European Indices closed lower after the White House is said to be looking into imposing an additional $3.1 billion of Tariffs on European Exports. Shortly after I posted yesterday morning, ECB Chief Economist Philip Lane said investors should not to get too optimistic over the recent snapback in Economic Data, adding that the Euro-Zone will take a while to recover. Despite opposition from the U.S, the European Union said it is pushing ahead with a Digital Tax against Internet Companies. In what turned how to be a vicious trading session the DAX and FTSE closed over 3% lower. We saw similar losses in the Dow and S&P after Florida announced a further spike in cases, while in Texas it was reported that beds in ICU are at 97% capacity. The VIX spiked over 13% while the S&P again tested its 200 Day Moving Average at 3020, before rallying into the close and finish 2.6% lower. New York Governor Andrew Cuomo said the State will require 14-day quarantine of travellers of any States deemed Coronavirus hot spots. Total infections in the U.S have risen to levels last seen in May. Sentiment turned negative on the worry that businesses may be shut-down again but for now this seems unlikely according to Mnuchin. Elsewhere, Treasuries rallied while Crude got hit for over 5% as Gold again closed flat.
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For anyone following my Platinum Service it lost 27 points yesterday and is now ahead by 2711 points for June, having made 2456 points in May, 4773 points in April, an incredible 9264 points in March, 2223 points in February, 2142 points in January and 818 points in 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 2.6% lower at a closing price of 3050.
The Dow Jones Industrial Average fell 710 points for a 2.72% fall to close at 25,446.
The NASDAQ 100 closed 2.3% lower at 10,0002.
Stoxx Europe 600 Index closed with a loss of 2.8%%.
The FTSE 100 closed 3.13% lower.
This morning the Nikkei closed 1.2% lower at 22,259.
Here is a summary of the main Changes in F.X. Markets:
The Euro decreased 0.5% to $1.1253.
The Japanese Yen closed 0.5% lower at 107.06.
The British Pound fell 0.8% to 1.2422 per Dollar.
The yield on 10-year Treasuries fell three basis points to 0.68%.
Germany’s 10-year yield fell two basis points to -0.44%.
Britain’s 10-year yield fell three basis points to 0.19%.
West Texas Intermediate crude fell 5.5% to $38.16 a barrel.
Gold weakened 0.2% to $1765.
This morning on the Economic Front we already had the release of German GFK Consumer Confidence which came in better than the -12 expected with a -9.6 print. At 12.30 pm we have the latest Minutes from the ECB Meeting and this is followed at 1.30 pm by U.S Weekly Jobless Claims, Trade Balance, Wholesale Inventories, Durable Goods, PCE and GDP. Finally, at 4.00 pm we have the Kansas City Fed Manufacturing Activity Index.
Meanwhile the ECB’s Mersch, and the Fed’s Kaplan, and Bostic are all speaking this afternoon at 1.30 pm, 2.30 pm 4.00 pm respectively.
September S&P 500
The S&P opened lower and did not close the Gap from Tuesday’s close at 3120 in the September Contract. The move yesterday has left another Island Reversal for both the S&P and Dow. In the S&P, 96.2% of the Index’s issues closed lower for day in what turned out to be a brutal sell-off. Internally the market was very weak with the McClellan Oscillator closing at -175. Of course, we have been here before where the Fed have stepped in to prevent markets from selling off further. This is what makes shorting the US Indices so difficult. Yesterday after the S&P traded lower to my 3093 buy level, I emailed my Platinum Members to exit this position at my revised 3100 T/P level. The 200 Day Moving Average offers strong support and comes in at a price of 3020. After the S&P got hit hard I emailed my Platinum Members to buy the S&P again at 3028 before rallying to my 3044 T/P level and I am now flat. Yesterday was the fourth successful test of the 200 Day MA that generated a decent rebound. The danger is that the next time we may break this key technical level and close much lower. Today I will be a small buyer from 2985/3002 with a 2973 tight stop. The S&P has resistance from 3068/3083 where I will be a seller with a 3092 stop. A break and back above 3070 this evening is bullish. We also have a massive ‘’Open Gap’’ left from February’s sell-off. As we know all Gaps in the S&P are eventually filled and this Gap is wide from 3258/3330. It would be interesting if this Gap was filled over the coming weeks before the real sell-off for Phase 3 begins.
The Dollar strengthened on the back of the weaker Equity Markets and I am still flat. I will leave my 1.1160/1.1210 buy level unchanged with the same 1.1119 tight stop. I do not want to chase the Euro lower and I will also leave my 1.1360/1.1400 sell level unchanged with a lower 1.1435 stop.
September Dollar Index
The Dollar rallied to my 97.20 sell level. I am still short and I will now lower my stop on this position to 97.75.
After the DAX traded the whole of my buy range for a 12280 average long position with an initial low of 12186, I emailed my Platinum Members to exit any long position at 12300 and I am still flat. Subsequently the DAX was hit hard, falling a further 300 points. The DAX has strong support from 11750/11860 where I will be a buyer with a 11675 stop.
My FTSE plan did not work well as after the market traded lower to my 6157 average buy level, I was stopped out of this trade at 6095 and I am still flat. This morning the FTSE is trading at 6050. We have strong support from 5880/5950 where I will again look to buy the market with a 5825 stop. If I am taken long I will have a T/P level at 6010.
Dow Rolling Contract
The Dow had a bad day yesterday, generating another Island Reversal while also closing below a major trendline that has held for the past few months. Big Board Down Volume was 93.4% relative to up Volume of 6.6%. Continuing to build value below 25000 signals a move to 25200, 24700/24500 and possibly 24000/23800. This is not a big move to play for and a break and close over 25850 will be bullish. Today I will be a small seller from 25700/25950 with a tight 26075 stop. Given the above support levels, I will be a buyer from 24700/24950 with a 24575 stop.
After the NASDAQ traded lower to my 9990 average long position I emailed my Platinum Members to exit any long position at 10025 and I am still flat. Despite the NASDAQ closing 2% lower yesterday we are still in an uptrend, trading just 3% below all-time highs. The NASDAQ has strong support from 9730/9850 where I will be an aggressive buyer with a 9655 wider stop. I still do not want to be short the NASDAQ at this time.
The BUND rallied hard yesterday, never coming close to my buy range and I am still flat. The Bund has resistance from 176.65/177.05 where I will be a seller with a 177.45 stop.
Gold Rolling Contract
I am still flat Gold, still not trusting this rally back to the 2012 highs. The negative divergence with Silver is a major concern. I will now lower my buy level to 1715/1725 with a lower 1703 stop.
Silver Rolling Contract
After Silver traded lower to my 17.40 buy level, I emailed my Platinum Members to exit any long position at 17.60 and I am still flat. Despite the weak equity markets, Silver is lower, trading at 17.40 this morning. Silver has support from 16.70/17.10 where I will be a buyer with a tight 16.35 stop. If I am taken long I will have a T/P level at 17.35.