U.S. Indexes closed lower on Tuesday, albeit off morning lows, as the escalating Middle Eastern conflict continues to dominate trade, and newsflow. The Israel/Iran/US war shows no signs of slowing down, as from all sides the attacks continued far and wide, with Iran continuing to attack US bases in the Middle East; Axios reported that the UAE is considering taking military action to stop Iranian missile and drone strikes on the country. Note, reports suggested Iran hit the US consulate in Dubai. As such, WTI and Brent saw extensive gains, but are currently well off earlier peaks as US President Trump confirmed actions to attempt to resume shipping in the Strait of Hormuz, which is currently “closed”. Trump said, effective immediately, US is to provide political risk insurance and guarantees (at a very reasonable price) for financial security of all maritime trade, especially energy, travelling through the Gulf, and if necessary, US Navy will begin escorting tankers through the Strait of Hormuz, as soon as possible. Prior to this, and in this morning trade, Bloomberg’s Javier Blas wrote an article titled, “The US Has to Reopen the Strait of Hormuz as Soon as Possible”, and within it said, “whether Trump wins the Third Gulf War will depend a lot on whether the Pentagon can effectively reopen the Strait of Hormuz for oil shipping, and soon. The American military does not have weeks to do so — only days”. Elsewhere, the Dollar saw heavy gains, again, to the detriment of G10 FX peers as Antipodeans lagged given the risk environment and also heavy metal selling, while the Canadian Dollar was the clear G10 outperformer, and even eked out gains versus the US Dollar amid the surge in oil prices. As mentioned, spot Gold was heavily sold, and briefly breached USD 5000/oz to the downside. Treasuries ultimately settled flat in two-way trade as eyes remain glued to the Middle East, and while there was no data yesterday, there was plenty of Fedspeak, but for obvious reasons took a back seat. In summary, Williams (voter, neutral) said further cuts will be warranted if inflation ebbs, policy is currently well-positioned. Schmid (2028 voter, hawk) opposes further cuts. Kashkari (2026 voter, neutral) said policy is in a good place; it is too soon to assess the impact of the Iran conflict on inflation, but it could have an impact on monetary policy. Meanwhile, reports in FT suggested that Fed Chair Nominee Warsh’s attempt to shrink the balance sheet would proceed only slowly due to resistance over his plan. However, he would be unlikely to push for a return to the size of the Fed’s balance sheet before it ballooned in response to the 2008 financial crisis. For the record, all sectors were in negative territory with Materials and Industrials sitting at the bottom of the pile. Ahead, traders, of course, await Middle Eastern updates which shows no sign of slowing down. Elsewhere, Oil closed higher by 3.55% while a well overdue correction saw Gold end Tuesday’s session with a 4% fall.
To mark my 3325th 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 546 points yesterday and is now ahead by 2001 points for March having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points 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 0.94% lower at a price of 6816.
The Dow Jones Industrial Average closed 403 points lower for a 0.83% loss at a price of 48,501.
The NASDAQ 100 closed 1.09% lower at a price of 24,720.
The Stoxx Europe 600 Index closed 3.08% lower.
Yesterday, the MSCI Asia Pacific closed 1.8% lower.
Yesterday, the Nikkei closed 3.06% lower at a price of 56,279.
Currencies
The Bloomberg Dollar Spot Index closed 0.66% higher.
The Euro closed 0.56% lower at $1.1619.
The British Pound closed 0.32% lower at $1.3364.
The Japanese Yen fell 0.12% closing at $157.52.
Bonds
U.K.’s 10-Year Gilt closed 10 basis points higher at 4.41%.
Germany’s 10-Year Bund Yield closed 2 basis points higher at 2.74%
U.S.10 Year Treasury closed 1 basis points higher at 4.06%.
Commodities
West Texas Intermediate crude closed 3.55% higher at $73.76 a barrel.
Gold closed 3.85% lower at $5118.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Services PMI at 8.55 am, 9.00 am and 9.30 am respectively. Next, we have Euro-Zone Unemployment and PPI at 10.00 am. This is followed by U.S. ADP Employment at 1.15 pm and Composite PMI at 2.45 pm. Finally, we have ISM Non-Manufacturing PMI at 3.00 pm.
