Shortly after I posted early yesterday morning the RBA which is the Australian Central Bank cut its Cash Rate by 0.25% to 1.50%. However if it was their intention to weaken the Australian Dollar with its latest rate cut then this attempt failed with the AUD back above its pre-cut level within one hour of the announcement. The USD/AUD closed at 0.7637 in London, which is its highest level in three months and this is despite the USD/JPY closing below 101 on what proved to be the most volatile trading session across all asset classes since the Brexit Referendum.
To mark my 1100th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2500 for my Platinum Service which includes 1/4 updated emails throughout the trading day. This offer is open to both new and existing members and if anyone is interested please email me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 160 points yesterday on what was my first trading day of August following the Irish Bank Holiday on Monday and after making 1682 points in July. The previous four months saw gains of 2550, 1532 2175 and 2265 points respectively. Since I started my new Platinum Service in June 2015 it has averaged a monthly gain of over 2100 points.
The common denominator underneath yesterday’s currency moves is the US Dollar, which continues to leak lower in the aftermath of last week’s FOMC Statement and Friday’s disappointing Q2 GDP numbers. The Atlanta Fed’s Dennis Lockhart who is a current non-voter and considered neither a hawk or dove, came out late yesterday evening saying that consumer activity remains very strong and that there’s a fair amount of data to come before the next Fed Meeting in September. But he has made scant impression on the US Interest Rate market or the US Dollar, albeit the Treasury Yield Curve had earlier bear steepened with the 10 Year closing another 3 bps higher. This is despite a risk-off trading yesterday led by fresh pummelling for European Bank shares and which sees the VIX a point higher at 13.37. This move so far is evidently not enough to support the US Dollar.
In announcing a 25bp cut yesterday morning the RBA concluded that ‘’prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing Monetary Policy at this meeting’’.
In other news the Fed’s Kaplan was speaking in Beijing just before lunch yesterday and he roiled the markets by stating that he only sees the Monthly Jobs increasing by 80K/120K per month. These comments added fuel to the already weakening Dollar with the EUR/USD closing over the key 1.1210 resistance level.
This morning on the economic front we have German, Euro-Zone and UK Composite/Services PMI at 8.55 am, 9.00 am and 9.30 am respectively. Next we have Euro-Zone Retail Sales at 10.00 am. This is followed by US Mortgage Applications and the ADP Employment Change at 12.00 pm and 1.15 pm respectively. Finally we have the US Composite PMI at 2.45 pm and the very important ISM Non-Manufacturing Composite at 3.00 pm.
September S&P 500
My S&P plan worked well yesterday with the market hitting my 2159 buy level shortly before lunch. As four of my markets had hit by that time I emailed my Platinum Members to cut this position at 2164 and I am still flat. Today is very important for economic data especially the Non-Manufacturing ISM at 3.00 pm and I will still be an aggressive buyer on any dip lower to 2133/2139 with a 2126 wider stop. Despite the market weakening over the past few days I really want to see the S&P close below 2120 before I will look to put a short position on board. The fact that we have the NFP on Friday is another reason for me not to go short the market.
EUR/USD
The fact that the Euro closed over the key 1.1210 resistance level could be significant. I am still flat the Euro which again has missed my buy level and today I will again increase my buy level to 1.1120/1.1160 with a tight 1.1085 stop. Naturally I still do not want to be short the Euro as to me and despite what the Fed members are saying from what I can see on the ground the US economy is slowing drastically as shown by just a 1% average growth for the first six months.
September Dollar Index
I am still flat the Dollar which continues to weaken following the non – event from the FED last week I am not going to chase this market lower and today I will only reduce my sell level slightly to 95.60/96.00 with a 96.40 stop.
September DAX
My DAX plan also worked well as after the market traded lower to my initial buy level at 10170 I emailed my Platinum Members to exit this trade at 10195 especially given the number of trades that we had ‘’open’’ at that stage and I am now flat. The DAX has very strong support at the 10050 level and today I will be a small buyer on any further dip lower to 10020/10070 with a 9975 tight stop. Given the extent of the move lower over the past few days I do not want to be short the market at this time.
September FTSE
My FTSE plan also worked well yesterday with the market trading lower to my 6595 buy level before having a nice rally to over 6620 which enabled me to cut this position at my revised 6615 T/P level. In this email to my Platinum Members I told them to re-buy the market on any dip lower to 6580 with a revised 6605 T/P level and both of these trades were executed before the close and I am now flat. The FTSE should continue to outperform the other major Indices ahead of tomorrow’s BoE rate announcement and today I will again look to buy the market on any dip lower to 6525/6555 with a 6495 stop.
Dow Rolling Contract
After exiting my other long stock Indices positions yesterday the Dow eventually hit my aggressive buy level at 18285 before having a nice rally into the close which enabled me to cover this position at my 18320 T/P level as I wanted to be flat ahead of the key European PMI data this morning. Today I will again look to buy the Dow on any dip lower to 18190/18250 with an 18130 stop. Just like the other Indices I do not want to be short the Dow at this time.
September Bund
The Bund traded weakly yesterday with the market hitting my average buy level at 166.80. I am still long and I will now leave stop unchanged at 166.35.
Gold Rolling Contract
The combination of the weaker stock markets and the stronger Yen continues to see Gold push higher. I am still flat and today I will again raise my buy level slightly to 1335/1343 with a 1329 tight stop.
Silver Rolling Contract
I am still flat Silver and today I will now raise my buy level to 19.90/20.40 with a 19.55 stop.
Recent Comments