U.S. Equity Markets were closed yesterday for the Labour Day Holiday. However, the Futures Markets were open with the S&P September Contract rallying for most of the past 24 hours. In a recent report, the Financial Times said Goldman Sachs and Morgan Stanley were seeing clients reduce leverage in August. This is a sign that investors are lowering their risk exposure to the market. You see, experts closely watch margin debt as a sign of investor sentiment. A tell-tale sign of a euphoric market is how much money investors borrow to buy stocks. When you hear that someone is taking out a second mortgage to buy more of their favourite stocks, you know that you’ are deep in a Melt Up. So, when margin debt is high, more people are borrowing to increase their returns in the stock market. That is a sign that investors are extremely bullish. But these numbers tell us they are worried about the near-term move. After all, Federal Reserve Chairman Jerome Powell told us last week that the Fed could begin pulling back on bond purchases by the end of this year. And like I stated previously, September is the worst month of the year for the S&P 500. So, it should not come as a surprise that Wall Street money managers and traders are anticipating a sell-off. Usually, when institutional investors think the market may be too pricey from a valuation standpoint, they look for a 3% to 5% pullback before putting money to work. But if one does not materialise, they start to get antsy. Inevitably, that leads to that cash pile slowly trickling out into the market at first. But before long, as others notice a pullback is or isn’t materialising, the investing turns into a flood. This certainly explains the rally we have had in the S&P since the 4130 low on June 18. European Markets closed higher in light trading while the big story of the day was the 11% surge in Silver before reversing this move overnight.
To mark my 2375th 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 bryan@tradernoble.com for details
For anyone following my Platinum Service it was flat yesterday as none of my trades were hit and is still ahead by 375 points for September, having closed August with a gain of 1543 points, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, having ended March with an impressive gain of 3769 points, 3286 points in February, 2077 points in January, and 2273 points last 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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Equities
The S&P 500 closed 0.05% lower at a price of 4535.
The Dow Jones Industrial Average closed 75 points lower for a 0.21% loss at a price of 35,369.
The NASDAQ 100 closed 31% higher at a price of 15,652.
The Stoxx Europe 600 Index closed 0.5% higher.
This morning, the MSCI Asia Pacific Index rose 0.6%.
This morning, the Nikkei closed 0.82% higher at a price of 29,903
Currencies
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.2% lower at $1.1861.
The British Pound closed 0.1% lower at 1.3838.
The Japanese Yen fell 0.1%, closing at $109.89.
Bonds
Germany’s 10-year yield closed one basis points lower at -0.37%.
Britain’s 10-year yield closed two basis points lower at 0.69%.
US 10 Year Treasury closed two basis points higher at 1.34%.
Commodities
West Texas Intermediate crude closed 1.01% lower at $68.96 a barrel.
Gold closed 0.4% lower at $1,818.10 an ounce.
This morning on the Economic Front we already had the release of German Industrial Production which rose 1% versus +0.7% expected. At 10.00 am we have German and Euro-Zone ZEW Survey, while at the same time, Euro-Zone GDP and Employment Change will be released. There are no data releases due from the U.S. this afternoon.
September S&P 500
I am still flat. I will now lower my sell level to 4550/4565 while leaving my 4581’’Closing Stop’’ unchanged. The S&P has support from 4505/4520 and I will continue to be a small buyer on any dip to this area with the same 4489 ‘’Closing Stop’’.
EUR/USD
The Euro traded in a narrow range over the past 24 hours and I am still flat. We have support from 1.1780/1.1830 and I will continue to be a buyer in this area with the same 1.1745 tight stop. I still do not want to be short the Euro at this time.
December Dollar Index
I have now rolled to the December Contract. This Contact is trading at the same price as the September Contract. The December Contract has support from 91.50/91.90 where I will be a buyer with a 91.15 tight stop. If I am taken long I will have a T/P level at 92.25.
September DAX
The DAX rallied hard yesterday and I am still flat. Overall, the DAX has not moved in price since June. The DAX has resistance from 15990/16060 where I will be a small seller with a 16125 stop. Remember, the DAX needs to break and close below the key 15600 support, before we see a decent correction.
September FTSE
I am still flat and today, I will again raise my buy level to 7080/7130 with a higher 7045 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
I am still flat the Dow as we wait for the U.S Trading Desks to start getting back to normal after the Summer Holidays. The Dow has support from 35100/35250 where I will continue to be a buyer with a 34945 ‘’Closing Stop’’. Meanwhile, I will be an aggressive seller from 35800/36000 with the same 36175 ‘’Closing Stop’’.
September NASDAQ
No Change. I am still a seller from 15720/15810 with the same 15905 ‘’Closing Stop’’.
December BUND
The BUND traded in a narrow range yesterday and I am still flat. The Bund has support from 171.00/171.50 where I will be a buyer with a 170.65 tight stop. I will now lower my sell level to 172.65/173.15 with a lower 173.41 stop.
Gold Rolling Contract
No Change. I am still a buyer from 1786/1801 with the same 1773 stop. If I am taken long I will have a T/P level at 1808.
Silver Rolling Contract
Just before 6.00 pm last night, Silver went parabolic, surging over 11% in 15 minutes on no news, before subsequently reversing this move to trade at 24.52 this morning. I will now raise my buy level to 23.80/24.40 with a higher 23.45 stop. If I am taken long I will have a T/P level at 24.90.
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