U.S. Indices closed the day mixed on Tuesday, as the tech-heavy NASDAQ 100 lagged and was weighed on by weakness in mega-cap names Nvidia, Microsoft, Broadcom, and Netflix, while the Russell 2000 pared Monday’s losses. Amid a lack of tier 1 data and Fed blackout ahead of the confab next Wednesday, focus resided around a deluge of US earnings and also remarks from President Trump/Bessent. Trump announced a trade deal with both the Philippines and Indonesia, which will pay 19%, while he said they will probably be meeting Xi in the not too distant future, and Xi has invited him to China. Bessent suggested that August 1st is a pretty hard deadline, despite saying on Monday that the quality of the deal is what matters, not the time keeping, and will be in talks Monday and Tuesday with China in Stockholm. Sectors are largely firmer with Tech the clear laggard, while Health resides at the top and is buoyed by Danaher (DHR). It is also worth noting that in the midst of earnings season, some of the tariff impact is starting to show, with GM tumbling post earnings following weak guidance, while RTX also took a hit after it cut its profit guidance amid the impact of tariffs. The Dollar saw losses, to the benefit of all G10 FX peers, while the crude complex was also lower in light of energy-specific newsflow ahead of private inventory metrics after-hours. T-Notes saw slight gains across the curve and were largely supported by aforementioned Bessent’s comments, while safe haven currencies generally caught a bid. Ahead, Tesla and Alphabet earnings on Wednesday are the highlights in what is a quiet week in terms of scheduled events, ahead of a blockbuster one next week. Overnight the Nikkei has surged following a 15% trade agreement between the U.S. and Japan. The Nikkei ended Wednesday’s session with an impressive 4% gain. Elsewhere, Oil closed lower by 1.25% while the continued weakness of the Dollar saw Gold end Tuesday’s session with a gain of 1%.
To mark my 3225th 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 350 points yesterday and is now ahead by 3235 points for July 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 0.06% higher at a price of 6309.
The Dow Jones Industrial Average closed 179 points higher for a 0.4% gain at a price of 44,502.
The NASDAQ 100 closed 0.5% lower at a price of 23,063.
The Stoxx Europe 600 Index closed 0.46% lower.
This Morning, the MSCI Asia Pacific closed 0.3% higher.
This Morning, the Nikkei closed 3.8% higher at a price of 41,278.
Currencies
The Bloomberg Dollar Spot Index closed 0.49% lower.
The Euro closed 0.46% higher at $1.1746.
The British Pound closed 0.26% higher at $1.3526.
The Japanese Yen rose 0.51% closing at $146.61.
Bonds
U.K.’s 10-Year Gilt closed 4 basis points lower at 4.57%.
Germany’s 10-Year Bund Yield closed 2 basis points lower at 2.59%
U.S.10 Year Treasury closed 2 basis points lower at 4.33%.
Commodities
West Texas Intermediate crude closed 1.25% lower at $66.36 a barrel.
Gold closed 1.03% higher at $431.10 an ounce.
This morning on the Economic Front we have a German 10-year Bund Auction at 10.30 am followed by U.S. MBA Mortgage Applications at 12.00 pm. Next, we have Existing Home Sales and European Consumer Confidence at 3.00 pm. Finally, we have a 20-Year Treasury Auction at 6.00 pm.
