Both the S&P and NASDAQ closed higher following the release of strong economic data. The Empire State Manufacturing Index for September, which measures changes in Business Activity, had a reading of 17 versus the expectation for 6.9 and the prior month’s 3.7. This was the third straight month with a positive reading. This month’s acceleration in growth was stronger than any of Wall Street’s economists had anticipated. U.S. Industrial Production rose by less than expected in August, but kept the trend of increased activity intact. Now, all eyes turn to this evening’s Federal Reserve policy meeting and Fed Chair Jerome Powell’s press conference. The S&P and NASDAQ closed ended yesterday’s session with gains of 0.52% and 1.43% respectively. Meanwhile European Indices closed higher led by the FTSE. German Economic Sentiment for September beat expectations and rose versus August, indicating economic activity is likely to increase going forward. British Prime Minister Boris Johnson’s Bill that could rewrite parts of the Brexit treaty passed its first test in the House of Commons, potentially stoking tensions with the European Union. European Union leaders pressed China to open up its markets more to foreign investors by year’s end or risk straining the relationship between the two governments. Elsewhere, Oil closed 2.75% higher as hurricanes in the Gulf of Mexico hampered supply from the U.S, while Gold again closed flat.
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For anyone following my Platinum Service it was flat yesterday as none of my calls were hit and is still ahead by 1207 points for September, having made 2383 points in August, 3128 points in July, 2580 points in June, 2456 points in May, 4773 points in April, an incredible 9264 points in March, 2223 points in February and 2142 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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The S&P 500 closed 0.52% higher at a price of 3401.
The Dow Jones Industrial Average closed unchanged at a price of 27,993.
The NASDAQ 100 closed 1.43% higher at a price of 11,438.
The Stoxx Europe 600 Index rose 0.2%.
The MSCI Asia Pacific Index rose 0.8%.
This morning the Nikkei closed 0.09% lower at 23,475.
The Bloomberg Dollar Spot Index again closed 0.3% lower.
The Euro closed 0.2% lower at $1.1851.
The British Pound closed 0.8% higher at $1.2890.
The Japanese Yen closed 0.3% higher at 105.40 per dollar.
The yield on 10-year Treasuries closed unchanged at 0.67%.
Germany’s 10-year yield closed unchanged at -0.49%.
Britain’s 10-year yield closed two basis points higher at 0.22%.
The Bloomberg Commodity Index rose 0.3%.
West Texas Intermediate closed 2.75% lower at $38.28 a barrel.
Gold closed flat at $1,957.10 an ounce.
This morning on the Economic Front we already had the release of UK CPI for August which rose 0.2% versus 0.0% expected. At 10.00 am we have Euro-Zone Trade Balance and this is followed at 12.00 pm by U.S MBA Mortgage Applications and Retail Sales at 1.30 pm. At 3.00 pm we have Business Inventories and the NAHB Housing Market Index. Finally, at 7.00 pm we have the FOMC Statement followed by the Fed Chairman Powell’s press conference.
December S&P 500
As I am flat the September Contract, I have now rolled to the December Contract which trades at a 10 Handle Discount to the September Contract which expires at 2.35 pm on Friday. All eyes will be on the FOMC Statement which will be released at 7.00 pm. Tonight’s Statement will see an update of the summary of economic projections and a first look at the Fed’s 2023 forecasts while reiterating that the Fed will keep the policy rate effectively at zero until the economy has recovered. I also expect the Fed to raise it’s growth and employment forecasts for 2021 and 2022, setting the stage on how long it will take for the economy to return to full potential. The Fed will leave the size and composition of its asset purchases unchanged. Yesterday, the S&P made a high of 3418.50 just missing my 3421 initial sell level and I am now flat. As I have rolled to the December Contract, my sell level today will be from 3415/3430 with a 3444 stop. Meanwhile, I will continue to be a buyer on any dip lower to 3350/3365 with a 3339 stop.
The boring sideways action in the Euro shows no sign of ending with the market trading in a 50 point range for most of yesterday’s session and I am still flat. Ahead of the FOMC, I will leave my 1.1925/1.1965 sell level unchanged with the same 1.2005 stop. I will now lower my buy level to 1.1740/1.1790 with a lower 1.1695 stop.
December Dollar Index
No Change as I am still a buyer on any dip lower to 92.00/92.50 with the same 91.55 stop.
I have now rolled to the December Contract which trades at a 20 point Discount to the September Contract which expires on Friday morning. The December Contract has support from 13040/13120 where I will be a buyer with a 12975 stop.
I have now rolled to the December Contract which trades at a 30 point Discount to the September Contract which also expires on Friday morning. The FTSE although bid, has traded in a narrow range over the past week. The December Contract has support from 5970/6020 where I will be a buyer with a 5925 stop. Given the weakness in Sterling, I still do not want to be short the FTSE at this time.
The NASDAQ surged yesterday as yet again the 50 Day Moving Average has for now held all declines. I have now rolled to the December Contract which trades at a small 16 point Discount to the September Contract which expires at 2.35 pm on Friday. The NASDAQ has strong resistance from 11620/11750 where I will be a seller with a 11835 stop. The 50 Day MA comes in at 11166 this morning and as a result I will be a buyer on any dip lower to 11140/11240 with a 11055 stop. I will still be an aggressive buyer from 10850/10650 with the same 10535 wider stop.
No Change as I m still a buyer from 173.10/173.50 with the same 172.75 stop.
Gold Rolling Contract
I am still flat and ahead of the FOMC I will now lower my buy level slightly to 1928/1942 with a lower 1915 stop.
Silver Rolling Contract
No Change as I am still a buyer on any dip lower to 26.00/26.70 with the same 27.15 T/P level. If I am taken long I will have a stop at 25.35.