U.S. Equity Markets drifted after reports that any signing of a partial trade deal with China won’t happen until at least December, deflating early-session gains. Treasuries rebounded after dropping for three days. The S&P 500 Index eked out a narrow advance Wednesday while the Nasdaq Composite retreated on word that the signing of a preliminary trade agreement could be delayed as the parties wrangle over a venue. Tech stocks slid and shares in energy companies declined alongside West Texas crude after the EIA reported a big buildup in inventories. Health care and financials rallied. The Stoxx Europe 600 Index fluctuated before closing higher as data suggesting that the Euro-Area economy may be gathering momentum was offset by the International Monetary Fund’s warning of clouds on the horizon. Banks advanced after Societe Generale SA strengthened its key capital ratio, while global cleaning giant ISS A/S slumped after cutting its full-year outlook.
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A wave of interest-rate cuts by central banks and mounting hopes of a U.S.-China trade deal have buoyed confidence in markets just as key economic indicators show signs of stabilisation. While the latest data from Europe suggest a robust recovery may not be on the cards, the relative improvement eased fears that the global economy was hurtling toward a recession, prompting traders to temper bets for further monetary easing.
In Asia, benchmarks rose in Japan and Mumbai, but fell in Shanghai and Sydney. The Yuan strengthened past 7 per dollar for a second day, while the greenback held steady as investors awaited fresh developments on the U.S.-China trade front. Bloomberg’s gauge of raw-material spot prices climbed to its highest level since April.
The S&P 500 Index increased 0.1% to close at 3077.
The Dow Jones Industrial Average closed flat at 27,492.
The Stoxx Europe 600 Index closed 0.2% higher at 405, the highest level in more than four years.
The MSCI Emerging Markets Index declined 0.3% to 1063, the first retreat in a week.
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index was little changed at 1201, the highest in almost three weeks.
The Euro fell 0.1% to $1.1068.
The British Pound fell 0.2% to $1.2857.
The Japanese Yen strengthened 0.2% to 108.95 per dollar.
The yield on 10-year Treasuries decreased four basis points to 1.82%.
The two-year rate declined two basis points to 1.61%.
Germany’s 10-year yield declined two basis points to -0.33%.
Britain’s 10-year yield fell six basis points to 0.715%.
West Texas Intermediate crude fell 1.2% to $56.52 a barrel..
Gold strengthened 0.5% to $1,490 an ounce.
This morning on the Economic Front we have German Industrial Production at 7.00 am and this is followed at 9.30 am by UK Halifax House Price Index. Next, we have the Euro-Zone Economic Bulletin at 10.00 am and the Bank of England Rate decision at 12.00 pm. At 1.30 pm we have the U.S Weekly Jobless Claims. Finally, we have a speech from Fed Member Kaplan at 7.05 pm and Consumer Credit at 9.00 pm.
December S&P 500
The boring sideways action in the S&P continues as the market looks for direction towards its next move. The McClellan Oscillator continues to weaken while in contrast the VIX closed 3% lower at 12.70. I am still flat the S&P and today I will again raise my buy level slightly to 3049/3059 with a higher 3041 stop. Meanwhile I will leave my 3093/3103 sell level unchanged with the same 3111 stop.
I am still long the Euro at 1.1105 with the same 1.1059 stop. I will probably get stopped out of this position and if I do I will be back with a new update for my Platinum Members. I will also leave my 1.1115 T/P level unchanged.
December Dollar Index
The Dollar has not moved for the last 48 hours and I am still flat. I will leave my 98.10/98.50 sell level unchanged with a now lower 98.80 stop.
I forgot to do the DAX yesterday. However nothing happened as the market traded in a narrow range. The DAX has strong resistance from 13250/13330 and I will be a seller on any rally to this resistance area with a 13395 stop. Given how overbought the DAX is trading I still do not want to be long the market at this time.
I am still flat the FTSE and today I will raise my buy level to 7260/7300 with a higher 7225 stop.
Dow Rolling Contract
No Change as I am still an aggressive seller on any further rally to 27640/27790 with the same 27865 stop. The Dow has initial support from 27220/27320 and I will be a small buyer in this range with a tight 27145 stop.
The NASDAQ underperformed yesterday closing 0.3% lower. I am still flat and today I will lower my sell level to 8270/8330 with a 8371 stop.
My long 170.50 Bund position worked well with the market rallying to my revised 170.70 T/P level by closing higher at 170.87. Today I will again look to buy the Bund from 170.20/170.60 with a 169.85 stop. Given how oversold the Bund is trading I still do not want to be short the market at this time.
Gold Rolling Contract
The continuous theme of Gold rising one day and falling the next shows no sign of ending. The key level to watch is the 1459 September low and as long as Gold does not close below this key support then the market will be a buy on dips. Today I will raise my buy level slightly to 1460/1470 with a 1451 stop.
Silver Rolling Contract
I am still long Silver from Tuesday at 17.60 with the same 17.75 T/P level. I will continue to look to add to this position at 17.20 with a 16.85 stop. If any of the above levels are hit I will be back with a new update for my Platinum Members.