Stocks fell as trade talks between the U.S. and China struck another stumbling block, while Treasuries rose and the US Dollar declined after a gauge of American Manufacturing signalled contraction for the first time in three years. The S&P 500 dropped for the first time in four sessions as Chinese and American officials struggled to agree on a schedule for negotiations after Washington rejected Beijing’s request to delay tariffs that took effect over the weekend, according to a Bloomberg report. Technology shares weighed on benchmarks after Huawei Technologies accused the U.S. government of harassing workers and attacking its internal network. Boeing led losses on the Down Jones Industrial Average. The 10-year Treasury yield slid and the US Dollar dropped against peers after the Institute for Supply Management’s purchasing managers index fell to 49.1 in August, which when below 50 indicates manufacturing contracted. The reading joins a slew of weak numbers produced by factory gauges across the globe, and boosted bets on deep Interest Rate cuts by the Federal Reserve this year. In other news, Prime Minister Boris Johnson put the U.K. on course for a snap general election after suffering a humiliating defeat for his Brexit strategy in Parliament. Members of the House of Commons voted 328 to 301 to take a crucial first step toward forcing Johnson to delay Brexit by three months in an effort to stop a no-deal split — a delay he has repeatedly rejected under all circumstances. It was a stinging blow on a day that earlier saw Johnson lose his ruling majority after one of his own Conservative colleagues defected to a rival party.
To mark my 1900th 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 email@example.com for details
For anyone following my Platinum Service it made 175 points yesterday and is now ahead by 350 points for September, having made 2387 points in August, 1153 points in July, 1346 points in June,1722 points in May, 955 points in April and 1027 points in March. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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September has begun with a rocky start for risk assets as traders remain sensitive to the twists and turns of the Sino-U.S. trade war, and the first big economic data of the month reminded investors the global economy remains on shaky ground partly as a result. With mistrust on both sides, officials from the world’s two largest economies are struggling to agree on basic terms of re-engagement.
Although the S&P 500 Index closed 0.7% lower at 2906 the buy the dip have returned overnight with the market trading at 2930 as I go to press.
The Dow Jones Industrial Average fell 1.1% but these losses have also being mostly recovered with the Dow no trading 210 points higher at 26310.
The Stoxx Europe 600 Index slipped 0.2%.
Here is a summary of the main changes in F.X Markets:
The Bloomberg Dollar Spot Index fell 0.1%.
The Euro was little changed at $1.0965, having made a new low for the year at $1.0926.
The British Pound rose 0.2% to $1.2095, after briefly falling to the lowest since October 2016 at $1.1959. The Pound turned higher after U.K. Prime Minister Boris Johnson lost his majority in the House of Commons amid the ongoing Brexit brinkmanship
The Japanese Yen gained 0.2% to 106.04 per dollar.
The yield on 10-year Treasuries fell two basis points to 1.47%.
The yield on two-year Treasuries dropped four basis points to 1.46%.
Britain’s 10-year yield decreased one basis point to 0.406%.
West Texas-grade crude oil slipped below $54 a barrel amid concerns an economic slowdown from the trade war may dent demand. West Texas Intermediate crude closed 1.8% lower at $53.98 a barrel.
Gold rose 1.5% to $1,552.50 an ounce.
Copper decreased 0.9% to $2.52 a pound.
This morning on the Economic Front we have German, Euro-Zone and UK Markit Services PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed at 10.00 am by Euro-Zone Retail Sales. At 12.00 pm we have U.S MBA Mortgage Applications. At the same time we have ECB Member Lane’s speech. Next, we have the Trade Balance at 1.30 pm and the New York ISM Business Conditions at 2.45 pm. Finally, at 7.00 pm we have the Beige Book.
Today is a busy day for Fed speakers with Williams, Bullard, Bowman, Kashkari and Evans all speaking at 2.25 pm, 5.30 pm, 5.35 pm, 6.00 pm and 8.15 pm respectively.
September S&P 500
My S&P plan worked well with the market trading lower to my 2892 buy level before rallying to my 2898 T/P level and I am now flat. As long as the S&P holds the 2880 key support level the S&P is bullish. Overnight the buy the dip was back in force with the market now trading at 2930. This move higher comes despite the more and more evidence that the U.S is already in recession. Remember a market that cannot decline on bad news has to be ‘’Respected’’. If the S&P can hold the 2900 support this Evening then it is only a matter of time before we trade back to new highs before we see more concerted selling in the second half of the month. Today I will again look to buy the market from 2903/2913 with a 2895 stop. I still do not want to be short the S&P at this time.
I am still long the Euro at an average rate of 1.0975. I will leave my T/P level unchanged at 1.1010 while raising my stop on this position to 1.0945. If any of the above levels are hit I will be back with a new update for my Platinum Members.
December Dollar Index
Yesterday the Dollar made a high of 99.00 just missing my initial 99.05 sell level and I am still flat. So far the DSI is working for both the Euro and Dollar. Today I will lower my sell level to 98.80/99.20 with a lower 99.55 stop.
The DAX again missed my buy level before finally breaking above 12000 this morning. I am still flat and I will again raise my buy level to 11840/11920 with a 11775 tight stop.
This morning Boris Johnson has tabled a motion to hold a General Election. It is a Standard Motion so he needs a two-thirds majority. Markets like what is happening as both the Pound and FTSE have risen after yesterday’s dramatic events in Westminster. I am still flat the FTSE and I will now raise my sell level slightly to 7360/7400 with a 7445 stop.
Dow Rolling Contract
The idea of buying the Dow with wide stops worked well yesterday with the market trading lower to my 26000 buy level before rallying to my 26100 revised T/P level and I am now flat. The Dow is now trading at 26320 which is 350 points higher than yesterday afternoon’s low print. Despite all three US Indices closing 1% lower yesterday the McClellan oscillator still managed to close in positive territory with a +33 print. If the Dow can build value above 26400 then in my opinion it is only a matter of time before we make new highs which will be incredible after the volatile and vicious August. The Dow has short-term support from 26000/26150 and I will be a buyer in this area with a 25930 tight stop which is just below yesterday’s low print.
Unfortunately the NASDAQ just missed my 7565 buy level with a 7580 low before rallying to trade at 7705 this morning. I will now raise my buy level to 7590/7640 with a 7555 stop.
My Bund plan worked well yesterday with the market trading higher to my 176.80 sell level before falling 100 points. As my Bund record has been poor over the past few weeks I covered this short position at my revised 176.65 T/P level and I am now flat. Today I will again look to sell the Bund from 176.50/176.90 with a 177.20 stop.
Gold Rolling Contract
So far the 90% plus reading in the DSI has not led to a sell-off in Gold. I am still flat and despite Gold trading higher yesterday I will not raise my buy level and I will leave my 1495/1505 buy level unchanged with the same 1487 stop.
Silver Rolling Contract
Silver exploded yesterday to currently trade at 19.45 as I go to press after just missing my 18.30 buy level before having this strong rally. Thankfully we had no sell level in this market as just like Gold above the DSI is not working so far. Today I will raise my buy level to 18.60/19.00 with a 18.35 tight stop. If I am taken long I will have a T/P level at 19.30.
Frustratingly Cable just missed my 1.1950 buy level with a 1.1959 low print before having a huge rally to currently trade at 1.2140. The potential for Sterling to rally is huge as the whole world is short and in my opinion all the bad news is in the price. Given my comments on Cable yesterday hopefully some of you just went ahead and bought the market without waiting for my buy range to kick in. Today I will raise my buy level to 1.2010/1.2070 with a 1.1950 stop. If I am taken long I will have a T/P level at 1.2190.