U.S. Equity Markets rose to end a strong week, led by the Dow which closed above 35000 with a gain of 1.09%. Markets opened higher, and held onto their gains for the rest of the day. Economic data was mixed. On the one hand, Retail Sales data rose surprisingly in September, another sign of ongoing consumer strength. But Consumer Sentiment fell in October, remaining near the lowest levels in more than 10 years. The survey cited the COVID-19 Delta variant, supply-chain shortages, and labour issues as headwinds to optimism. Earnings season wrapped up, with reports from all the big banks this week getting off to a strong start. This will continue to serve as a catalyst for markets as more and more reports come out in the coming weeks. European Markets closed higher. Italy’s government was said to consider extending tax breaks on corporate mergers for another six months to support economic growth. The International Monetary Fund advocated global central bankers look beyond rising price pressures that could prove transitory and not take policy action too soon. European car registration figures experienced the largest year-over-year contraction in September since 1995, as the ongoing semiconductor shortage hurt vehicle supply. In Asia, China’s financial regulators were said to tell some of the nation’s largest banks to accelerate approvals of home loans in order to maintain the steady health of the real estate market. Japan’s Cabinet Office said Prime Minister Fumio Kishida has formed a “new capitalism” panel to explore sharing corporate profits on a broader basis. Bank of Korea Governor Lee Ju-yeol said it will gradually adjust accommodative monetary policy and that a November rate hike is possible absent any economic risk. Technology stocks gained after Taiwan Semiconductor’s third-quarter earnings and fourth-quarter guidance beat expectations on strong semiconductor demand. Elsewhere, Oil rose 1.21% as Wall Street estimated a drop off in crude supply as travel-related restrictions ease, while Gold fell 1.62% on Dollar strength.
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For anyone following my Platinum Service it made 110 points on Friday and is now ahead by 678 points for October after making 2866 points in 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 0.75% higher at a price of 4471.
The Dow Jones Industrial Average closed 382 points higher for a 1.09% gain at a price of 35,294.
The NASDAQ 100 closed 0.63% higher at a price of 15,146.
The Stoxx Europe 600 Index closed 0.7% higher.
Last Friday, the MSCI Asia Pacific Index rose 0.6%.
Last Friday, the Nikkei closed 1.91% higher at a price of 29,068.
The Bloomberg Dollar Spot Index closed 0.1% lower.
The Euro closed 0.1% higher at $1.1599.
The British Pound closed 0.5% higher at 1.3744.
The Japanese Yen fell 0.5%, closing at $114.27.
Germany’s 10-year yield closed three basis points higher at -0.16%.
Britain’s 10-year yield closed six basis points higher at 1.10%.
US 10 Year Treasury closed six basis points higher at 1.57%.
West Texas Intermediate crude closed 1.21% higher at $82.85 a barrel.
Gold closed 1.62% lower at $1,768.10 an ounce.
This morning on the Economic Front we have no data of note from either the UK or the Euro-Zone. At 10.30 am Fed Member Quarles is speaking and this is followed by U.S. Industrial Production and Capacity Utilisation at 2.15 pm. Finally, at 3.00 pm we have the NAHB Housing Market Index for October.
December S&P 500
Th S&P traded higher to my 4457 sell level before settling slightly higher at a price of 4462. I am still short and I will add to this position at 4477 while leaving my 4491 ‘’Closing Stop’’ unchanged. Internally, Friday was a weak session as the McClellan Oscillator closed 27 points lower at 130 which is strange given all three US Indexes closed higher. This is warning sign in an overstretched market where Market Cap to GDP is still running over 200%. I will now raise my T/P level on this position to 4449 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
I am still flat the Euro as the market traded in a narrow range on Friday. I will now lower my sell level to 1.1648/1.1688 with a lower 1.1725 stop. Meanwhile, I will leave my 1.1495/1.1545 buy level unchanged with the same 1.1459 stop.
December Dollar Index
No Change. I am still a small seller from 94.30/94.70 with the same 95.01 stop.
The DAX just missed my initial 15380 buy level before rallying nearly 200 points higher at 15475 and I am still flat. I will now raise my buy level again to 15340/15400 with a tight 15285 stop. I still do not want to be short the DAX at this time.
The FTSE continues to rally without having any meaningful pullback and I am still flat. I am not going to chase the market higher from here , leaving my 7085/7135 buy level unchanged with the same 7039 stop.
Dow Rolling Contract
I must say I am surprised by the rally in the Dow last Thursday and Friday when the Dow rallied over 800 points, to close just below 35300 on Friday evening. As I mentioned in the S&P above, we had a positive close but a negative Advance/Decline Ratio. While the Dow may test it all-time high above 35500 I would not be buying the Dow at these levels. On Friday the Dow traded the whole of my sell range and I am now short at an average rate of 35230. I will leave my 35405 ‘’Closing Stop’’ unchanged while raising my T/P level to 35160. If any of the above levels are hit I will be back with a new update for my Platinum Members.
With 10 – Year Treasury Yields rising by seven basis points, the NASDAQ was the heaviest of the US Indexes on Friday. The NDX hit my second sell level at 15100 for a now 15040 average short position. I will now raise my T/P level on this position to 15005 while leaving my 15165 ‘’Closing Stop’’ unchanged.
The Bund never came close to Friday’s sell range before selling off on the stronger U.S. Retail Sales data and I am still flat. The bund has strong support from 168.20/168.70 where I will be a buyer with a 167.75 stop.
Gold Rolling Contract
Gold fell $40 on Friday, hitting my 1766 buy level before rallying to my 1774 revised T/P level and I am still flat. Friday’s reversal comes as Gold again found strong resistance at the 1800 level. We have strong support from 1730/1745 where I will be an aggressive buyer with a 1719 stop.
Silver Rolling Contract
My Silver plan worked well with the market trading lower to my 23.10 buy level before rallying to my 23.40 T/P level and I am now flat. We have strong support from 22.10/22.70 where I will again be a buyer with a 21.55 stop.