Cash S&P 500
The S&P Weekly chart has a negative RSI divergence which has often spelled serious market trouble in the past, some not so serious while some have been very serious. The problem is I cannot predict will materialise. When you step back and put what I have been writing about over the past six weeks: The highest valuations ever, the fastest and largest Market Cap expansion ever, retail sentiment off the charts, a historic concentrated market with nobody diversified and nobody seeing any risks while earnings are still expanding and recession risks while at the same time all negatives are ignored as the Yield Curve is un-inverted and charts are hitting historic trend lines. Frankly I could argue that this is terrifying just for the sheer building risks of what could go wrong. But as long nothing goes wrong it is probably a theoretical exercise. However, I cannot be a buyer at these valuations especially with Market Cap to GDP at an unsustainable 209%. I will continue to sell rallies like I did yesterday with tight stops and be quick to take profits. Yesterday, the S&P hit my 6313 sell level before selling off to an intra-day low at 6283. This move lower saw my 6292 T/P level. Subsequently I emailed my Platinum Members to sell the S&P on any further rally. This mornings near 4% rally in the Nikkei saw the S&P hit my next sell range for a now 6324 short position. I will add to this trade at 6344 with a now higher 6361 ‘Closing Stop’. I will have a T/P level on this position at 6303. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
EUR/USD
The strength of the Euro saw the market hit my second sell level at 1.1750 for a now 1.1710 average short position. I will now raise my T/P level to 1.1640 while leaving my 1.1805 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
I am still long the Dollar at a price of 98.00. I will continue to look to add to this trade at 97.30 while leaving my 96.75 ‘Closing Stop’ unchanged. I will now lower my T/P level to 98.50. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
The Russell never came close to Tuesday’s buy range and I am still flat. I will not chase the Russell higher from here as I continue to be a buyer on any dip lower to 2120/2190 with the same 2075 ‘Closing Stop’. If I am taken long, I will have a T/P level at 2240.
FTSE 100
Overnight the FTSE rallied to my second sell level at 9050 for a now 9010 average short position. I will now raise my T/P level to 8960 while leaving my 9125 tight ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
The Dow hit a low at 44270 yesterday afternoon before rallying almost 400 points, helped by the announcement of the U.S. Trade Agreement with Japan. This move higher saw the Dow hit my sell range for a now 44650 short position. I will add to this trade at 44900 while leaving my 45105 tight ‘Closing Stop’ unchanged. I will now raise my T/P level to 44530 on this position. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
50% of the Market Cap in the NASDAQ 100 is in the hands of just five companies: Nvidia 14%, Microsoft 12.67%, Apple 10.65%, Amazon 6% and Meta Platforms at 4.53% which is insane. The obvious implication is that nobody is diversified. If you are an Index investor thinking you are diversified, you are not. Market concentrated risk and it has been working brilliantly so far but the big question is how long this can last. Indeed in the latest rally there is virtually no differentiation in price action among the two largest market cap companies: namely Nvidia and Microsoft. The charts show a 95% daily directional price correlation as trillions of dollars of market cap are stamped out of this air while valuations keep relentlessly expanding. Just like the S&P above I cannot be a buyer against this backdrop as I continue to be a seller of rallies with tight stops. Yesterday’s quick NDX drop saw my 23060 T/P level triggered on my latest 23200 short position and I am now flat. Today, I will again be a seller from 23180/23340 with the same 23455 ‘Closing Stop’. If I am taken short, I will have a T/P level at 23030.
December BUND
I am still flat as the Bund as the market rallied a further 20 points from where I marked prices yesterday morning. I am reluctant to chase the Bund higher given how low Bund Yields are at 2.591%. Therefore, I will continue to be a buyer from 128.70/129.50 with the same 127.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 130.15.
Gold Rolling Contract
Gold closed higher by a further 1% yesterday and I am still flat as the market continues to give no opportunity for a buy the dip sell-off. Gold is now overbought. Gold has short-term resistance from 3460/3480 where I will be a seller with a 3501 higher ‘Closing Stop’. Meanwhile, I will continue to be a buyer on any dip lower to 3295/3315 with the same 3279 ‘Closing Stop’. If I am taken short, I will have a T/P level at 3438. If I am taken long, I will have a T/P level at 3334.
Silver Rolling Contract
Silver never came close to Tuesday’s buy range and I am still flat. This morning, Silver is trading at 39.20. I will now raise my buy level to 37.50/38.30 while leaving my 35.95 ‘Closing Stop’ unchanged. If I am taken long, I will have a T/P level at 39.05.
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