Cash S&P 500
The S&P closed on Tuesday with a loss of 1% well off its 6710 (-2%) low which occurred shortly after the cash markets opened. Crucially for bulls, the S&P again managed to close over its key 6800 support level. At present, the S&P appears to be transitioning between peak escalation and the early stages of conditional signalling. Markets are pricing in a more prolonged engagement than they were on the initial strike. Oil has broken higher, equity markets have surrendered short-lived stabilisation and defensive flows have accelerated. Historically, this is the stage at which pessimism becomes broadly embedded in positioning. However, it is also the stage at which negotiation probability quietly increases beneath the surface, and the smart money begins searching for deals. This is largely evidenced by the current price action in Silver and Gold. Both commodities are down sharply, with Silver falling over 20% in 24 hours, even as risk premiums are being priced in across the board. This is a clear signal that a rush to the sidelines has begun and holding cash is being viewed as a clear safe-haven trade. Meanwhile, smart money is watching these flows. There are three primary scenarios to watch over the coming weeks: In the first scenario, escalation intensifies briefly, pushing oil higher and the S&P lower, before a sudden shift in language induces negotiation headlines. In this outcome, markets reverse sharply as positioning proves over defensive. In the second scenario, the conflict continues in a controlled but persistent manner. Oil remains elevated but does not spike dramatically. Equity Markets trade with elevated volatility while awaiting clarity. Resolution arrives later in the month after extended pressure. In the third scenario, regional escalation broadens significantly, including material disruption in shipping lanes or direct confrontation involving additional Countries. This would drive oil prices towards $100 and force deeper repricing across global risk assets. Based on historical precedents and the fact it is a crucial mid-term election year I view this outcome as a lower probability. Ultimately, do not forget that every conflict involving President Trump since his inauguration 13 months ago has ended with a ‘’DEAL’’. Yesterday, my S&P plan worked well as the market traded the whole of my buy range for a 6792 average long position before rallying to my revised 6813 T/P level and I am now flat. With the ‘’Fear & Greed Index’’ closing at 32 last night I have no interest in chasing the market lower as I patiently wait to buy the dip. Today, my buy level will be from 6725/6750 with a lower 6699 ‘Closing Stop’. If I am taken long, I will have a T/P level at 6799.
EUR/USD
The rally in the Dollar finally saw the Euro hit my second buy level at 1.1630 for a now 1.1670 average long position. I will now lower my T/P level to 1.1695 while leaving 1.1575 ‘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
The Dollar surged again on Tuesday morning, hitting my sell range for a now 99.60 short position. I will now raise my T/P level to 98.90. Meanwhile, I will continue to look to add to this position on any further move higher to 100.30 with now higher 100.95 ‘Closing Stop’. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
My 2660 short Russell position worked well as the market traded lower to my 2620 T/P level and I am now flat. The Russell has support below from 2480/2550 where I will be a buyer with a 2415 wider ‘Closing Stop’. If I am taken long, I will have a T/P level at 2605. I no longer want to be short the Russell at this time.
FTSE 100
Both the FTSE and European Indexes got hammered on Tuesday, closing lower by over 3%. Thankfully we had no buy levels in any of these markets. The FTSE has support below from 10280/10380 where I will be a small buyer with a 10195 ‘Closing Stop’. If I am taken long, I will have a T/P level at 10470. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
My Dow plan worked well. The market traded the whole of my buy range for a 48060 average long position before rallying 500 points. This move higher saw my revised 48196 T/P level triggered and I am still flat. Just like the S&P above the Dow also closed over key support at 48200. Today, I will again be a buyer on any further dip lower to 47700/48000 with a lower 47495 ‘Closing Stop’. If I am taken long, I will have a T/P level at 48310. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
My NDX plan worked well as the market traded the whole of Tuesday’s buy range for a 24470 average long position before rallying to my revised 24630 T/P level and I am now flat. The NDX has support below from 24230/24480 where I will again be a buyer with a lower 24095 ‘Closing Stop’. If I am taken long, I will have a T/P level at 24710.
December BUND
I am still flat. The Bund sold off initially before staging a late rally into the European Close. Today, I will again be a seller from 130.15/130.95 with the same 131.65 ‘Closing Stop’. If triggered, I will have a T/P level at 129.65.
Gold Rolling Contract
Hindsight is a wonderful thing. I should trusted my extinct more, especially with Gold closing above the Daily Bollinger Band on Monday evening instead of exiting Monday’s short position too early. Gold briefly traded below 5000 yesterday afternoon, before rallying $120 off this low into the New York close. Gold has strong support below from 4700/4800 where I will be an aggressive buyer with a 4595 ‘Closing Stop’. If triggered, I will have a T/P level at 5970.
Silver Rolling Contract
Silver has now fallen over 20% from Monday’s high at 96.80. This is a huge move lower catching many long positions in the process. Silver just missed yesterday’s buy range before rallying into the close and I am still flat. Today, I will lower my buy level to 73.50/76.00 with the same 71.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 79.35
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