U.S. Equity Markets surged for the second consecutive trading session, led by the 1.21% gain in the S&P, helping the VIX to close lower by a further 4% at a price of 22.23. Markets rose Thursday as the Bureau of Economic Analysis (“BEA”) confirmed a second consecutive quarter of negative gross domestic product (“GDP”) growth. Markets rallied on the notion that bad economic news confirms the bulk of the bear market is behind us. Initial Jobless Claims continue to rise, suggesting that the labour market is beginning to feel the effects of an economic downturn. U.S. mortgage rates dropped for the first time in three weeks despite a slowing housing market. Investors look ahead to the BEA’s personal consumption expenditure figures this afternoon, as well as the University of Michigan’s Consumer Sentiment Index. Better earnings and guidance from Apple sees the NASDAQ Futures trading 1.25% higher this morning. Within the S&P 500, 10 of 11 sectors finished higher. European Markets also closed higher. Markets responded positively to the Federal Open Market Committee’s policy decision on Wednesday. The Euro lost ground to the Dollar as the Fed continues to outpace the ECB with rate hikes. German inflation remains high but is showing signs of slowing down. Euro-Zone Economic Sentiment deteriorated to 99.0 – its lowest level since February 2021. However, certain manufacturing indicators show that the production of goods, including cars, could be recovering. In Asia, Markets finished the day higher. Indian tech stocks led the surge, as talks of further rate hikes encouraged investors. Chinese banks are working to boost capital before many companies default on bad loans. Japan faces a new wave of COVID-19 outbreaks, dimming hopes of improved economic activity. Deputy Governor Masayoshi Amamiya confirmed the Bank of Japan’s intention to ease monetary policy as inflation remains higher than its 2% target. Overnight the Yen has soared, rallying nearly 2% against the U.S. Dollar. Elsewhere, Oil fell 0.17% while Gold also surged, closing higher by 1.31%.
To mark my 2600th issue of TraderNoble Daiy 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 lost 1282 points yesterday and is now ahead by 2660 points for July after closing June with a gain of 3371 points June, while making 3651 points in May, having made 762 points in April, following a gain of 5883 points in March. The Platinum Service made an impressive 5324 points in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 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 1.21% higher at a price of 4072.
The Dow Jones Industrial Average closed 332 points higher for a 1.03% gain at a price of 32,529.
The NASDAQ 100 closed 0.92% higher at a price of 12,717.
The Stoxx Europe 600 Index closed 0.8% higher.
This morning, the MSCI Asia Pacific Index rose 0.7%.
This morning, the Nikkei closed 0.24% lower at a price of 27,748.
Currencies
The Bloomberg Dollar Spot Index closed 0.5% lower.
The Euro closed 0.2% higher at $1.0215.
The British Pound closed 0.3% higher at 1.2193.
The Japanese Yen rose 1.7% closing at $133.24.
Bonds
Germany’s 10-year yield closed 11 basis points lower at 0.84%.
Britain’s 10-year yield closed 8 basis points lower at 1.87%.
US 10 Year Treasury closed 13 basis points lower at 2.66%.
Commodities
West Texas Intermediate crude closed 0.17% lower at $99.35 a barrel.
Gold closed 1.31% higher at $1754.10 an ounce.
This morning on the Economic Front we have German Unemployment and GDP at 8.55 am and 9.00 am respectively. This is followed by U.K. Consumer Credit, Net Lending to Individuals, Mortgage Approvals and Money Supply at 9.30 am. Next, we have Euro-Zone GDP and Inflation at 10.00 am, followed by U.S. Personal Income/Spending and PCE at 1.30 pm. Finally, we have the Chicago Purchasing Managers’ Survey and University of Michigan Consumer Sentiment Index at 2.45 pm and 3.00 pm respectively.
Cash S&P 500
Yesterday’s U.S Q2 GDP Report confirming a recession in America based on two negative Quarterly GDPs saw the S&P surge. The S&P is now trading over 230 Handles higher from Tuesday’s 3911 Bear Trap low. Shorts are hating this rally and are really peeved with Powell for talking about slowing rate hikes and making future rate hikes dependent on inflation reports which we know will come down substantially in the months ahead. The NDX alone is up over 7% this week as Bond Yields have been crushed, making it clear that the market is no longer taking the Fed’s Fund Rate forecast of 3.8% seriously. 10-Year Treasuries are trading 90 basis points lower since the June high of 3.53%. I was lucky yesterday as the S&P hit an afternoon low at 3992, enabling me to cover my 4012 short position at my revised 4003 T/P level and I am now flat. Subsequently, the S&P rallied over 100 handles helped by better earnings from both Amazon and Apple. However, we are short-term overbought. The McClellan Oscillator closed at +257 last night so I am wary of any long positions at this time. Similarly, the two-hour chart is as overbought as it was at the end of May when it chopped around for a few days before the S&P subsequently sold off 7% in the first few days of June. Given how overbought the signals are a nice sell-off would then see us look to set up a long position for August before we run into the difficult September/October time frame. The S&P has resistance from 4108/4128 where I will be a strong seller with a 4143 ‘’Closing Stop’’. The S&P has support from 4020/4040 where I will be a small buyer with a wider 3999 ‘’Closing Stop’’.
