U.S. Equity Markets rebounded and the US Dollar fell after Federal Reserve Bank of New York President John Williams highlighted the need for swift action should policy makers conclude the economy is in trouble. The S&P 500 Index erased losses, led by consumer and financial stocks, while Treasury 10-year yields dropped. A positive outlook from Apple Inc. supplier’s Taiwan Semiconductor Manufacturing Co.’s lifted chipmakers. Philip Morris International Inc. and International Business Machines Corp. rallied after earnings beat forecasts. The NYSE FANG+ Index slid on Netflix Inc.’s surprise loss of U.S. customers. A report that Iran made a “substantial” offer on its nuclear program in return for fewer sanctions gave a lift to equities that was later tempered by news that the U.S. Navy shot down an Iranian drone.
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For anyone following my Platinum Service it made 40 points yesterday and is now ahead by 718 points for July, having made 1346 points in June,1722 points in May, 955 points in April, 1027 points in March, 1013 points in February and 1671 points in January. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Investors have fully priced in a Quarter-Point rate cut by the Fed later this month. While that’s the likeliest outcome, there’s also a “meaningful chance” of a half-point reduction. Fed Vice Chairman Williams said “you don’t want to wait” for the economy to turn down to act. Meanwhile Fed Member Bullard said Cutting U.S. interest rates could help cushion some of the blow from uncertainty about trade that’s likely to prove persistent. The S&P 500 reversed earlier losses to close 0.4% higher at 2,995. In Europe the Stoxx Europe 600 Index decreased 0.2%. while the FTSE closed 0.3% lower on a higher Pound.
Here is a summary of the main changes in F.X. Markets:
The Bloomberg Dollar Spot Index dipped 0.5%.
The Euro gained 0.5% to $1.1276, on growing speculation that the U.S Administration would prefer a weaker US Dollar.
The British Pound climbed 1% to $1.2554 as the British Parliament backed measures to prevent the next Prime Minister suspending the legislature to pursue a no-deal Brexit
The Japanese Yen added 0.6% to 107.26 per dollar.
Bullish comments from the Fed’s Williams and Bullard saw Treasury Yields fall with 10-year Treasuries dipping two basis points to 2.03%. Meanwhile in Europe Germany’s 10-year yield declined two basis points to -0.33% while Britain’s 10-year yield was unchanged at 0.759%.
The Bloomberg Commodity Index dipped 0.8%. Following the move lower in the US Dollar and the shooting down of the Iranian Drone, Gold rallied $30 off its intra-day low of $1415 to close near year-to-date highs at $1445. Elsewhere, oil slid to the lowest in almost a month as pessimism about a trade truce between the U.S. and China continued to dog markets, while the resumption of Russian pipeline flows fed worries about a supply glut. West Texas Intermediate crude declined 2.6% to $55.30 a barrel.
This morning on the Economic Front we have German Producer Prices at 7.00 am and this is followed at 9.00 am by Euro-Zone Current Account. Finally, we have the Michigan Consumer Sentiment Index at 3.00 pm.
September S&P 500
It is extremely difficult to be short US Indices for any length of time. Everytime we look like the market is going to break lower we get a positive comment from one of the Fed Members. As long as the S&P can hold the key 2950/2965 support area then the market will continue to be a buy on dips. Today I will raise my buy level to 2978/2988 with a 2971 stop. If I am taken long and subsequently stopped out of this position I will be a more aggressive buyer from 2952/2962 with a 2943 stop. Ahead of the weekend I do not want to be short the market at this time.
My Euro plan worked well with the market trading lower to my 1.1210 buy level before rallying to my revised 1.1230 T/P level with a 1.1280 high print. In my opinion it is only a matter of time before the US Dollar has a meaningful sell-off and today I will again look to buy the market on any dip lower to 1.1190/1.1230 with a 1.1155 stop.
September Dollar Index
I am still flat the Dollar and today I will again lower my buy level to 95.40/95.80 with a 95.05 stop. The Dollar has strong support at 95.50 and this level should lead to a decent rebound on any test.
My DAX plan worked well with the market trading lower to my 12190 buy level shortly after the market opened before rallying to my 12225 T/P level and I am now flat. Today I will again look to buy the DAX on any dip lower to 12130/12190 with the same 12075 stop.
No Change as I am still long the market from late Wednesday at 7445 with the same 7405 stop and 7465 T/P level. A strong rebound in the Pound is weighing on the FTSE. 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 fell shy of my 26980 buy level with a 27068 low print before turning around and rallying over 200 points off this low. Today I will move my buy level higher to 26940/27090 with a 26870 tight stop. My only interest in selling the Dow is still on a rally higher to 27420/27550 with a 27650 stop.
Late in the New York session the NASDAQ spiked higher to my 7930 sell level before selling off to my revised 7910 T/P level and I am now flat. The NASDAQ has strong resistance from 7985/8025 and I will be a seller in this area with a 8070 tight stop.
My short 173.00 Bund position did not work well as I was stopped out of this position at 173.35. Subsequently I emailed my Platinum Members to go short again at 173.40. I am still short and I will add to this position on any further move higher to 173.90 with a tight 174.20 stop. I will move my T/P level higher on this position to 173.20 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Frustratingly Gold missed my 1413 buy level with a 1414.50 low print before rallying $30 into the close. Today I will move my buy level higher to 1418/1428 with a 1411 stop which is just below yesterday’s low.
Silver Rolling Contract
Silver just missed my 15.95 buy level with a 15.97 low print after I posted yesterday morning and I am still flat. Today I will move my buy level higher to 15.80/16.20 with a 15.45 tight stop.