The main focus by markets ahead of yesterday’s trading session was no doubt the US Presidential Debate, billed as the showdown of the Century. But this is was not caught the market’s attention which was the better than expected US Consumer Confidence, now at its highest level since 2007. In short Consumers are happy. Those figures helped propel the S&P500 0.6% higher and countered the negative lead from Europe which is been driven by speculation that Deutsche Bank will have to raise fresh capital in order to pay a rumoured $14bn fine to the US Department of Justice – that compares to its current market cap of EUR 14.6bn.
Due to the number of members taking up my 2 year Euro 2500 rate for my Platinum Service, this will be the last week that I am offering this special price which will now rise to Euro 2750 from Saturday. If anyone is still interested in this 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 201 points yesterday and is now ahead by 978 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 new Platinum Service in June 2015 it has averaged a monthly gain of over 2000 points.
First up the US Presidential Debate. The market voted that Clinton won the debate with the FX weapon of choice for a likely Trump Victory – the Mexican Peso – recovering by 2.4%. A CNN poll of voters also has Clinton winning 62% against 27% for Trump, but as we know debate victories are not necessarily reflective of winners. In the 2012 Presidential race, Obama had won his first debate with Romney who got 72% – as for the subsequent victor – Mitt who….?. No doubt markets will be sensitive to the next batch of polls.
In the FX space, the Euro fell 0.3% following the negative sentiment from German Banks. Most major currency pairs were either flat or modestly higher with the AUD, Kiwi and Sterling up 0.3-0.4%. Despite a fall in the oil price, the Canadian Dollar was also marginally higher. WTI Oil fell 2.8% with any notion of an OPEC supply agreement being crushed by Iran. Iran stated is was unwilling to freeze output and wants to raise production to 4m barrels a day. The International Energy Agency also reiterated that supply and demand in the oil market won’t balance until 2017.
In terms of economic data, there was a lot. US Consumer Confidence figures rose to 104.1 – the highest level since mid-2007. It is the second straight surprise from the measure and perhaps signals that the US consumer is not being affected by the US Presidential Elections. Importantly for the jobs market, the population of people believing jobs are ”plentiful” also rose to a nine year high and runs counter to the softness coming from the ISM surveys. Still the ISMs are unlikely to bounce much next week if the Richmond Fed Manufacturing Index is a guide, coming in weaker than expected at -8, against expectations of -2.
US Treasuries fell 2.4 basis points to 1.56% with strong US Consumer Confidence figures not having much of an impact on the Bond Market. German Bund Yields were also lower. Down 2.3 basis poisnts to -0.14|%.
Comments late yesterday from Fed Vice Chairman Fischer may have also restrained the Bond Market. Fischer it appears remains undecided on raising rates, stating ”I don’t want to raise the Interest Rate too much”…”I don’t know when that should happen”. Confused? Me too. Fischer clarified stated that ”we’re beginning to see the fruits of a higher pressure labour market” and keeping interest rates low has helped caused that. While wages growth has picked up to 2.5% a year, Fischer has nominated a 3% as a figure as ”consistent with a reasonable rate of inflation”. For interest rates it appears the Fed Governors want to see evidence of inflation picking up before lifting rates again. Markets currently ascribe a 54% chance of the Fed lifting rates at the December Meeting.
This morning on the economic front we already had the release of German GFK Consumer Confidence for October which came in at 10.0 versus 10.2 expected. At 12.00 pm we have the US MBA Mortgage Applications and this is followed at 1.30 pm by US Durable Goods Orders. At 2.30 pm ECB President will attend a Meeting of the German Parliament’s EU Committee.
In what could be a volatile US afternoon session the following Fed Members are due to speak – Bullard, Evans, Mester, and George at 3.10 pm, 6.30 pm, 9.35 pm and 11.55 pm respectively. This all follows Fed Chair Janet Yellen’s Testimony to the House Panel on Bank Supervisions at 3.00 pm.
