U.S. Equity Markets pushed higher for a third day as investors looked past weak economic data and mixed corporate results, including an unexpected quarterly loss for Boeing. Treasuries advanced along with bonds in Europe. The Nasdaq Composite Index climbed to a record after Texas Instruments posted strong earnings, while UPS’s bullish profit guidance helped push the S&P 500 to an all-time closing high. Along with Boeing, Caterpillar weighed on the Dow Jones Industrial Average after the equipment maker projected earnings at the low end of forecasts. European Bond yields dropped to unprecedented lows as disappointing Manufacturing data added to concerns about the region’s growth and bolstered expectations for more central bank accommodation, including by the Federal Reserve. Central banks remain in focus after the IMF on Tuesday revised its forecasts for global growth lower and the Federal Reserve is seen trimming its policy rate by a Quarter percentage point next week. The European Central Bank may hold fire this afternoon, though its message will be closely parsed for signs of a September move as the poor economic data ramp up pressure to deliver stimulus.
To mark my 1875th issue of TraderNoble Daily 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 firstname.lastname@example.org for details
For anyone following my Platinum Service it lost 55 points yesterday and is now ahead by 792 points for July, having made 1346 points in June,1722 points in May, 955 points in April, 1027 points in March, 1013 points in February and 1671 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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Broadly positive earnings reports have buoyed stocks this so far week, though Deutsche Bank’s woes and flagging demand reported by car makers and other manufacturers gave investors a reminder of the uncertain outlook for the global economy. To add to that, the U.S. Justice Department opened a broad probe into whether dominant technology firms are unlawfully stifling competition, hitting shares of Amazon and Alphabet. The S&P 500 Index climbed 0.5% to close at 3,019.56, the highest on record. The Nasdaq Composite Index climbed 0.8% to 8,321.50, the highest on record with the biggest increase in more than three weeks. The Dow Jones Industrial Average fell 0.3% to 27,270, the largest fall in a week. In Europe, the Stoxx Europe 600 Index was little changed at 391.73, the highest in almost three weeks, while the U.K.’s FTSE 100 Index sank 0.7% to 7,501.46, the largest decrease in almost eight weeks. In Asia, Japan’s Nikkei 225 Stock Average climbed 0.4% to 21,709.57, the highest in almost three weeks.
Here is a summary of the main changes in F.X Markets:
The Bloomberg Dollar Spot Index fell 0.1% to 1,198.85.
The Japanese Yen was little changed at 108.20 per dollar.
The Euro sank 0.1% to $1.1138, the weakest in almost eight weeks.
Britain’s Pound rebounded from a two-year low following Boris Johnson’s victory in the contest to succeed Theresa May as U.K. Prime Minister, though the nation’s equity benchmark underperformed, closing 0.3% higher at $1.2482.
The Swiss Franc was little changed at $0.9854, the weakest in a week.
The Canadian Dollar decreased 0.1% to C$1.3148 per U.S. dollar, the weakest in more than four weeks.
The Australian Dollar decreased 0.4% to 0.698 per dollar, the weakest in almost two weeks.
The yield on two-year Treasuries sank two basis points to 1.82%.
Germany’s 10-year yield fell two basis points to -0.39%, reaching the lowest in almost three weeks on its sixth straight decline and the biggest fall in a week.
The lower European Yields helped 10-year Treasuries to decline by four basis points to 2.04%, the largest fall in a week.
Britain’s 10-year yield fell one basis point to 0.678%, reaching the lowest in almost three weeks on its sixth straight decline.
This morning on the Economic Front we have the German IFO Survey at 9.00 am. This is followed at 11.00 am by the UK CBI Distributed Trades Survey. At 12.00 pm we have the ECB Rate Announcement. Economists widely expect officials to signal their readiness to cut Interest Rates and potentially broaden stimulus. Some see the chance of an immediate rate cut. ECB President Mario Draghi holds a briefing afterward at 1.30 pm. At the same time we have US Weekly Jobless Claims, Trade Balance, Durable Goods Orders and Wholesale Inventories. Finally, at 4.00 pm we have the Kansas Fed Manufacturing Index.
September S&P 500
The S&P has not moved more than 1% in either direction for 22 trading sessions as the market closed at new all-time highs on low volume. This low volatility was reflected in the VIX which closed another 4% lower at 12.07 and very near the lows for the year. The S&P is inching towards my 3060/3100 resistance and target level. I am still flat as the S&P just missed my 2992 buy level with a 2996 low print before rallying 25 Handles. Today I will raise my buy level again to 2995/3005 with a 2987 stop. I still do not want to be short the S&P at this time.
The Euro closed near the low for the year at 1.1138. As mentioned yesterday the Euro is trading at the bottom of both its Daily Bolliner Band and Williams Index as we wait for Dragi’s press conference to begin at 1.30 pm. Today I will lower my buy level slightly to 1.1050/1.1090 with a wider 1.1005 stop. Meanwhile I will leave my 1.1220/1.1260 sell level unchanged with the same 1.1305 stop.
September Dollar Index
While the Euro closed lower the Dollar Index had its first lower close in four sessions. I am still flat and today I will leave my 97.80/98.20 sell level unchanged with the same 98.55 stop.
I am still flat the DAX as we wait for the result of the Key ECB Meeting and Dragi press conference this afternoon. Although the price action in the DAX is bullish I am reluctant to chase the market higher and I will leave my 12360/12420 buy level unchanged with the same 12295 stop.
The FTSE got hit hard yesterday after the Pound rallied following the election of Boris Johnson as the new Conservative Leader and now Prime Minister. I had no buy level in the market yesterday while my sell level never got close to being hit. The FTSE has strong support from 7350/7390 and I will be a buyer on any dip to this area with a 7215 stop.
Dow Rolling Contract
While both the S&P and NASDAQ closed at all-time highs the Dow struggled yesterday and still 130 points below its 27398 high from last week. As long as this high remains we will have negative divergence between the three main Indices. Yesterday the Dow just missed my 27170 initial buy level with a 27187 low print before rallying into the close and I am still flat. Today I will lower my buy level slightly to 26960/27110 with a lower 26870 stop. I still do not want to be short the Dow at this time.
Late in yesterday’s session the NASDAQ traded higher to my 8030 sell level. I am still short and I have now raised my T/P level on this position to 7990. I will only add to this trade on any further move higher to 8080 with a 8120 stop. If any of the above levels are hit I will be back with a new update for my Platinum Members.
My latest short 173.65 Bund position did not work well as I was stopped out of this trade at 174.20 and I am now flat. With Bund yields hitting a new low of -40 basis points in yesterday’s session, you wonder where all this will end. No wonder the DAX has rallied given the fact that it costs you money to have on deposit. The Bund has strong resistance from 174.80/175.30 and I will again be a seller on any rally to this area with a 175.65 stop. If I am taken short I will have a T/P level at 174.45.
Gold Rolling Contract
I am still flat Gold. Just like the DAX above I am reluctant to chase this market despite the surge in the price of Silver yesterday. Today I will leave my 1398/1406 buy level unchanged with the same 1391 stop.
Silver Rolling Contract
I am still flat the market which made a new high for the year at 16.68 yesterday. Worryingly the Daily Sentiment Index closed at 91% bulls last Monday. My only interest in buying the market is still on a dip lower to 19.90/16.30 with the same 15.55 stop.