U.S Indices closed last week mixed after a volatile trading session. Markets opened higher in the morning before seeing plenty of two-way price action for the rest of the day. Tech led the early gains behind strong earnings reports from Oracle and Peloton. The S&P 500 fell down below the 50-day moving average before bouncing off this level of key support. The U.S. Consumer Price Index, a measure of inflation, rose more than expected in August, but remained well below the Federal Reserve’s 2% target. This is another indication the central bank is in no rush to tighten policy anytime soon. But the lack of any progress in stimulus negotiations continued to weigh on sentiment. Late Thursday, Senate Democrats shot down a Republican $650 billion stimulus proposal. The two sides have until October 2 to pass legislation. At that time, the House goes on recess so that its members can return to their home districts to campaign. Now, attention is turning to this week’s Fed policy meeting. The S&P closed unchanged while the NASDAQ finished the week with a loss of 0.8%. European Central Bank President Christine Lagarde remained optimistic on the region’s economic outlook but said it remains prepared to use all tools at its disposal to support growth. ECB Governing Council member François Villeroy de Galhau said the central bank can do more to support the economy if needed. The European Union gave the U.K. until the end of September to withdraw legislation that could change the Brexit agreement, potentially ending trade talks. Elsewhere, Oil closed 0.43% on little news while Gold and Euro ended the week flat.
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For anyone following my Platinum Service it made 250 points on Friday and is now ahead by 1047 points for September, having made 2383 points in August, 3128 points in July, 2580 points in June, 2456 points in May, 4773 points in April, an incredible 9264 points in March, 2223 points in February and 2142 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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The S&P 500 closed 0.05% higher at a price of 3340.
The Dow Jones Industrial Average closed 131 points higher for a 0.48% gain at a price of 27,666.
The NASDAQ 100 closed 0.8% lower at a price of 11,087.
The Stoxx Europe 600 Index rose 0.3%.
The MSCI Asia Pacific Index rose 0.8%.
This morning the Nikkei closed 0.65 higher at 23,559.
The Bloomberg Dollar Spot Index again closed 0.1% higher.
The Euro closed 0.1% higher at $1.1840.
The British Pound closed unchanged at $1.2805.
The Japanese Yen closed 0.1% higher at 106.10 per dollar.
The yield on 10-year Treasuries closed two basis points lower at 0.66%.
Germany’s 10-year yield closed three basis points lower at -0.49%.
Britain’s 10-year yield closed six basis points lower at 0.18%.
The Bloomberg Commodity Index rose 0.3%.
West Texas Intermediate closed 0.43% higher at 2.73% lower at $37.10 a barrel.
Gold closed unchanged at $1,940.10 an ounce.
This morning on the Economic Front we have Euro-Zone Industrial Production at 10.00 am. We have no data of note due from the U.S as the market waits for the FOMC Statement on Wednesday night.
September S&P 500
Yet again the S&P tested its 50 Day Moving Average (3321) with a 3309 low print before surging to sit at 3378 this morning. As I have said countless times, it is so difficult to be short the S&P for any length of time as we are seeing huge buying on dips. The S&P has now tested its 50 Day twice in the last few days and each time we have seen strong buying. This key Index will prove to have less support on any subsequent test. This week we have the FOMC Meeting on Wednesday and the September Quadruple Expiration on Friday. This combination tends to be positive but already a lot of this move is now priced in. On Friday the S&P traded the whole of my buy range for a 3318 average long position before rallying to my 3329 T/P level and I am still flat. Today, I will be a buyer from 3330/3345 with a 3315 stop. I will now raise my sell level to 3398/3415 with a 3427 stop.
The boring sideways action in the Euro continues. I am still flat and I will leave my 1.1900/1.1940 sell range unchanged with the same 1.1985 stop. I will now raise my buy level to 1.1735/1.1785 with a higher 1.1679 stop.
December Dollar Index
No Change as I am still a buyer from 92.35/92.75 with a 91.85 stop.
European Equity Markets are ignoring the increase in Covid 19 cases over the past few weeks with traders prepared to buy every dip in the DAX. On Friday, the DAX just missed my 13080 initial buy level before rallying almost 200 points to sit at 13305 as I go to press. This morning, I will now raise my buy level to 13050/13150 with a higher 12985 stop. I still do not want to be short the DAX at this time.
I am still flat the FTSE as the market loos to play catchup with the other main Indices having underperformed for the past six weeks. As a result I will now raise my buy level to 5970/6020 with a higher 5925 stop.
Dow Rolling Contract
The Dow just missed my initial 27420 buy level on Friday, to sit 400 points higher at 27900 this morning. The Dow was the strongest of the US Indices last week. I am still flat and today I will raise my sell level to 28050/28250 with a higher 28375 tight stop. I will also raise my buy level to 27480/27680 with a higher 27245 stop.
After the NASDAQ traded lower to my 11150 buy level I covered this position at my revised 11205 T/P level. Subsequently, I emailed my Platinum Members to buy the NASDAQ again and this was filled at an average rate of 11025. Unfortunately, I covered this position too early ahead of the close at 11070 and I am now flat. Although the NASDAQ closed below its 50 Day MA (11131) we are trading well above this level at 11265 this morning. I will continue to be a buyer on any dip lower to 11030/11130 with a 10965 tight stop. If I am taken long and subsequently stopped out of this position I will be an aggressive buyer from 10850/10650 with the same 10535 wider stop.
My long 173.44 Bund position worked well with the market trading higher to my 173.84 T/P level and I am now flat. As I have said countless times, Bond markets are a buy on dips and this strategy will continue until the Central Banks change tact. In my opinion this will not happen anytime soon as they have to keep Bond Yields low so the Governments can finance their ever increasing debt. Today, I will be a buyer from 173.30/173.70 with a 172.95 stop.
Gold Rolling Contract
Gold traded in a narrow range on Friday and I am still flat. I will leave my 1900/1915 buy level unchanged with the same 1888 stop.
Silver Rolling Contract
No real change as I am still a buyer on any dip lower to 25.60/26.20 with a higher 24.95 stop.