December S&P 500
My S&P plan worked really well yesterday with the S&P trading lower to my 2137 buy level with a 2133 low print before having a nice 20 handle rally. Yesterday was one of my busiest trading day’s of 2016 so far with eight of my nine market calls getting hit and some more than once. As so many of these calls got hit at the same time and therefore I had too much risk on board I emailed my Platinum Members to exit their long 2137 S&P position at 2142 and then to re-buy the market on any dip lower to 2139 which subsequently got filled. By the time my 2139 second buy level was executed I only has two open positions left at that time and after a nice rally I covered this position at my 2146 T/P level and I am now flat. As I mentioned yesterday I am not comfortable in being short any stock market at this time as every time the market looks like it is going to roll over we see strong buying return. This is still what I call the ”Central Bank Bubble” and will keep going until we see a major sell extreme which may not come until after the US Presidential Election. The S&P now has strong support at the 2134/2141 area and today I will be a buyer in this region with a 2127 wider stop.
EUR/USD
The Euro traded lower to my 1.1200 buy level and again as I had so many open positions at that time I emailed my Platinum Members to exit this position at 1.1220 and I am still flat. With so many Fed Hawk Members speaking this afternoon we could well see the US Dollar appreciate and therefore I will now lower my buy level in the Euro to 1.1125/1.1160 with a 1.1085 stop. Despite the lack of volatility in the Euro, I still do not want to be short the market at this time.
December Dollar Index
I am still flat the Dollar and today I will raise my sell level to 96.10/96.50 with a 96.75 tight stop. The Dollar was the only call from yesterday that did not get executed.
December DAX
I am not having much luck with my DAX stops at this time as it seems that every time I put a stop in the DAX, the market takes out my stop before reversing course aggressively. Thankfully I know most members do not trade the DAX and those that do like me only trade this insane market in small size. Yesterday after I posted the DAX traded down in straight line to my 10310 buy level before literally a few minutes later stopping me out near the low of the day at 10265 and I am now flat. Deutsche Bank shares having been 3% lower reversed to rally over 4% in a few minutes which helped to calm the market and that calmness has continued this morning with Deutsche trading 4% higher. Today I will again look to buy the DAX on any dip lower to 10330/10380 with a 10285 stop. I still do not want to be short the market as there is no doubt that there is some Central Bank intervention to help the Deutsche shares trade higher.
December FTSE
My FTSE plan also worked well with market trading lower to my average buy level at 6742 before having a nice rally which enabled me to cover this position too early at 6766 and I am now flat. Today I will again look to buy the market on any dip lower to 6760/6790 with a 6725 stop which is just below yesterday’s low print. With Quarter End due on Friday, I do not want to be short the market at this time.
Dow Rolling Contract
My Dow plan also worked well with the Dow also trading into my buy range before also reversing course to trade higher. As I had so many positions on board at the same time I waited to buy the Dow at my 18070 buy level before emailing my Platinum Members after buying the market to exit this position at 18125 and thus reduce our risk. I am still flat and it is amazing that the amount of so called experts who are looking for the stock market to roll over. As I keep saying time after time that the charts will tell us when it is time to sell the Dow and until that time arrives this market is still a buy on dips. The McClellan Oscillator improved slightly yesterday but still closed with a negative 16 print. Today the Dow is rallying strongly as I write this commentary and I will now look to buy the market on any dip lower to 18110/18175 with a 18040 stop which is just below yesterday morning’s low print.
December BUND
Thankfully I lowered my stop on my short 165.20 position to 165.48 which was filled just as I posted yesterday morning. Subsequently the BUND rallied strongly to my second sell level at 166.20. Again given the amount of open positions at the one time I covered this position at my revised 165.95 T/P level and I am now flat. Today I will again look to sell the Bund on any rally higher to 166.30/166.60 with a 166.85 tight stop.
Gold Rolling Contract
Gold initially hit my 1325 buy level before having a small rally back over 1330. As I was long the Euro at the time and still long Silver I emailed my Platinum Members to exit this position at 1328 and I am now flat. With Silver also under pressure this morning my only interest in buying Gold is on a further dip lower to 1308/1316 with a 1299 stop.
Silver Rolling Contract
No change as I am still long Silver at 19.63 with the same 18.95 stop. If I am stopped out of this position I will be a more aggressive buyer on any dip lower to 18.50/18.80 with a 17.95 stop which is just below the major 18.00/18.30 support level.
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