U.S. stocks eked out a third straight advance, while Treasuries were mixed as Federal Reserve Chairman Jerome Powell’s latest comments did little to alter views on Federal Reserve policy. The US Dollar fell. The S&P 500 gained for a second week after the Fed chief’s last comments before the Sept. 18 policy meeting cemented views that the central bank will cut rates. Tech shares weighed on major averages amid fresh antitrust concerns, with the Nasdaq composite ending the day lower. Stocks rose earlier after hiring data signalled a strong labour market that is not too strong to deter further easing. The two-year Treasury yield edged higher, while the 10-year rate fell. The US Dollar had its fourth straight decline. Oil erased losses to turn higher.
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Jobs have been a bit of a roller coaster these past few months. Friday’s miss along with downward revisions for the prior two months solidifies that jobs gains are moderating. And it is below expectations and depressed enough to fuel the Fed’s drive to cut rates this month, so in some ways there is something to like for everyone in this latest report. Elsewhere, China cut the amount of cash banks must hold as reserves, injecting liquidity into an economy facing headwinds to growth. The MSCI Asia Pacific Index headed for its biggest weekly advance since June.
The S&P 500 Index rose 0.1% to close at 2977.
The Nasdaq Composite Index fell 0.2%.
The Stoxx Europe 600 Index climbed 0.3%.
The U.K.’s FTSE 100 Index fell 0.2%.
The MSCI Asia Pacific Index gained 0.6%.
Here is a summary of the main changes in F/X Markets:
The Bloomberg Dollar Spot Index fell 0.1%.
The Euro fell 0.1% at $1.1030.
The British Pound sank 0.4% to $1.2286 as political turmoil in Britain dragged on.
The Japanese Yen advanced 0.1% to 106.89 per dollar.
The yield on 10-year Treasuries fell less than a basis point to 1.55%.
The yield on two-year Treasuries rose less than one basis point at 1.53%.
Germany’s 10-year yield fell three basis points to -0.62%.
Britain’s 10-year yield declined nine basis points to 0.511%.
Gold rose 0.2% to $1,528.80 an ounce.
WTI oil dropped 0.8% to $55.83 a barrel.
Brent crude decreased 0.4% to $60.68 a barrel.
The Bloomberg Softs Spot Sub-Index tracking coffee, sugar, and cotton headed for the 10th straight week of declines, the longest stretch since 1991 when the Index started.
This morning on the Economic Front we already had the release of the German Trade Balance which came in higher the Euro 17.4 Billion Expected with a print of Euro 21.4 Billion. At 9.30 am we have UK Trade Balance, Industrial/Manufacturing Production, Index of Services and GDP. This is followed at 10.00 am by Euro-Zone Sentix Investor Confidence. The only U.S. Data release is Consumer Credit which is not due until 8.00 pm.
September S&P 500
Friday felt more like a lazy, August trading day in the market than a Friday in September that just released its key NFP. Volatility was so slow that the VIX fell another 8% to close at 15.00 which is now well below it’s 50 Day Moving Average which comes in at 16.19 this morning. I am still flat the S&P and today I will move my buy level higher to 2950/2965 with a 2939 wider stop as I look for the market to trade to 3000/3010, 3030/3060 and higher over the coming weeks. I still do not want to be short the S&P at this time.
No Change as my only interest in buying the Euro is on a dip lower to 1.0940/1.0980 with a 1.0905 stop.
December Dollar Index
I am still flat the Dollar and today I will again my sell level slightly to 98.35/98.75 with a lower 99.05 stop.
This morning the DAX is again trying to break higher as it tests the 12200 level. On Friday the market traded in a narrow range on what turned out to be one of the quietest NFP trading sessions in recent memory. I will now raise my buy level in the DAX to 12010/12080 with a 11945 stop.
The FTSE dipped after I posted on Friday but bot enough to hit my buy range and I am still flat. With the Pound opening lower ahead of the next Parliament vote this evening the FTSE is trading higher. Today I will be a small seller on any further rally to 7370/7410 with a 7445 stop.
Dow Rolling Contract
The Dow never came close to my buy range on Friday as the market looks to trade higher given the fact that so many traders are trapped short by the incredible sell-off and rally over the past six weeks. Today I will raise my buy level to 26570/26720 with a 26480 stop as I look for the Dow to trade higher to 27100/27300 and possibly as high as 28300 over the coming weeks.
I am still short the NASDAQ at 7860 with the market just missing my 7835 T/P level with a 7839 low print. I will now raise my T/P level on this position to 7855 while lowering my stop on this position to 7895. I will also look to buy the NASDAQ on any dip lower to 7785/7835 with a 7745 stop. If I am taken long I will have a T/P level at 7890.
I am still flat the Bund as the market rallied on Friday which was no surprise given the fact it fell 200 points on Thursday. Today I will raise my buy level to 174.00/174.40 with a 173.65 tight stop.
Gold Rolling Contract
I am still flat Gold. The market had a volatile trading session on Friday before closing higher. This morning Gold is opening lower and today I will leave my 1480/1490 buy level unchanged with the same 1471 stop.
Silver Rolling Contract
I had the right view of a lower Silver based on a 95% DSI reading last week but even I was surprised by the ferocity of the move with Silver ending Friday with a significant Downside Key Week Reversal. After the NFP was released I was stopped out of my 18.80 long position at 18.30. Incredibly after I was stopped out of this position Silver made an initial low of 18.02 before rallying back to the 18.80 area before selling off into the close and is now trading at 18.11 as I go to press. Remember on Wednesday we were trading at 19.70. Today I will be a small seller on any rally to 18.45/18.85 with a 19.20 stop. Given the extent of last week’s sell off I no longer want to be long Silver at this time.