It has been a very quiet past 24 hours for markets, the DXY and BBDXY making some net gains, but more from commodity currency weakness. The CAD, the NZD, and the AUD all lower by 0.25-0.35%. Oil prices have taken a small breather after the heady gains of late, the overnight world dairy auction saw lower prices, while base metals and even Gold have are down. Iron ore was too (the main benchmark price by $0.70/t to $62.66 after the stronger rise the day before) while met coal rose $2.25/t t0 $182.75. US bond yields are virtually unchanged, 2s up 0.4 bps and 10s down 1.1 bps in tight trading ranges. Equity markets have been soggy.
To mark my 1450th 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. This offer is open to both new and existing members and if anyone is interested in this offer can you please contact me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 56 points yesterday and is now ahead by 101 points for November, having made 657 points in October, 447 points in September, 1560 in August, 1096 in July, 1023 in June, 1076 in May, 1375 in April, 1335 in March, 1481 in February and 1734 in January. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points.
Rather than geo-political risk re-emerging this week as the market might have been expecting as President Trump travels through Asia, he appears to have softened his stance towards North Korea. He suggested that the rogue state should negotiate a deal “that’s good for the people of North Korea and the people of the world” – a stark contrast to his earlier “fire and fury like the world has never seen”.
Elsewhere, OPEC has released its annual oil outlook, upping its forecast estimates for US tight oil production by 56%. There is also a story of dissent in the ECB over open ended QE, Weidman, Villeroy and others rattling the cage. Not that such a story would surprise too many. Lautenschlaeger said yesterday she opposed not putting an end date to ECB bond buying. The Euro has recovered the ground it lost during yesterday’s afternoon session.
After hitting its peak of around 0.7690 in the lead up to the RBA Board decision yesterday, it has generally been one way traffic since, pre-Board buying reversed on little in the way of a material change to the RBA statement (not that it was expected to be that different) and then some further softness coming from headwinds stemming from most commodity prices .Chinese trade figures are out today, something the Aussie can relate to.
It has been a similar swing up, then lower in the NZD. The swing up came from RBNZ Acting Governor Spencer and NZ Finance Minister Robertson signing an unchanged Policy Targets Agreement, the Minister releasing the terms of reference for a review of the RBNZ Act. These were as foreshadowed, including the best way the Bank to give due consideration to maximising employment alongside the price stability framework and introducing a committee-based approach.
The dairy auction overnight saw prices down 3.5%, the third decline in such fortnightly auctions, risking lower payouts to NZ dairy farmers. After trading at 0.6950 yesterday, it’s tested below 0.69 overnight before steadying.
This morning on the Economic Front we have no European or UK data of note while this afternoon we also have no US data either which is very unusual to say the least. We do have Canadian Housing Starts and Building Permits at 1.15 pm and 1.30 pm respectively. Bank of Canada Governor Poloz has been speaking in Montreal late yesterday and still sounding like policy will be on hold now for a while. The Canadian dollar has been a touch weaker, but this happened before his speech after which the Canadian Dollar has been steady. He said that the BoC will be “cautious” adjusting the policy rate.
Meanwhile, we have President Trump’s continuing trip through Asia. Today, he is meeting with South Korean President Moon and he is also scheduled to address the South Korean parliament. The market is also now waiting for the US House version of tax reform.
December S&P 500
The S&P having rallied after I posted early yesterday morning to a new high at 2593.50 before selling off 10 Handles in what was another low volume trading session. I am still flat and given how overbought the market is trading I will only raise my buy level slightly to 2572/2578 with a 2566 wider stop. I will continue to be a seller into the round number resistance at 2600 with my sell range also unchanged from 2599/2606 with the same 2611 stop. Again if I am taken short and subsequently stopped out of this position I will be a more aggressive seller in front of 2618 with a wide 2628 stop.
EUR/USD
My Euro plan worked well with the market trading lower to my 1.1570 buy level with a 1.1554 low print before finally rallying back above 1.1590. In keeping with my theme of banking points when available I used this rally to cover this position at my revised 1.1581 T/P level and I am now flat. The Euro has strong support from 1.1510/1.1550 and today I will be a buyer on any dip to this area with a 1.1470 stop. If I am taken long and subsequently stopped out of this position I will be an aggressive buyer from 1.1390/1.1450 with a 1.1345 wider stop.
December Dollar Index
Unfortunately the Dollar just missed my 95.15 sell level with a 95.08 high print before having a nice sell-off and I am still flat. Today I will now raise my sell level slightly to 95.20/95.55 with a 95.85 stop. Given how overbought the Dollar is trading I still do not want to be long the Dollar at this time.
December DAX
It has taken a few days but finally my DAX plan worked well with the market trading lower to my 13340 buy level before rebounding to my 13375 T/P level and I am now flat. I have been saying over the past few days that the price action was heavy and that certainly was the case in yesterday’s session. Today the DAX has strong support from 13225/13275 and today I will be a buyer on any dip to here with a 13180 stop. Despite the severely overbought condition I still do not want to be short the market at this time.
December FTSE
My FTSE plan also worked well with the market trading lower to my 7480 buy level before rallying 15 points. In keeping with my strategy of banking points when available I emailed my Platinum Members to exit this trade at my revised 7490 T/P level and I am now flat. The price action has been toppy in last few weeks which is a worry but given my DAX short experience last Wednesday I am reluctant to go short until we get a decent sell extreme in the market. Today the FTSE has strong support from 7400/7435 and I will be a buyer on any dip to here with a 7370 stop.
Dow Rolling Contract
I am reluctant to chase this market higher and today I will leave my buy level unchanged from 23365/23435 with a 23310 stop. Given how overbought we are trading I still do not want to be short the market at this time.
December NASDAQ
Unfortunately the NASDAQ also just missed my 6345 initial sell level before having a nice drop and I am still flat. However I am not going to chase this market lower and my sell level will be a touch higher from 6375/6410 with a 6440 stop. I will also be a small buyer on any dip lower to 6225/6260 with a 6195 tight stop. A break and close below 6240 will be short-term bearish.
December BUND
The Bund also fell shy of my buy level before trading higher and I am still flat. Again I am reluctant to chase this market higher and will leave my buy level unchanged from 162.30/162.65 with a 161.95 same stop.
Gold Rolling Contract
Gold continues to meander in a sideways direction that has prevailed for most of the past two months and I am still flat. As I am back long Silver I will now lower my buy level in Gold to 1258/1265 with a 1251 stop.
Silver Rolling Contract
Late in yesterday’s trading session Silver traded lower to my 16.95 buy level. Just like Gold above I am now too enthused about Silver’s price action as the market needs to break and close above the 17.50/17.80 resistance area for me to turn more bullish. For today I will leave my T/P level unchanged at 17.05 and if this is hit I will be back with a new update for my Platinum Members.
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