U.S. Equity Markets sold off yesterday, breaking their five-day winning streak, led by the NASDAQ which closed lower by 1.21%. Yesterday’s sell-off saw the VIX spike, closing higher by 10% at a price of 19.36. Markets opened lower and sold off throughout the day. Inflation commentary from the International Monetary Fund (“IMF”) spooked markets. The IMF said that the inflation we are seeing may not be temporary, and that central banks may need to step in. The IMF’s chief economist later tried to ease these concerns, saying that U.S. inflation is likely temporary, but the damage had been done. Infrastructure negotiations hit a snag, passing a self-imposed deadline, due to disagreements over funding and how to pay for the entire bill. The big catalyst for the week is now upon us – Big Tech earnings started after the close last night as reports from Apple (AAPL) and Google-parent Alphabet (GOOGL), showed both companies smashing their Earnings expectations. European Markets closed lower. France’s Foreign Ministry said Iran was hurting the chances of resurrecting the 2015 nuclear accord if it did not return to the bargaining table. European Central Bank Executive Board Member Fabio Panetta stressed the need for coordinated fiscal and monetary policy support if the region is to see a sustained recovery. The British government was said to be considering the removal of travel restrictions to the U.S. and European Union to boost tourism. In Asia, China’s Industrial Profit data for June showed growth slowed versus May, as the comparisons versus last year continued to grow more difficult. Chinese state-run media said the country won’t be “lectured by the U.S. on how to manage relations,” but instead the relationship must be based on mutual respect and fairness. Japan’s services sector Producer Price Index figures for June were stronger than expected, but fell versus May, as advertising, rent, and transportation fees rebounded. South Korea’s preliminary second-quarter gross domestic product figures were in line with expectations, putting the economy on track to meet the Bank of Korea’s 4% target for 2021. Elsewhere, Both Gold and Oil closed flat on little news while Bitcoin is trading 2% higher, sitting at $40,200 this morning.

To mark my 2350th 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 lost 125 points yesterday and is now ahead by 819 points for July after making 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, 2273 points in December, 2025 points in November, 2779 points in October, 3042 points in September and 2383 points in August. 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 0.47% lower at a price of 4001.

The Dow Jones Industrial Average closed 85 points lower for a 0.24% loss at a price of 35,058.

The NASDAQ 100 closed 1.12% lower at a price of 14,956.

The Stoxx Europe 600 Index closed 0.5% lower.

This morning, the MSCI Asia Pacific Index fell 0.9%.

This morning, the Nikkei closed 1.39% lower at a price of 27,581.

Currencies

The Bloomberg Dollar Spot Index closed 0.3% lower.

The Euro closed 0.2% higher at $1.1821.

The British Pound closed 0.5% higher at 1.3875.

The Japanese Yen rose 0.3%, closing at $109.82.

Bonds

Germany’s 10-year yield closed two basis points higher at -0.43%.

Britain’s 10-year yield closed one basis points lower at 0.56%.

US 10 Year Treasury closed three basis points lower at 1.25%.

Commodities

West Texas Intermediate crude closed 0.16% lower at $71.65 a barrel.

Gold closed 0.06% higher at $1,800.10 an ounce.

This morning on the Economic Front we already had the release of German GFK Consumer Confidence which fell 0.3% versus +0.9% expected. At 12.00 pm we have U.S. MBA Mortgage Applications, followed by Wholesale Inventories and the Trade Balance at 1.30 pm. Finally, we have the FOMC Statement at 7.00 pm and the Powell press Conference at 7.30 pm.

Earnings due today: Mcdonald’s (MCD) Paypal (PYPL) and Facebook (FB) which will be released after the close.

September S&P 500

The recent up and down price action is not the sign of a healthy market as reflected in the VIX which spikes on any hint of a sell-off. The recent 10% plus sell-off in Chinese stocks is a warning how quickly this market can reverse, while the McClellan Oscillator continues to trade in negative territory almost every day. Yesterday, the S&P traded the whole of my buy range for a 4373 average long position before rallying to an overnight high of 4401. I covered this long position at my 4377 revised T/P level and I am still flat. Ahead of the FOMC Statement and Powell press conference I would expect the S&P to trade sideways as we wait to see how much more Powell can continue this rally given the insane Monthly QE of $120bn when inflation is over 5%. In my opinion it is extremely unlikely that inflation is ‘’transitory’’ and this reckless monetary policy by the Fed will come back to haunt them. However, with Powell’s term not up until February, he will do whatever he can to prevent any sell-off ahead of him seeking to stay as Fed Chairman. I will now lower my sell level to 4415/4430 with a 4441 ‘’Closing Stop’’. The S&P has short-term support from 4350/4365 where I will again be a buyer with a 4339 ‘’Closing Stop’’.

EUR/USD

Frustratingly a number of my buy levels missed by tiny margins yesterday, including the Euro and I am still flat. The Euro has traded in a 100 point range for most of the past two months as volatility has shrunk to near all-time lows. Today, I will move my buy level higher to 1.1730/1.1770 with a higher 1.1695 stop.

September Dollar Index

I am still flat as I now lower my sell level to 92.80/93.30 with a 93.61 stop.

September DAX

Ahead of the FOMC Statement, I will now lower my DAX buy level to 15300/15380 with a lower 15229 stop. If I am taken long I will have a T/P level at 15425.

September FTSE

No Change. I am still a buyer on any dip lower to 6800/6850 with the same 6765 stop. If I am taken long I will have a T/P level at 6880.

Dow Rolling Contract

I am still flat the Dow as the market again missed my buy level before rallying 200 points off its 34870 low print into the close. Today I will lower my buy level to 34620/34780 with a 34495 ‘’Closing Stop’’. I am not going to chase the Dow lower, leaving my 35250/35400 sell level unchanged with the same 35525 ‘’Closing Stop’’.

September NASDAQ

My NASDAQ plan did not work well as I stopped my self out of my 15000 average long position for a loss at 14890 and I am still flat. I do not like the price action in the NASDAQ as the market sold off despite super earnings from Apple, Google and Microsoft. Remember a market that cannot rally on good news needs to be watched carefully. Chinese and Hong Kong stocks tumbled yesterday, while the Nasdaq Golden Dragon sub-sector trading Chinese tech did too, now down over 15% since last Thursday, the most since 2008. The NASDAQ has resistance from 15030/15130 where I will be a small seller with a 15205 ‘’Closing Stop’’. I do not want to be long the NASDAQ at this time.

September BUND

I am still flat the Bund as the market again rose yesterday. I will now raise my sell level to 176.60/177.00 with a higher 177.31 stop.

Gold Rolling Contract

No Change. I am still a small buyer from 1764/1779 with the same 1755 stop.

Silver Rolling Contract

I was stopped out of my latest 25.40 long position at 24.75 and I am now flat. Today, I will again be a buyer from 23.90/24.50 with a 23.45 stop. If I am taken long I will have a T/P level at 24.85.