U.S. Equity Markets reversed earlier gains to close Friday lower, led by the 1.77% fall in the NASDAQ 100. Markets focused on economic S&P Global’s Preliminary U.S. Composite Purchasing Managers’ Index (“PMI”) data for July. The reading fell back into economic contraction territory for the first time since June 2020. The weakness was driven by the Services Sector while the Manufacturing Sector outperformed. So, the change encouraged profit-taking after the S&P 500 Index had rallied more than 3.5% since the previous Friday’s close. Meanwhile, Money Managers sought to lighten up risk ahead of a slew of technology earnings this week in addition to the Federal Reserve’s latest policy announcement. The weak PMI saw 10-Year Treasuries rally, as yields fell over 12 basis points, closing at a three-month low at 2.78%. Within the S&P 500, eight of the 11 sectors finished lower. European Markets closed mixed. The EURO STOXX 50 Index had experienced one of the best weekly gains since March. This is despite political uncertainty in Italy as well as Russia threatening to cut off the region’s primary natural gas supplies. After Thursday’s first-rate increase in 11 years by the European Central Bank, policymakers are calling for even more. Governing Council member Peter Kažimír endorsed raising rates by either 0.25% or 0.5% at the next policy meeting in September. In Asia, Markets finished the week on a high note. China’s Banking and Insurance Regulator said it will work with lenders and local governments to ensure the delivery of yet-to-be-finished homes. This was meant to placate frustration from buyers who were refusing to make mortgage payments and pulling all their money from the country’s banks. Additionally, Japan’s Consumer Price Index (“CPI”) growth for June was higher than anticipated, but the key core-core data remained well below the central bank’s 2% target. This suggests the Bank of Japan will continue to stick with easy-money policies. Elsewhere, Oil fell 1.79% as demand weakens while Gold rose 0.31% on Dollar weakness.

To mark my 2600th issue of TraderNoble Daiy 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 bryan@tradernoble.com for details

For anyone following my Platinum Service it made 225 points on Friday and is now ahead by 3639 points for July after closing June with a gain of 3371 points June, while making 3651 points in May, having made 762 points in April, following a gain of 5883 points in March. The Platinum Service made an impressive 5324 points in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss. 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 

 

Equities

 

The S&P 500 closed 0.93% lower at a price of 3961.

The Dow Jones Industrial Average closed 137 points lower for a 0.43% loss at a price of 31,899.

The NASDAQ 100 closed 1.77% lower at a price of 12,396.

The Stoxx Europe 600 Index closed 0.5% higher.

This morning, the MSCI Asia Pacific Index fell 0.5%.

This morning, the Nikkei closed 0.79% lower at a price of 27,692.

Currencies 

The Bloomberg Dollar Spot Index closed 0.1% lower.

The Euro closed 0.1% higher at $1.0223.

The British Pound closed 0.1% higher at 1.2012.

The Japanese Yen rose 1% closing at $136.42.

Bonds

Germany’s 10-year yield closed 19 basis points lower at 1.03%.

Britain’s 10-year yield closed 12 basis points lower at 1.94%.

US 10 Year Treasury closed 12 basis points lower at 2.78%.

Commodities

West Texas Intermediate crude closed 3.51% lower at $97.09 a barrel.

Gold closed 0.31% higher at $1727.10 an ounce.

This morning on the Economic Front we have the German IFO Survey at 9.00 am. This is followed by U.S. Chicago Fed National Activity Index at 1.30 pm. Finally, at 3.30 pm we have the Dallas Fed Manufacturing Business Index.

Cash S&P 500

Despite Friday’s late sell-off, the S&P had a positive week, closing above its 50-Day MA for the first time in thirteen weeks as the 14-Day RSI bounced from an oversold reading of 30. The massive drop in Bond Yields is helping stocks as it looks more and more likely that once we get the week’s Fed hike out of the way , the Fed should be on hold as the fall in in commodities gets reflected in the inflation data over the coming months. On Friday, the S&P traded the whole of my buy range for a now 3958 average long position. I am still long with a now lower 3965 T/P level and the same 3933 ‘’Closing Stop’’. If any of the above levels are hit, I will be back with a new update for my Platinum Members.

EUR/USD

My Euro plan worked well with the market trading lower to my 1.0150 buy level before rallying to my 1.0210 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 1.0090/1.0160 with the same 1.0035 ‘’Closing Stop’’.

March Dollar Index

Shortly, after I posted on Friday, the Dollar rallied to my initial 107.20 sell level before trading lower to my 106.80 T/P level and I am still flat. Today, I will again be a seller on any further rally to 107.10/107.70 with a lower 108.15 stop.

Cash DAX

The DAX traded in a narrow range on Friday and I am still flat. I will continue to be a small buyer on any dip lower to 13000/13080 with the same 12945 ‘’Closing Stop’’.

Cash FTSE

The FTSE traded in a narrow range on Friday and I am still flat as the market never came close to my sell range. Given the weakness of Sterling, I will not chase the FTSE lower leaving my 7340/7410 sell level unchanged with the same 7465 stop.

Dow Rolling Contract

It is now clear that the U.S Economy is much weaker than the Fed expected. They have locked themselves into Wednesday’s 75 basis point rate hike, which in hindsight may turn out to be a major policy mistake. This will be an interesting week as we have monster earnings reports and of course month-end on Friday. Certainly, the huge fall in 10-Year Treasury Yields, are telling us of the impending recession. After the Dow traded lower to my 31740 buy level I had too much exposure as I was already long the S&P. The Dow rallied 170 points off my buy level allowing me to cover this position at my revised 31820 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 31400/31650 with the same 31295 ‘’Closing Stop’’. The ‘’Fear & Greed Index fell slightly on Friday, closing at 39 which is still a reading of ‘’Fear’’. A 50 print is neutral and when this happens it should propel the Dow higher given the level of bearishness amongst traders and Fund Managers.

Cash NASDAQ 100

Although the NDX led the American Indexes lower on Friday, it was still a positive week for tech stocks as the market closed 400 points above its 50-Day MA. Lower Bond Yields should help the NDX and is the main reason that I continue to hold my 14327 long position from April. Given the points made this month, I will now lower my exit level on this position to 12750. If this view changes I will be back with a new update for my Platinum Members.

September BUND

The rally in the Bund and fall in Yields has been staggering. The Bund has now fallen from a high of 1.84% in June to hit a low of 1% on Friday. This is a 1500 point rally in the Bund which is one of the most incredible moves for the Bund ever and in such a short period. Thankfully we were never short for this move higher and are still flat. The Bund is now severely overbought. We have resistance from 155.00/155.70 where I will be a small seller with a 156.35 ‘’Closing Stop’’. The Bund has short-term support from 152.50/153.20 where I will be a small buyer with a 151.75 ‘’Closing Stop’’.

Gold Rolling Contract

No Change. I am still a buyer on any dip lower to 1689/1704 with a tight 1675 ‘’Closing Stop’’.

Silver Rolling Contract

Silver rallied to my 18.90 T/P level on my latest 18.45 long position and I am now flat. This morning Silver is trading at 18.58. We have support from 17.70/18.40 where I will be a strong buyer with a 16.95 wider stop. If I am taken long I will again have a T/P level at 18.90.