U.S. Equity Markets finished yesterday’s session lower, led by the 1.21% fall in the NASDAQ 100. Surprisingly, the VIX only closed with a gain of 1% at a price of 19.90. Markets fell as July headline Retail Sales remain largely stagnant. Target (TGT) continued the trend for retailers this week as it warned that higher inventory levels will remain until inflation eases and boosts consumer demand. According to data from the Mortgage Bankers Association, weekly mortgage applications decreased 2.3% from the prior week. Overall purchase applications are nearing the lows seen early in the pandemic. Within the S&P 500, ten of 11 sectors finished lower. European Markets closed lower. Inflation accelerated to 10.1% in July for the U.K., marking the highest rate since February 1982. Pressures continue to increase on the Bank of England to raise rates further. Germany’s economy continues to struggle with higher energy costs and few solutions to prepare the Euro-Zone’s largest economy heading into the winter months. The government reported that it would have less than three months’ supply of natural gas to get through the winter if Russia cuts supply. In Asia, Japan posted its 12th straight month of a trade deficit with exports rising 19.0% year over year (“YOY”) and imports rising to a new record of 47.2% YOY. New Zealand’s central bank raised its official cash rate by the expected 0.50% to 3.00% – above its self-defined neutral level. Chinese Premier Li Keqiang urged Chinese provinces to promote economic growth with initiatives aimed at autos and houses. Elsewhere, Oil bounced 1.43% while Gold fell 0.59% after another quiet session.
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The S&P 500 closed 0.72% lower at a price of 4274.
The Dow Jones Industrial Average closed 171 points lower for a 0.50% loss at a price of 33,980.
The NASDAQ 100 closed 1.21% lower at a price of 13,470.
The Stoxx Europe 600 Index closed 1.1% lower.
Yesterday, the MSCI Asia Pacific Index rose 0.7%.
Yesterday, the Nikkei closed 1.23% higher at a price of 29,222.
The Bloomberg Dollar Spot Index closed 0.1% lower.
The Euro closed 0.1% higher at $1.0182.
The British Pound closed 0.3% lower at 1.2051.
The Japanese Yen fell 0.7% closing at $135.06.
Germany’s 10-year yield closed 11 basis points higher at 1.08%.
Britain’s 10-year yield closed 17 basis points higher at 2.28%.
US 10 Year Treasury closed 9 basis points higher at 2.90%.
West Texas Intermediate crude closed 1.43% higher at $87.58 a barrel.
Gold closed 0.25% lower at $1764.10 an ounce.
This morning on the Economic Front we have Euro-Zone Inflation and Construction Output at 10.00 am. This is followed by U.S. Weekly Jobless Claims and the Philly Fed Manufacturing Survey at 1.30 pm. Finally, we have Existing Home Sales at 3.00 pm.
Cash S&P 500
The Fed Minutes proved again the mantra is not to upset markets. Not even the 10.1% UK CPI could derail this market as the waiting goes on to next week’s Jackson Hole Conference when Fed Chair Powell may try and put an end to this vertical rally where Apple has risen over 34% in the past few weeks and is only down 2.5% for the year. Policy is still too loose and as I said yesterday there in no chance of inflation falling back to 2% when we have conditions as easy as they are. The S&P made an afternoon high at 4311 before falling 30 Handles into the close and I am still flat. I will now lower my sell level to 4308/4328 with a lower 4343 ‘’Closing Stop’’. I still do not want to be long the S&P at this time. Risk is the S&P does trade higher to 4328/4368 before rolling over but the game plan is to try and get a macro short position on in this area if allowed
No Change. I am still long at 1.0165 with a now lower 1.0200 T/P level. I will leave my stop unchanged at 1.0085 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
March Dollar Index
No Change. The Dollar has resistance from 107.00/107.60 where I will be an aggressive seller with a 108.05 tight stop. I will leave my buy level unchanged at 105.00/105.60 with the same 104.45 stop.
My DAX plan did not work well yesterday as European Markets got spooked by the 10.1% UK CPI print, sending the DAX lower by over 220 points. I bought the market at 13760 before being stopped near the lows of the day at 13655 and I am now flat. Today, I will again be a small buyer on any further dip to 13430/13510 with a 13355 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 13590.
No Change. The FTSE surprisingly traded in a narrow range despite Gilt yields rising by a huge 17 Basis points. The FTSE resistance from 7870/7630 where I will continue to be a seller with a tight 7685 stop. I still do not want to be long the FTSE at this time.
Dow Rolling Contract
My latest Dow short worked well with the market trading lower to my 33960 buy level on my 34020 average short position and I am now flat. The Dow has resistance from 34200/34400 where I will again be a seller with a 34555 tight ‘’Closing Stop’’. The Dow has short-term support from 33500/33700 where I will be a strong buyer with a 33385 ‘’Closing Stop’’.
Cash NASDAQ 100
The NDX led yesterday’s decline and I am still flat. I am reluctant to chase the market lower given the recent rally in Apple Shares. Therefore, I will leave my 13750/13950 sell level unchanged with the same 14055 ‘’Closing Stop’’.
The Bund got hit hard yesterday, trading the whole of my buy range for a now 154.70 average long position. I will now lower my T/P level to 155.10 while leaving my 153.75 ‘’Closing Stop’’ unchanged.
Gold Rolling Contract
After Gold traded lower to my 1760 buy level we had a small rally to my revised 1765 T/P level as emailed to my Platinum Members and I am now flat. Today, I will again be a small buyer on any dip lower to 1738/1753 with a 1729 ‘’Closing Stop’’.
Silver Rolling Contract
I am still long from Monday at 20.20. I will leave my 20.65 T/P level unchanged while continuing to add to this position at 19.60. I will now lower my stop to 19.10. If any of the above levels are hit I will be back with a new update for my Platinum Members.