Earlier this morning the Bank of Japan announced a no change in interest rates, before surprising markets by saying it would purchase debt so that Bond Yields remain near zero percent. The Central Bank said at this morning’s meeting that it would move away from a rigid target for expanding Money Supply, while seeking to control Bond Yields across different maturities. The BoJ said its target for expanding the monetary base through asset purchases, previously set at 80 trillion yen ($780bn} annually, may now fluctuate in the short-term to enable policy makers to control Bond Yields and that it can extend the negative rate further if needed.
Due to the number of members taking up my 2 year Euro 2500 rate for my Platinum Service in recent months, this will be the last month that I am offering this special price which will now rise to Euro 2750 from next Thursday. If anyone is still interested in this original deal which has been in situ since January, can you please email me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 200 points yesterday and is now ahead by 462 points for September, having made 1782 points in August and 1682 points in July. The previous three months saw gains of 2550, 1532 and 2175 points respectively. Since I started this Platinum Service in June 2015 it has averaged a monthly gain of over 2000 points.
According to the chief market economist at SMBC Friend Securities in Tokyo, the BOJ has gone two, three steps ahead of expectations in clarifying its shift from quantity to interest rates, which is showing the BOJ’s desire to control the yield curve to reduce the side effects stemming from the negative rate policy. The Japanese stock market liked what they heard closing up 2% at 16,800.
Yesterday the US Dollar remained subdued with the US Equities again closing flat having opened higher while US Treasury yields closed 1/2bps lower across the curve. US Housing Starts fell a larger than expected 5.8% and the Atlanta Fed GDPNow for Q3 was shaved to 2.9% from 3.0% last night. This was not due to housing starts but the somewhat stronger CPI last week that saw consumption lowered a touch.
Elsewhere Sterling has continued to drift lower, below 1.30, trading at 1.2985 this morning.
This morning on the economic front we have the UK PSNB ex Banking Groups. We have no data due from either the Euro-Zone or the US as we await the FOMC Rate announcement at 7.00 pm and this is followed by the Yellen press conference. I do not expect the FOMC to move rates this evening and of course there will be an immediate interest in the Statement especially with regards the number of dissenters. We could see three with George very likely, Mester likely, and Rosengren possible after his comments on September 9th. With the Statement comes the accompanying ”Projection Materials” which is the updated forecasts. Of specific interest will be the range of FOMC member Fed Funds end year forecasts and for the longer run. That was 3% when last published in June, having been downgraded over time from 4.25% back in January 2012 when these Fed Funds forecasts were first released. Then it will be deciphering the tone and outlook from Fed Chair Yellen’s press conference 30 minutes later at 7.30 pm.
December S&P 500
The idea of buying all dips ahead of an FOMC Meeting worked perfectly again yesterday with the S&P hitting my 2131 buy level before having a nice rally to over 2140 which enabled me to cover this position at my 2136 T/P level and I am now flat. Obviously all equity markets are opening higher this morning on the back of the Bank of Japan announcing that it will purchase debt. As most of my regular members know that when we have a major economic data such as the NFP, ECB Meeting and a FOMC Meeting I will have no position until we get the announcement. Today I will again look to buy the S&P on any dip lower to 2124/2130 with a 2118 stop. Again as mentioned yesterday, if over the coming trading sessions the S&P trades lower to my 2088/2094 buy zone, I will be an aggressive buyer with a 2079 wider stop. Also if after we get the FOMC out of the way and the S&P builds value above 2157 I will then look to set up a long position as I will then look for my higher targets at 2200/2220 and possibly over 2300. I still do not want to be short the S&P at this time.
EUR/USD
The Euro traded lower to my average buy level at 1.1165. I am still long and I will now lower my T/P level on this trade to 1.1185 as I want to be flat ahead of the FOMC this evening. If the Euro trades lower following the announcement I will be a buyer from 1.1050/1.1090 with a 1.1010 stop. As I do not expect the Fed to move rates this evening, I do not want to be short the Euro at this time.
December Dollar Index
Earlier this morning the Dollar traded higher to my 96.25 sell level. As I am already long the Euro, I emailed my Platinum Members to exit this position at 96.10 and I am now flat. Today I will again look to sell the Dollar on any rally higher to 96.50/96.80 with a 97.20 stop.
December DAX
Finally this morning the DAX traded higher to my 10475 sell level before having a small sell-off which enabled me to cover this position at my revised 10460 T/P level as I want to be flat ahead of the FOMC this evening. The DAX has two strong resistance levels at 10510/10550 and from 10620/10670. My only interest today will be to sell a test of the second resistance with a 10725 stop. I will also move my buy level higher to 10350/10410 with a 10295 stop.
December FTSE
Unfortunately after I posted yesterday the FTSE again missed my 6740 buy level. With Sterling continue to weaken I will now move my buy level higher to 6750/6790 with a 6720 tight stop. I still do not want to be short the market at this time.
Dow Rolling Contract
My Dow plan worked well with the market hitting my 18120 buy level shortly after the US markets closed before rallying strongly on the BOJ news earlier this morning. As I had the potential to have many of yesterday’s call executed overnight I emailed my Platinum Members to exit this Dow position for a small gain at 18135 and I am still flat. Hopefully you did better as it was late when I sent out this email. Just like the S&P above, I will stay flat the Dow until we get the FOMC Statement. If the Dow falls on the back of the announcement I will look to buy the market from 18070/18130 with a 18025 stop, especially as if the market tanks it should subsequently rally ahead of the Yellen press conference. I still do not want to be short the Dow at this time.
December BUND
No change as I am still flat and today I will now move my buy level higher to 164.70/165.20 with a 165.60 stop. I do not want to be long the Bund today as in the event that the Fed do hike then the Bund will probably get hit hard.
Gold Rolling Contract.
I am glad that I moved my buy level higher following the release of the latest DSI readings. Thankfully Gold hit my 1308 buy level before having a nice rally which enabled me to cover this position at my 1316 T/P level and I am now flat. Today I will again look to buy Gold on any move lower to 1301/1308 with a 1293 stop.
Silver Rolling Contract
Silver traded lower after I posted yesterday morning with the market hitting my 19.15 buy level with a 19.00 low print. Silver rallied this morning on the back of the BOJ news and this move higher enabled me to cover my long position at my 19.40 T/P level and I am now flat. Today I will again look to buy Silver on any dip lower to 19.00/19.30 with a 18.55 stop.
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