Ten-year U.S. Treasury yields hit a fresh seven-year high as they resumed trading after a holiday, posing a fresh test of investor appetites for riskier assets. Stocks in Asia were mixed, with China’s stock sell-off easing alongside a slump in Japanese shares.The S&P 500 Index closed little changed Monday after reversing a slide, while the Nasdaq 100 Index fell to the lowest since August. The U.S. bond market was closed due to the Columbus Day holiday. Traders are now gearing up for $230 billion of Treasury auctions this week following last week’s sell-off.
To mark my 1675th 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 71 points yesterday and is now ahead by 338 points for October, having made 1276 points in September, 599 points in August, 1074 points in July, 994 points in June, 1927 points in May, 1657 points in April, 1760 points in March and 2256 points in February. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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China’s equities remained in focus after overseas investors dumped $1.4 billion of domestic Chinese shares through exchange links with Hong Kong Monday. Traders are on watch for whether the so-called national team of state-linked funds helps to prop up Chinese shares. Casting a cloud over Chinese assets has been festering tensions with the U.S., with the Treasury Department weighing whether to name China a currency manipulator.
U.S. Secretary of State Michael Pompeo had a testy exchange with Chinese officials during his trip to Beijing, which — unlike a visit in June — didn’t feature a meeting with President Xi Jinping.
Elsewhere, oil traded in New York advanced toward $75 a barrel. Iron ore futures in Dalian jumped to the highest level in almost three weeks on demand. South Korea’s market is closed for a holiday Tuesday. Brazil’s stocks rallied after far-right Army captain and investor favorite Jair Bolsonaro took a commanding lead in the first round of the nation’s presidential election. In Europe, Italy’s 10-year bond yield ratcheted up to a four-year high and banking stocks sold off as the populist government refused to bow to European Union criticism over its planned budget.
Overnight stocks in Shanghai were little changed after the biggest sell-off in more than three months, as investors weighed increasingly attractive valuations against deepening U.S.-China tensions. The yuan gained in onshore trading after sliding on Monday. A stronger yen left Japanese stocks under pressure. European equity futures tipped a muted open. The IMF’s first reduction in its outlook for global growth since 2016 underscored headwinds to stocks going forward — particularly outside the U.S., which continues to benefit from tax cuts.
This morning on the Economic Front we have the US NFIB Small Business Optimism at 11.00 am. We have no data of note due from either the Euro-Zone or the UK. Finally the Fed’s Williams and Harker are speaking this afternoon at 3.30 pm and 6.00 pm respectively.
December S&P 500
Last month I discussed the 28 Day Consecutive closing streak of extraordinary low market volatility. Specifically, the S&P 500 had not closed more than 0.8% in either direction since late – July. That streak extended to a nearly unbelievable 50 straight days until last Thursday, October 4, when the Index closed lower by 0.82%, from the previous day’s close. This streak was the largest in 50 years, since early 1968. Normally similar streaks preceded periods of increased volatility and this has certainly being the case over the last three trading sessions. Yesterday after the S&P traded the whole of my buy range for an average long position at 2871 the market rallied back above its 50-Day Moving Average with some force and this continued into the Chicago close. Personally as so many of my calls hit yesterday and I had too many positions I covered this position at my revised 2874 T/P level and I am now flat. With the US Bond Markets closed yesterday for the Columbus Day Holiday we will have more liquidity in all markets today. The 50 Day MA for the S&P is close by at 2887 and given the recent rallies off a break of this key average the chances are that the next break will be sustained. The 200 Day MA is well below current prices at 2768 which could be a possible target. I am still looking for a weak October followed by a strong rally into year-end and first Quarter of 2019. Today I will again look to buy the S&P on any dip lower to 2863/2871 with a 2856 stop. I will now lower my sell level to 2906/2914 with a 2921 stop.
EUR/USD
I am still flat the Euro and today I will now lower my buy level to 1.1390/1.1430 with a 1.1355 stop.
December Dollar Index
No change as I am still a small seller on any rally higher to 95.90/96.30 with the same 96.65 stop.
December DAX
As so many of my calls hit near the same time yesterday I waited to buy the DAX which I did at a price of 11905. Subsequently the market fell another 25 points before rallying 100 points off this low and I used this rally to exit any long position at my revised 11925 T/P level and I am now flat. The DAX has huge support from 11750/11830 and this area must hold or we could be for a nasty move lower. Today I will be a buyer in this area with a 11690 tight stop.
December FTSE
The FTSE traded the whole of my buy range for an average long position at 7210 before finally following the US Markets higher. I used this rally to exit at my revised 7225 T/P level and I am now flat. The next support area for the FTSE is from 7120/7170 and today I will be a buyer on any dip to this area with a 7085 tight stop. The FTSE has strong resistance at 7330 and today I will be a small seller on any rally higher to 7310/7350 with a 7385 stop.
Dow Rolling Contract
My Dow plan worked well with the market trading lower to my 26235 buy level before incredibly rallying over 300 points. Unfortunately I exited this long position at 26265 and I am now flat. While the 50 Day MA for the S&P is near current prices the Dow equivalent is still much lower at 25998. Today I will again look to buy the market on any dip lower to 26080/26230 with a 25975 stop. I still do not want to be short the Dow at this time.
December NASDAQ
I am still flat the NASDAQ which itself had a wild trading session yesterday with the market reversing a nasty sell-off with a strong rally into the close. My only interest in buying the market is on a dip lower to 7260/7310 with a 7210 stop.
December BUND
No change as I am still a small buyer on any further dip lower to 156.90/157.30 with the same 156.55 stop.
Gold Rolling Contract
My Gold plan worked well with the market trading lower to my 1185 buy level before rallying back above 1192 overnight. As I was stopped out of my Silver long position I emailed my Platinum Members to exit any long Gold position at 1187.50 and I am still flat. With sentiment still at extreme negative levels to both Gold and Silver I still believe we will have a large move higher in both metals over the coming months. Today I will again look to buy Gold on any dip lower to 1170/1178 with a 1163 stop.
Silver Rolling Contract
Shortly after I posted yesterday I was stopped out of my 14.87 long position at 14.38 and I am now flat. As long as Silver can hold its September low at 13.92 and its December 2015 low of 13.62 then I will continue to be a buyer of Silver on dips. Today my buy level will be from 13.90/14.30 with a wider 13.55 stop.
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