U.S. Equity Markets rose, sending the benchmark S&P 500 Index back above the 3,000 level, as investors assessed a batch of strong earnings and signs of progress in trade talks with China. Treasuries fell and the US Dollar rose. Equities extended gains after Blooomberg reported that U.S. Trade Representative Robert Lighthizer is set to travel to China next Monday for the first high-level, face-to-face trade negotiations between the world’s two biggest economies since talks broke down in May. It looks we are starting to see perhaps both sides building more good faith for continuing negotiations. It seems like they’re making progress, which is good, and the market applauds something like that. The S&P 500 climbed for a second day as Coca-Cola reached a record high, while United Technologies jumped after the duo posted earnings that topped estimates. PulteGroup, Zions Bancorp and Whirlpool all tumbled after results disappointed. Strong earnings helped the Stoxx Europe 600 gain, with upbeat reports from heavyweights including UBS, Santander, Hermes and AMS.
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For anyone following my Platinum Service it lost 15 points yesterday and is now ahead by 847 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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The S&P 500 climbed for a second day as Coca-Cola reached a record high, while United Technologies jumped after the duo posted earnings that topped estimates. PulteGroup, Zions Bancorp and Whirlpool all tumbled after results disappointed The S&P 500 Index closed 0.7% higher at 3005 helped by the VIX which fell 9% to close at 12.61. The Nasdaq Composite Index increased 0.6% and the Dow Jones Industrial Average climbed 0.7%. In Europe, strong earnings helped the Stoxx Europe 600 gain, with upbeat reports from heavyweights including UBS, Santander, Hermes and AMS, as the Stoxx closed 1% higher, the third straight increase.
Here is a summary of the main changes in F.X Markets:
The Bloomberg Dollar Spot Index rose 0.4%, the third consecutive gain.
The Euro declined 0.5% to $1.1148, while the Japanese Yen weakened 0.4% to 108.25 per dollar.
The British pound fell 0.3% to $1.2435, the third straight decline after Boris Johnson was officially named by the Conservative Party as Prime Minister Theresa May’s replacement.
The yield on 10-year Treasuries rose 2 basis points to 2.07%. Meanwhile in Europe, Bond yields continued to fall with Germany’s 10 Year Yield closing 1 basis point lower at -0.37% and Britain’s 10-year yield fell 2 basis points to 0.69%.
West Texas Intermediate rose 1.3% to $56.93 a barrel.
Gold fell 0.6% to $1,417 an ounce.
The Bloomberg Commodity Index gained 0.3%.
This morning on the Economic Front we have German, UK and Euro-Zone Markit PMI at 8.30 am, 9.30 am and 10.00 am respectively. Also at 10.00 am we have Euro-Zone Money Supply and this is followed at 12.00pm US MBA Mortgage Applications. Finally, we have US Markit PMI and New Home Sales at 2.45 pm and 3.00 pm respectively.
September S&P 500
The S&P never came close to my buy level as strong earnings helped propel the market to near new all-time highs as yet again anyone getting sucked in to selling the market are slammed. With the ECB Rate decision tomorrow ahead of the FOMC next Wednesday there is little reason to be short. One note of caution however, is that after the confirmed Hindenburg Omen which expires in September, we had another two HO’s over the past few days for a second confirmed HO and this does not expire until November. It is rare that we have two confirmed HO’s on board at the same time and definitely suggests that we are near a more meaningful sell-off, perhaps after we hit my 3050/3100 target level first mentioned here over 18 months ago. Today I will raise my buy level to 2982/2992 with a 2974 stop. I still do not want to be short the S&P at this time.
My long 1.1220 Euro position was quickly stopped out after the European Markets opened at 1.1185 and I am still flat. The renewed strength in the Dollar has surprised me but I have to respect the technical state of the market. As a result, I will now lower my sell level to 1.1220/1.1260 with a 1.1305 stop. With the Euro now trading near the bottom of it’s Daily Bollinger Band I will continue to be a buyer from 1.1070/1.1110 with a 1.1035 stop.
September Dollar Index
I am still flat the Dollar which rallied strongly yesterday to close with a gain of 0.4%. The Dollar has strong resistance from 97.80/98.20 and I will be a seller in this area with a 98.55 stop.
Thankfully we had no sell levels in the DAX yesterday as the market rallied over 250 points as yet again the key 12200/12250 support area held. Today I will raise my buy level to 12350/12410 with a 12295 tight stop.
After Boris Johnson as expected won the Conservative Leadership contest, the Pound sold off. This move lower in Sterling helped the FTSE to rally and I am still flat. Today I will be a small seller on any further rally to 7545/7585 with a 7620 stop.
Dow Rolling Contract
I have had the correct view in the Dow but unfortunately the market has rallied without me being able to get a long position on board and I am still flat. Today I will raise my buy level to 26990/27170 with a 26895 stop. I still do not want to be short the Dow at this time.
No Change as I am still a small seller on any further rally to 8010/8060 with a 8105 higher stop.
There is no stopping the rally in the Bund as we wait for the ECB tomorrow. Yesterday’s move higher saw the Bund hit my second sell level at 173.90 for a now average short position of 173.65. I will leave my 174.20 stop unchanged while raise my T/P level on this position to 173.55. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
The stronger US Dollar saw Gold have a small sell-off yesterday and I am still flat. Today I will leave my 1398/1406 buy level unchanged with the same 1391 stop.
Silver Rolling Contract
My latest 16.19 long Silver position worked well with the market trading higher to my 16.39 T/P level and I am now flat. Today I will again look to buy Silver from 15.90/16.20 with a 15.55 stop and a 16.35 T/P level if executed.