U.S. Equity Markets rallied yesterday after China indicated it would not immediately retaliate against the latest American tariff increase. Treasuries edged down, while the US Dollar gauge hit a two-year high. The S&P 500 Index rose for the second straight day after a spokesman for China’s commerce ministry said that escalating the trade war won’t benefit either side and that it was more important to discuss removing the extra duties. Stocks across Asia trimmed declines on the remarks, while the Stoxx Europe 600 Index closed higher. Market sentiment remains delicate after President Donald Trump’s recent pronouncements on trade and as investors await resolution. Trump said Thursday ‘’that the U.S. and China are scheduled to have a conversation about trade today’’. U.S. economic growth slowed in the second quarter by more than initially reported, on weaker readings for categories including exports and inventories. Still, consumer spending remained robust, topping forecasts.
To mark my 1900th 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 firstname.lastname@example.org for details
For anyone following my Platinum Service it made 95 points yesterday and is now ahead by 2357 points for August, having made 1153 points in July, 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
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
Positive news on trade has investors looking to move back into some of the equity markets and maybe put a little more risk on after a dramatic and volatile month. The GDP number — while there was a slight pullback in second-quarter estimates, consumers still are looking strong. That is the key. The earnings component was very good — corporate profits are looking robust. As a result the S&P 500 Index increased 1.3% to close at 2925 while Dow rose 320 points to close at 26362.
In Europe the Stoxx Europe 600 Index increased 1% to near a four-week high with the U.K.’s FTSE 100 Index also closing with a gain of 1%.
Here is a summary of the main changes in F.X Markets:
The Bloomberg Dollar Spot Index rose 0.2% to the highest in almost two years.
The Euro declined 0.2% to $1.1057.
The British Pound fell 0.3% to $1.218.
The Japanese Yen fell 0.4% to 106.50 per dollar.
The Chinese mainland Yuan strengthened for the first time in 11 sessions.
The bond rally paused for breath after the yield on 30-year U.S. Treasuries sank to a record low of 1.90% Wednesday. Treasury Secretary Steven Mnuchin said issuing ultra-long U.S. Bonds is “under very serious consideration,” possibly setting up a move that would mark a historic revamp of the $16 trillion Treasuries market.
The Yield on 10-year Treasuries gained two basis points to 1.49%.
The Yield on two-year Treasuries advanced three basis points to 1.53%.
In Europe, Italy’s Bonds jumped and its Equities outperformed as the country moved toward forming a new government.
Germany’s 10-year Yield increased two basis points to -0.69%.
Britain’s 10-year Yield fell one basis point to 0.436%.
West Texas Intermediate crude increased 1.4% to $56.57 a barrel.
Gold fell 0.6% to $1,529.21 an ounce.
This morning on the Economic Front we already had the release of German Retail Sales which printed -2.2% versus -1.3% expected. At 9.30 am we have UK Mortgage Approvals, Money Supply and Consumer Credit, followed by Euro-Zone CPI and the Unemployment Rate at 10.00 am. Next, at 1.30 pm we have U.S Personal Income and Spending. Finally, we have the Chicago Purchasing Mangers’ Index and the University of Michigan Consumer Sentiment at 2.45 pm and 3.00 pm respectively.
September S&P 500
Despite the insane volatility witnessed in August it is very difficult to keep a short position on board as the authorities and Central Banks will do everything in their power to prevent a crash as they know that any major sell-off in Equity Markets will quickly turn major economies into a serious recession. Yesterday’s news that China opposes an escalation of the trade war announced just before I published saw the S&P trade the whole of my sell range for an average short position at 2919, which is 110 Handles higher than where we traded on the open of the markets last Sunday evening. Subsequently the S&P traded to a low of 2909 which hopefully gave you a chance to exit with a gain before the S&P traded sideways to higher into the close. Personally I covered my position at 2916 and I am now flat. As I mentioned yesterday the S&P has strong resistance at it’s 2945, 50 Day Moving Average and I will continue to be a seller on any further rally to 2952/2967 with a tight 2976 stop. All ‘’Open Gaps’’ in the S&P eventually get filled and we still have the 2954 Gap from August 4. The fact that the S&P closed over the key 2900/2914 support area is bullish and I will be a buyer on any dip to this area with a 2892 tight stop.
I am still flat the Euro as the market tests the 1.1050 area. Today I will lower my buy level slightly to 1.0980/1.1020 with a 1.0945 stop.
September Dollar Index
Late yesterday the Dollar finally traded higher to my 98.50 sell level. I am still short and I will now lower my stop on this position to 98.90. I will have a T/P level on this position at 98.20 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Thankfully we had no sell level in the DAX yesterday with the market closing at 11850 which is just below the key 12000 resistance area. Today I will raise my buy level to 11650/11720 with a 11595 tight stop.
The FTSE has rebounded nicely off the now key 7000 support area closing 1% higher for the second consecutive trading session. I am still flat and today I will move my buy level higher to 7060/7100 with a 7025 tight stop.
Dow Rolling Contract
Having broke the 200 Day Moving Average three times this month the Dow has recovered nicely to sit 700 points above this key area. On top of this we are now only 200 points below the 50 Day Moving Average which comes in at 26584 this morning. Yesterday after the Dow traded higher to my 26320 sell level the market made an afternoon low at 26220 before spending the rest of the session trading higher into the close. This small sell-off enabled me to cover this position at my revised 26270 T/P level and I am now flat. With the U.S Cash Markets closed on Monday for the Labour Day Holiday it is doubtful that after the month we have seen that many traders will want to hold a position over the long weekend. The Dow has short-term support from 26080/26230 and I will be a small buyer in this area with a 25995 tight stop. I will also be a seller on any further rally to 26600/26750 with a 26820 stop.
The NASDAQ never came close to my buy level before following the other US Indices higher and I am still flat. The NASDAQ has strong resistance from 7810/7860 and I will be a seller here with a 7905 stop. I no longer want to be a buyer of the NASDAQ at this time.
No Change as I am staying out of this market until we roll to the December Contract next week.
Gold Rolling Contract
Both Gold and Silver got hit hard yesterday as traders took on more risk. Gold has short-term support from 1485/1495 and I will be a buyer here with a 1478 stop.
Silver Rolling Contract
My Silver plan worked well with the market trading lower to my 18.20 buy level before rallying to my revised 18.35 T/P level and I am now flat. Yet again the DSI has proved what a fantastic technical signal it is. Today I will again look to buy the market on any further dip lower to 17.60/17.90 with a tight 17.45 stop. If I am taken long I will have a T/P level at 18.10.