Following a volatile trading session U.S. Equity Markets finished the day lower led by the 1.23% fall in the Dow, resulting in the VIX closing higher by a further 5% at a price of 23.93. Markets were lower Tuesday as numerous Federal Reserve officials quell notions of an imminent dovish outlook on 2023 rate policy. Cleveland Fed President Loretta Mester stressed that she has not yet observed the data that inflation has peaked. And San Francisco Fed President Mary Daly said that the Fed’s work on inflation is nowhere near done, while Chicago Fed President Charles Evans said that 2023 could end with a 4.00% Federal-Funds rate. June Job Openings fell for the third straight month, hitting the lowest level since September 2021. Within the S&P 500, all 11 sectors finished lower. European Markets closed lower. The telecom and energy sectors rose on the day but were overshadowed by a fall in the technology and travel sectors. Ukraine officials said that it could take months for grain exports to reach pre-war levels, and optimism around easing global supply pressures waned. Consensus polling and the Institute of Economic Affairs’ panel now favour a 0.50% rate hike by the Bank of England this week. In Asia, China and Taiwan encountered the greatest volatility, as U.S. Speaker of the House Nancy Pelosi visited Taiwan on Tuesday. A survey from analytics firm China Beige Book showed the economy weakening in July as continued COVID-19 lockdowns hurt rebound efforts. South Korea’s Consumer Price Index rose 6.3% year over year last month, a 24-year high. Elsewhere, Oil closed 0.39% higher while Gold fell 0.54% as a result of a stronger Dollar.
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For anyone following my Platinum Service it made 280 points yesterday and is now ahead by 817 points for August, having made 2660 points in July, following a gain of 3371 points in June. The Service made 3651 points in May, after making 762 points in April, following a gain of 5883 points in March. The Platinum Service made an impressive 5324 points in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
The S&P 500 closed 0.67% lower at a price of 4091.
The Dow Jones Industrial Average closed 402 points lower for a 1.23% loss at a price of 32,396.
The NASDAQ 100 closed 0.30% lower at a price of 12,901.
The Stoxx Europe 600 Index closed 0.6% lower.
This morning, the MSCI Asia Pacific Index rose 0.6%.
This morning, the Nikkei closed 0.51% higher at a price of 27,734.
The Bloomberg Dollar Spot Index closed 0.8% higher.
The Euro closed 0.9% lower at $1.0173.
The British Pound closed 0.8% lower at 1.2162.
The Japanese Yen fell 1.3% closing at $133.15.
Germany’s 10-year yield closed 3 basis points higher at 0.81%.
Britain’s 10-year yield closed 6 basis points higher at 1.87%.
US 10 Year Treasury closed 15 basis points higher at 2.74%.
West Texas Intermediate crude closed 0.39% higher at $93.85 a barrel.
Gold closed 0.54% lower at $1761.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Global Composite PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed by Euro-Zone PPI and Retail Sales at 10.00 am. Next, we have U.S. MBA Mortgage Applications at 12.00 pm and Global Composite PMI at 2.45 pm. Finally, at 3.00 pm we have ISM Services and Factory Orders.
Cash S&P 500
The S&P again found resistance at 4140. Although volumes were low yesterday, given the fact that many traders are on vacation, it did not stop the S&P from having plenty of two-way volatility. The late sell-off saw the McClellan Oscillator fall for the second consecutive session since hitting Friday’s overbought +287 print, by closing at +202 last night. So much good news is priced into the market it will take something special to take out all the main Moving Averages mentioned in yesterday’s Commentary. In short, the S&P needs to break and close above 4150 for the market to move higher. Yesterday, my S&P plan worked well with the market trading higher to my 4122 sell level before selling off to my 4107 T/P level and I am now flat. The S&P made a high at 4144 before falling 60 Handles into the close and again overnight. Positive Asian Markets this morning sees the S&P higher at 4104 as I go to press. We have strong resistance from 4130/4150 where I will an aggressive seller with a 4165 ‘’Closing Stop’’. The S&P has support from 4040/4060 where I will be a buyer with a 4029 ‘’Closing Stop’’. We have lots of Fed speakers this afternoon which should lead to continued two-way price behaviour.
The Euro got hit hard in the past 24 hours, trading the whole of my buy range for a now 1.0185 average long position. I will leave my 1.0125 tight stop unchanged while lowering my T/P level to 1.1095. If any of the above levels are hit I will be back with a new update for my Platinum Members. I still do not want to be short the Euro at this time.
March Dollar Index
My long 104.95 Dollar position from yesterday morning worked well with the market trading higher to my 105.35 T/P level and I am still flat. This morning the Dollar is trading higher at 106.10. We have support from 104.80/105.40 where I will be an aggressive buyer with a 104.35 stop. The Dollar has short-term resistance from 106.60/107.20 where I will be a small seller with a tight 107.65 stop.
The DAX has been tricky to trade over the past week. We are seeing plenty of price action but within a narrow range. I do not like holding a DAX position overnight given the fact that the Official Market closes at 9.00 pm while overnight, the spread betting firms make their own prices. Yesterday after the DAX hit my 13480 sell level, the DAX did fall by 100 points but unfortunately I emailed my Platinum Members to exit any short position at 13465 and I am still flat. Today, I will be a small seller from 13560/13650 with a tight 13705 stop. I still do not want to be long the DAX at this time.
My FTSE plan worked well with the market again hitting my 7430 sell level before selling off to my 7395 T/P level ahead of the New York close and I am still flat. The price action in the FTSE has been narrow for the past 10 days despite the ongoing political mess in the U.K. The FTSE has resistance from 7470/7530 where I will again be a seller with a 7581 stop. I still do not want to be long the FTSE at this time.
Dow Rolling Contract
Overnight, the Dow just missed my initial 32350 buy level with a 32375 low print before turning around and rallying 150 points. I am still flat. As the Dow traded heavy all-day yesterday, I will now lower my buy level to 32050/32300 with a wider 31895 ‘’Closing Stop’’. The Dow has now closed over its 50 Day MA (31623) for the 11th consecutive session. This support level is now becoming more and more important. However, we are seeing some negative divergence at Monday’s highs so a small pull back makes sense before we see the next leg-up. I have no interest in chasing the Dow lower. Surprisingly, the ‘’Fear & Greed Index only rose slightly again last night, closing at 41 which is still a reading of ‘’Fear’’. A 50 print is neutral and when this happens it should propel the Dow higher given the level of bearishness amongst traders and Fund Managers.
Cash NASDAQ 100
No Change. I will not chase the NDX higher despite the fact we traded above 13000 before seeing a late 150 points sell-off. Today, I will continue to be a buyer on any dip lower to 12530/12730 with the same 12385 stop.
The Bund traded to a high at 159.65 yesterday before falling 250 points. Thankfully, we had no ‘’Closing Stop’’ on my 158.10 average short position, able to take advantage of the afternoon sell-off as the Bund hit my 157.70 T/P level and I am now flat. This morning, the Bund is trading higher at 158.05. We have resistance from 158.80/159.60 where I will again be a seller with a 160.05 ‘’Closing Stop’’.
Gold Rolling Contract
I am still flat. Gold is trading $20 lower since I marked prices 24 hours ago on the back of the stronger Dollar. I will now lower my buy level to 1727/1742 with a tight 1715 stop. If I am taken long I will have a T/P level at 1753.
Silver Rolling Contract
No Change. I am still long from Friday at 20.08 with a now lower 20.55 stop. I will leave my 19.55 stop unchanged and if any of the above levels are hit I will be back with a new update for my Platinum Members.