possible solution to the US government shutdown remains to be seen. This week’s focus will lie on US Treasury supply, several Fed speakers, FOMC Minutes, and the Preliminary October University of Michigan report. Elsewhere, Oil closed higher by 1.33% while Gold ended Monday’s session with a gain of 1.70%, closing at a new all-time high.
To mark my 3250th 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 lost 790 points yesterday and is now down by 160 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 0.36% higher at a price of 6740.
The Dow Jones Industrial Average closed 63 points lower for a 0.14% loss at a price of 46,694.
The NASDAQ 100 closed 0.78% higher at a price of 24,978.
The Stoxx Europe 600 Index closed 0.02% higher
This Morning, the MSCI Asia Pacific closed 0.4% lower.
This morning, the Nikkei closed 0.13% higher at a price of 48,005.
Currencies
The Bloomberg Dollar Spot Index closed 0.41% higher.
The Euro closed 0.24% lower at $1.1712.
The British Pound closed 0.02% higher at $1.3482.
The Japanese Yen fell 1.96% closing at $150.30
Bonds
U.K.’s 10-Year Gilt closed 4 basis points higher at 4.74%.
Germany’s 10-Year Bund Yield closed 2 basis points higher at 2.72%
U.S.10 Year Treasury closed 4 basis points higher at 4.16%.
Commodities
West Texas Intermediate crude closed 1.33% higher at $61.69 a barrel.
Gold closed 1.70% higher at $3950.10 an ounce.
This morning on the Economic Front we already had the release of German Factory Orders which fell 0.8% for August versus +1.1% expected. Next, we have the New York Fed 1-year Consumer Inflation Expectations at 4.00 pm and a Three-Year Treasury Auction at 6.00 pm. Finally, we have speeches from Fed Members Bostic at 3.00 pm, Bowman at 3.05 pm and Kashkari at 4.30 pm. Due to the Government shutdown there will be no U.S. data released until further notice.
Cash S&P 500
Wrong! I stopped myself out of my latest 6996 average short position at 6739 as emailed to my Platinum Members and I am still flat. With the S&P trading so far outside the top of its Daily Bollinger Band I have a hard time in trying to be a buyer. Correlations are breaking down across the board but these have not mattered so far. If we do get a sell-off any tag of the 14 EMA at 6439 should see a decent rally. The next basic support zone below the 14 EMA is the 20 MA which is currently at 6310. Any test of these support levels will see the S&P trading below the bottom of its Bollinger Band which is insane as it would only be a 6% correction. Even a 10% correction will only bring us back to the February highs while a 20% correction will see the S&P hit a price of 5400. If the S&P fell to this area the Market Cap to GDP would still be at 200%. It looks like nothing of substance will happen until we see a sustained drop below 6700 to begin with. Fed Chair Powell is speaking this week with the market pricing in rate cuts at every meeting for the rest of the year, so if he wants to dissuade them from that now is his chance. In my opinion I cannot imagine easing rates into 220% Market Cap to GDP. What would be a topping signal? A gap up that reverses hard and closes deep red. The S&P has resistance from 6748/6770 where I will again be a seller with a higher 6791 ‘Closing Stop’. If I am taken short, I will have a T/P level at 6725.
Dollar Index
Shortly after I posted on Monday the Dollar rallied to my 98.15 T/P level on my latest 97.70 long position and I am now flat. Today, I will again be a buyer on any dip lower to 97.10/97.90 with the same 96.35 ‘Closing Stop’. If I am taken long, I will have a T/P level at 98.50.
Russell 2000
I am still short the Russell from last week at 2470 with the same 2430 T/P level. I will add to this position at 2530 while leaving my tight 2575 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
No Change: The FTSE continues to trade near all-time highs into the upper Bollinger Band. I have no idea why the FTSE is so strong given the sluggish economy, a messy budget situation and inflation the highest in the G7 Nations. This is definitely above my pay grade but these are the markets we face and have to try and analyse. I am still flat the market. Today, I will continue to be a seller from 9510/9580 with the same 9651 ‘Closing Stop’. If I am taken short, I will have a T/P level at 9430. I still do not want to be long the FTSE at this time. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
I am still flat. Today, I will lower my sell level 46950/47200 with a lower 47405 ‘Closing Stop’. If I am taken short, I will have a T/P level at 46720.
Cash NASDAQ 100
Wrong! As I said to my Platinum Members sometimes you are caught on the wrong side of an announcement as was the case with AMD yesterday resulting in a 34% gain for their shares. This move higher saw my 24905 stop triggered on my latest 24700 average short position and I am now flat. The low for the NDX was the first trading session of each month for past five consecutive months. The last time that this happened was back in 1928 just ahead of the 1929 crash. Market Cap to GDP is now at 220%. I suppose the bubble can become even more extreme before the invariable bust. Times like this are very difficult for the sensible and disciplined. I am not going to waste time trying to make predictions in how and when it all ends, but still not a soul, analyst or bank/hedge fund bearish presently. We are seeing massive negative divergences at these new highs. We had two black candles on Thursday and Friday which is often a warning sign but these got reversed yesterday on the AMD news. Black candles are normally a reliable signal that markets are topping. The NDX has further resistance from 25050/25250 where I will again be a seller with a 25475 ‘Closing Stop’. If I am taken short, I will have a T/P level at 24820.
December BUND
I am still flat as the Bund again traded in a narrow range. Today, I will continue to be a buyer on any dip lower to 127.90/128.70 with the same 127.15 ‘Closing Stop’. If I am taken long, I will have a T/P level at 129.30.
Gold Rolling Contract
Wrong! I was stopped out of Monday’s 3925 average short Gold position at 3951 and I am now flat. The Monthly RSI for Gold is above 88 which I have never seen before. Gold has further resistance from 3578/3598 where I will again be a seller with a 3615 ‘Closing Stop’ If I am taken short, I will have a T/P level at 3926. I still do not want to be long Gold at this time.
Silver Rolling Contract
Silver tagged on a further 1.5% on Monday, closing at a new high for the year at a price of 48.70. I am still flat. Silver has short-term support from 45.80/46.80. I will now raise my buy level to this area with a higher 44.15 ‘Closing Stop’. If I am taken long, I will have a T/P level at 47.90.
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