U.S. Indices closed mixed on Friday after Jobs data printed better than expected. July saw 1.7 million jobs added to the economy, according to the Bureau of Labour Statistics. This marked the third straight month that the economy added jobs, after losing more than 20 million jobs in April. And the Unemployment rate fell to 10.2%, down from 11.1% in June and the peak of 15% in April. Stimulus remained in the headlines, with no agreement being reached in recent negotiations. With talks ending Friday at an impasse, President Trump signed a series of Executive Orders on Saturday to provide temporary relief to Americans who are still suffering from the Pandemic. Trump signed four orders that will provide an additional $400 per week in Unemployment Benefits, suspend payments on some student loans until January protect renters from being evicted from their homes and instruct employers to defer certain Payroll Taxes through the end of the year for Americans who earn less than $100K annually. Coronavirus fears remain elevated, after National Institute for Allergy and Infectious Diseases director Dr. Anthony Fauci said that the chances for a highly effective vaccine were slim. The Dow and S&P closed higher by 0.17% and 0.07% respectively while the NASDAQ closed 0.89% lower after a volatile trading session. European Markets declined despite, Germany’s IFO Economic Institute saying that it expects Industrial Production to increase over the next three months, after June’s Industrial Production beat estimates as the economy reopened. British Chancellor Rishi Sunak said the Country’s furlough scheme, which pays a percentage of furloughed worker’s wages, will not be extended beyond the current deadline in October. Bank of England Deputy Governor Dave Ramsden said the Central Bank still has room to act to support the economy if needed, while adding that it is not actively considering negative interest rates. Elsewhere, Gold fell 1.24% on Dollar strength while Oil closed 1% lower on the stimulus package delays.
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The S&P 500 closed 0.07% higher at a price of 3351, for a new recovery high.
The Dow Jones Industrial Average rose 47 points for a 0.17% gain to close at 27,433.
The NASDAQ fell 1.13%, closing at 11,139.
The Stoxx Europe 600 Index decreased 0.5%.
The MSCI Asia Pacific Index fell 0.1%.
This morning the Nikkei is closed.
The Bloomberg Dollar Spot Index increased 0.2%.
The Euro decreased 0.5% to $1.1785.
The British Pound fell 0.5% to $1.3053.
The Japanese Yen appreciated 0.2% to 105.91 per dollar.
The yield on 10-year Treasuries rose three basis points to 0.56%.
Germany’s 10-year yield closed unchanged at -0.53%.
Britain’s 10-year yield fell three basis points to 0.067%.
The Bloomberg Commodity Index dipped 0.9%.
West Texas Intermediate crude declined 1.0% to $40.72 a barrel.
Gold weakened 1.4% to $2,032.24 an ounce.
This morning on the Economic Front we have the Euro-Zone Sentix Investor Confidence at 9.30 am. The only other data of note on either side of the Atlantic, is the U.S JOLTS Job Openings at 3.00 pm.
September S&P 500
The S&P had a volatile last week, hitting a low of 3212 on Friday August 3 before rallying to close last Friday at new recovery highs at 3346. This move higher occurred despite the increase in the number of Coronavirus cases over the past few days, and the fact that Congress could not agree a fifth stimulus, forcing President Trump to sign a series of Executive Orders to help workers affected by the virus. For the week I lost 50 points trading the S&P in both directions and I am now flat as the massive 3258/3330 ‘’Open Gap’’ from February 21/24 finally got filled as expected. I am still expecting a retracement off this rally back to the 3280 area before we see one final move higher to new highs over the coming weeks, before a more meaningful sell-off occurs. The S&P has strong support from 3312/3328 where I will be buyer with a 3299 stop. We have resistance from 3368/3383 where I will be a strong seller with a 3396 stop.
The Euro has now moved much while I was away trading in a narrow 200 point range. I am now flat having made 28 points last week. The Euro has strong support from 1.1680/1.1730 where I will be a buyer with a 1.1635 stop. The Euro ran into strong resistance at 1.19. I will be a small seller from 1.1865/1.1905 with a 1.1945 stop.
September Dollar Index
I am still flat the Dollar which traded in a narrow range over the past six trading sessions. The Dollar has strong support from 92.60/93.05 where I will be an aggressive buyer with a 92.15 stop. Given how oversold the Dollar is trading, I still do not want to be short the market at this time.
The DAX having just missed my initial 12050 buy level, rallied to trade the whole of my sell range for a 12655 average short position. Subsequently the DAX traded lower to my 12585 T/P level and I am still flat. This morning the DAX is trading higher at 12750. We have strong resistance from 12900/13050 where I will again look to go short with a 13135 tight stop. I will now Raise my buy level to 12470/12620 with a 12395 tight stop.
My FTSE plan worked well with the market trading the whole of my buy range for a 5873 average long positon. That was the good news as unfortunately due to the number of calls that hit on August 3, which forced me to cut my exposure and I exited this trade at 5880. Hopefully you did better with the market now trading higher at 6025 this morning. The small sell-off in Sterling has helped while the fact that we are close to hitting negative yields in the 10 -Year Gilt is a major factor for a higher FTSE. The FTSE has short-term support from 5920/5970 where I will be a buyer with a 5875 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
Apart from the S&P, the Dow has been the big winner last week, rallying over 1200 points since my last Daily Commentary. My last Dow call generated 165 points and I am still flat. The Dow has strong resistance from 27680/27880 where I will look to sell the first time up with a 28050 stop. As long as the Dow can hold 26700 then we should see new all-time highs over the coming weeks. The Dow has short-term support from 27100/27300 where I will be a small buyer with a 26950 stop.
It took a while but finally, late on Thursday the NASDAQ rallied to my 11230 sell level before selling off to my revised 11170 T/P level on Friday afternoon and I am now flat. The NASDAQ made an intra-day low below 11040 on Friday before rallying 100 points into the close. The NASDAQ is extremely overbought having made over 30 new all-time highs so far this year and is due a meaningful correction. The NASDAQ has strong resistance from 11230/11330 where I will be a strong seller with a 11415 tight stop. If I am taken short I will have a T/P level at 11170.
The BUND has traded in a narrow range for the last six trading sessions. Shortly after my last Daily Commentary the Bund traded lower to my 177.35 T/P level on my latest 177.60 short position and I am still flat. This morning the Bund is trading close to my exit level at 177.15. We have strong resistance from 177.70/178.20 where I will again look to sell the market with a 178.55 stop.
Gold Rolling Contract
Thankfully, we had no sell levels in either Gold or Silver with both markets exploding since my last commentary. Last Friday, Gold made a new all-time high at 2076 before falling over $40 into the close and I am still flat as the market never came close to my initial 1935 buy level. Gold has strong resistance from 2060/2075 where I will be a small seller with a 2086 stop. Gold has initial support from 1986/2002 where I will be a buyer with a 1977 tight stop. If I am taken short, I will have a T/P level at 2048. If I am taken long I will have a T/P level at 2014.
Silver Rolling Contract
Silver rallied over 20% since my last Daily Commentary, hitting a new seven-year high at 29.77 on Friday. Subsequently, Silver fell 8% before having a small rally into the close and I am still flat. Silver has short-term support from 26.40/27.05 where I will be a small buyer with a 25.75 stop. I still do not want to be short Silver at this time.