U.S. Equity Markets closed higher yesterday, led by the Dow’s late rally to close with a gain of 0.37%. The Labour Department reported that Weekly Jobless Claims dropped to their lowest level since the onset of COVID-19. Another 340,000 individuals filed for initial jobless claims in the week ending August 28 versus the previous week’s upwardly revised 354,000. This suggests economic activity is continuing to rebound thanks to the $2.8 trillion in COVID-19 aid passed by Congress in December and March. If another $1 trillion is passed in the Senate, it could help this trend to continue. Meanwhile, the Labour Department explained that the U.S.’s second-quarter nonfarm productivity was revised lower from 2.3% to 2.1%. The U.S. Trade Deficit narrowed more than anticipated as well in July due to declining imports amid supply-chain shortages and a shift in spending from goods to services. European Markets again closed mixed. European Central Bank Governing Council member Bostjan Vasle said the central bank should not rush into changing policy based on “one-off” inflation metrics. Investors expect the European Central Bank will outline plans next week to ease COVID-19-induced sovereign bond purchases and focus on expanding Quantitative Easing. Euro-Zone producer price index (“PPI”) data for July was better than expected due to rising energy prices. The European Union also reported that COVID-19 vaccinations increased to 538.4 million yesterday, with more than 254.4 million individuals having been fully immunised. In Asia, The People’s Bank of China explained that it would offer $46.5 billion worth of low-cost funds for banks to lend to small and medium-sized enterprises. Japanese Prime Minister candidate Fumio Kishida said he would pursue a government spending package valued in the tens of billions of dollars to support economic growth. The U.S. Treasury Department said private Chinese equity fund Wise Road Capital’s purchase of South Korean semiconductor manufacturer Magnachip Semiconductor posed national-security risks. Bank of Korea Governor Lee Ju-yeol highlighted that the economy will likely remain strong, fuelled by increasing COVID-19 vaccinations and steady demand for manufactured goods. Elsewhere, Oil rose 1.65% after the White House promised to maintain gasoline production in the wake of Hurricane Ida, while Bitcoin closed 2.5% higher after El Salvador announced that it plans to start using Bitcoin as its national currency.
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For anyone following my Platinum Service it made 50 points yesterday, and is now ahead by 255 points for September, having closed August with a gain of 1543 points, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, having ended March with an impressive gain of 3769 points, 3286 points in February, 2077 points in January, and 2273 points last December. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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The S&P 500 closed 0.28% higher at a price of 4537.
The Dow Jones Industrial Average closed 131 points higher for a 0.37% gain at a price of 35,443.
The NASDAQ 100 closed 0.06% lower at a price of 15,604.
The Stoxx Europe 600 Index closed 0.3% higher.
This morning, the MSCI Asia Pacific Index rose 1.1%.
This morning, the Nikkei closed 2.01% higher at a price of 29,117
The Bloomberg Dollar Spot Index closed 0.3% lower.
The Euro closed 0.3% higher at $1.1875.
The British Pound closed 0.4% higher at 1.3835.
The Japanese Yen fell 0.1%, closing at $110.01.
Germany’s 10-year yield closed one basis points lower at -0.38%.
Britain’s 10-year yield closed one basis points lower at 0.68%.
US 10 Year Treasury closed one basis points lower at 1.28%.
West Texas Intermediate crude closed 1.65% higher at $69.67 a barrel.
Gold closed 0.24% lower at $1,811.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and UK Markit Services PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed by Euro-Zone Retail Sales at 10.00 am. Next, at 1.30 pm we have U.S. Non-Farm Payrolls, where the expectation is for an increase of 750K. At the same time we will see the Unemployment Rate and Average Earnings. Finally, we have Markit Services PMI and ISM Manufacturing at 2.45 pm and 3.00 pm respectively.
September S&P 500
The fact that the ECB and Fed have added a combined $1 trillion to their balance sheets since June has really shocked me. It is no wonder that European and U.S. Indexes are making new highs every week. It is interesting that Equity Markets that are not under control of the ECB and Fed are performing much weaker. Just when it looked like two weeks ago the S&P was going to break the key 4350 support level, we saw a wave of magical buying that helped the S&P to sit at a new all-time high at 4545 this morning. The Monthly 14 Day RSI now stands at 79 for the S&P while the Monthly NASDAQ is even higher at 82.50. Bear Markets have now been eliminated with new highs every year. We saw an Earnings recession in 2015 and 2016, yet the S&P made new highs in both years. No Earnings growth in 2019 resulted in a 30% gain for the S&P. 2020 saw Negative Earnings growth still we got new highs. And this year we have transitioned into a phase where we make new highs every single month, week and now virtually every day. I know ‘’markets can remain illogical longer than I remain solvent’’ but this is getting ridiculous. Today, we have the Payroll Report. If we get a weak number it will give Powell another reason not to taper and the S&P will march higher. I will continue to sell the rallies with tight stops and not to be greedy with taking gains. The S&P has strong resistance from 4552/4567 where I will be a seller with a higher 4581 ‘’Closing Stop’’. I will now raise my buy level to 4495/4510 with a 4483 ‘’Closing Stop’’. Yesterday the S&P plan worked well with the market hitting my 4540 sell level before falling 12 Handles, enabling me to cover this position at my 4535 revised T/P level. If I am taken short today, I will have a T/P level at 4540. If I am taken long I will have a T/P level at 4520.
The Euro rallied again yesterday as thankfully we have had no sell levels in the Euro over the past two weeks. I will now raise my buy level to 1.1780/1.1820 with a higher 1.1745 stop.
September Dollar Index
The Dollar has fallen 140 points this week which is a sizeable move for a contract that spent most of the summer trading in narrow ranges. The Dollar has support from 91.40/91.80 where I will be a buyer with a 90.95 stop.
Since Tuesday’s Downside Key Day Reversal, the DAX has struggled to regain these losses, despite new highs in both the S&P and NASDAQ. However, I am reluctant to go short until we break the key 15600 support area. Today, I will continue to be a buyer from 15570/15650 with the same 15495 stop.
No Change. I am still a buyer from 7030/7080 with a lower 6985 stop.
Dow Rolling Contract
The Dow was the strongest of the U.S. Indexes yesterday as the market waits for the NFP data at 1.30 pm ahead of the long weekend with markets closed on Monday for the Labour Day Holiday. The Dow has strong resistance from 35800/36000 where I will be an aggressive seller with a 36175 ‘’Closing Stop’’. I will now raise my buy level to 35120/35270 with a higher 34945 ‘’Closing Stop’’.
The NASDAQ missed my 15690 sell level by 10 points before falling 100 points and I am still flat. Ahead of the NFP data I will now raise my sell level slightly to 15710/15800 with a 15905 ‘’Closing Stop’’. I still do not want to be long the NASDAQ at this time.
I am still flat as I continue to be a small seller on any further rally to 175.95/176.45 with a tight 176.81 stop.
Gold Rolling Contract
No Change. I am still a buyer from 1775/1790 with the same 1763 stop.
Silver Rolling Contract
Silver is struggling to break the key 24.50 resistance area and I am still flat. I will now lower my buy level to 22.70/23.30 with a lower 22.35 stop.