EUR/USD
My Euro plan worked well with the market trading lower to my 1.0150 buy level before rallying back above 1.0230, enabling me to cover this position too early at 1.0180 and I am still flat. I am surprised that the Dollar is not weaker given the surge in stocks but when you look at the German Bund, trading at a yield of just 83 basis points, it is understandable why the Euro is not higher. Today, I will again be a buyer from 1.0110/1.0170 with the same 1.0065 stop. I still do not want to be short the Euro at this time.
March Dollar Index
My Dollar plan worked well with the market trading higher to my 106.70 sell level before selling off to my 106.25 T/P level and I am now flat. This morning the Dollar is lower at 105.50 given the surge overnight in the Japanese Yen. The Dollar has fallen almost 4% in two weeks which is a huge move. The Dollar has support from 104.40/105.00 where I will be a buyer with a 103.55 stop. If I am taken long I will have a T/P level at 105.55.
Cash DAX
Frustratingly, the DAX again missed yesterday’s buy level before following the American Indexes higher. At least we are not short. This morning the DAX is trading higher at 13350. We have short-term resistance from 13450/13550 where I will be a small seller with a 13615 tight stop. I do not want to be long the DAX ahead of the weekend.
Cash FTSE
My 7380 short FTSE position worked well with the market trading lower to my 7345 T/P level and I am still flat. The FTSE is trading heavy, getting no uplift from the S&P’s overnight rally. We have resistance from 7415/7465 where I will again be a seller with a 7505 tight stop.
Dow Rolling Contract
My Dow plan worked really well yesterday as the market sold off to my 32020 buy level before surging 600 points. This move higher saw my 32270 T/P level triggered and I am still flat. The Dow is overbought but as you know I hate selling on a Friday especially as the price action is very similar to what we saw in the last two weeks of March when the Dow rose almost 3000 points. The Dow has support from 32100/32350 where I will be a small buyer with a 31995 tight ‘’Closing Stop’’. The Dow has now closed over its 50 Day MA for the eight consecutive session. This support level is now becoming more and more important. However, we are seeing some negative divergence at this morning’s highs so a small pull back makes sense before we see the next leg-up. I have no interest in chasing the Dow lower. Surprisingly, the ‘’Fear & Greed Index only rose slightly last night, closing at 39 which is still a reading of ‘’Fear’’. A 50 print is neutral and when this happens it should propel the Dow higher given the level of bearishness amongst traders and Fund Managers.
Cash NASDAQ 100
The NDX continued to build on Wednesday’s melt up hitting my 12650 exit level on my foolishly 14327 long position from April. It was a timely day to exit this position given the points made elsewhere on top of what has been an excellent July. This morning the NDX is trading even higher at 12900. I am going to stay flat as I do not want to buy the market here or do I want to be short over the weekend. If the NDX dips I will come back to my Platinum Members with a new buy level.
September BUND
My Bund plan did not work well yesterday as the market rallied over 300 points off its morning low. I went short at an average rate of 156.40 before being stopped at 157.35 and I am now flat. This morning the Bund is trading slightly lower at 157.15. I have never seen such a rally in the Bund is such a short period of time. The market is now telling the ECB that there will only be a couple of more rate hikes before like the Fed going on ‘’Hold’’. The Bund is severely overbought. I will be a small seller from 157.70/158.50 with a 159.05 stop. If I am taken short I will have a T/P level at 156.85.
Gold Rolling Contract
Gold surged yesterday and is now trading $80 higher off its 1680 low this week. I will now move my buy level higher to 1720/1735 with a 1709 ‘’Closing Stop’’.
Silver Rolling Contract
For the second consecutive trading session, Silver has surged over 4% and unfortunately I have not been long for this move higher. This morning Silver is trading at 20.08. I have bought the market here with a tight 19.55 stop. My T/P level on this position will be 20.95 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
There will be no Daily Commentary on Monday due to a Bank Holiday in Ireland. Any of my calls that are not hit today and subsequently get triggered on Monday, will see me come back with an updated email for my Platinum Members.
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