On 02/09/2021 TraderTalent.com is bringing you another guest post from Bryan Noble.
U.S. Equity Markets were somewhat mixed on Wednesday, finishing the day largely higher, despite selling off into the close. While the NASDAQ 100 closed 0.19% higher, the Dow again finished with a small loss (-0.14%). Payroll processor ADP’s monthly employment data for August came up short of expectations ahead of Friday’s important jobs report. If we see a similar reading tomorrow, that could delay the Federal Reserve’s need to ease monthly bond purchases. The Commerce Department said that construction spending rose by 0.3% in July after being unchanged in June. Construction spending also increased by 9% versus the year prior in July. The Institute for Supply Management (“ISM”) reported that U.S. manufacturing activity unexpectedly increased in August amid strong order growth. However, a measure for factory employment fell to a nine-month low due to the ongoing labour shortage. European Markets closed higher. European Central Bank Governing Council member Yannis Stournaras said it should not be in a rush to react to the recent inflation increase following next week’s policy meeting. He feels the gains are temporary and that pulling back on economic stimulus too soon would be a mistake. Markit Euro-Zone’s final manufacturing Purchasing Managers’ Index (“PMI”) data for August was in-line with the initial reading, as unfilled orders hit a record. The European Union said it hit its target of 70% of adults vaccinated, possibly boosting the economic outlook. European Central Bank Vice President Luis de Guindos said the central bank will maintain favorable financing conditions but will investigate removing stimulus when it is appropriate. European Union COVID-19 vaccinations increased to 529.9 million through yesterday, with more than 249.4 million individuals having been fully inoculated. In Asia, former Bank of Japan Assistant Governor Kazuo Momma said the country’s Central Bank will continue to introduce economic stimulus no matter who wins the upcoming election. Caixin China’s manufacturing PMI data for August unexpectedly contracted, hitting the lowest level since February of last year, as new orders dropped for the second straight month. South Korea’s export figures for August exceeded expectations, rising compared to July, with the Trade Ministry saying August saw its highest value total on record. Markit Taiwan’s manufacturing PMI reading for August saw the rate of growth ease versus July, as supply-chain woes constrained factory production. Elsewhere, Oil fell 0.32% as the U.S. reported a larger-than-expected build in gasoline inventories, while Bitcoin rose 3% after mutual fund Franklin Templeton said it is looking to hire to expand its cryptocurrency operations.
To mark my 2375th 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 protected] for details
For anyone following my Platinum Service it made 205 points yesterday, on the first trading day of September, having closed August with a gain of 1543 points, and 996 points in July. The Platinum Service made 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, and 2273 points last December. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
The S&P 500 closed 0.09% higher at a price of 4524.
The Dow Jones Industrial Average closed 48 points lower for a 0.14% loss at a price of 35,312.
The NASDAQ 100 closed 0.19% higher at a price of 15,611.
The Stoxx Europe 600 Index closed 0.3% higher.
This morning, the MSCI Asia Pacific Index rose 0.1%.
This morning, the Nikkei closed 0.32% higher at a price of 28,542
The Bloomberg Dollar Spot Index closed 0.4% lower.
The Euro closed 0.4% higher at $1.1841.
The British Pound closed 0.2% higher at 1.3775.
The Japanese Yen rose 0.2%, closing at $109.91.
Germany’s 10-year yield closed one basis points higher at -0.37%.
Britain’s 10-year yield closed seven basis points higher at 0.69%.
US 10 Year Treasury closed three basis points lower at 1.29%.
West Texas Intermediate crude closed 0.32% lower at $68.54 a barrel.
Gold closed 0.02% higher at $1,818.10 an ounce.
This morning on the Economic Front we have Euro-Zone PPI at 10.00 am. This is followed at 1.30 pm by U.S. Weekly Jobless Claims, Trade Balance, Unit Labour Costs and Non-Farm Productivity. Finally, we have Factory Orders at 3.00 pm.
September S&P 500
It is no wonder that both European and U.S. Indexes have made new highs almost every week during the months of June, July and August as despite all the taper talk, the ECB and Federal Reserve have added $1 trillion to their balance sheets. For reference, it took the ECB and Fed Three Years to expand their combined balance sheets between January 2009 and December 2011. So what took three years, they have just done in three months. One of the most common technical events in markets is a reconnect with the 5EMA. Whether it is a bull or bear phase, this EMA acts as support or resistance and gets tagged on a regular basis. Yes, there are some months where it does not get tagged, but it always gets tagged. But not so far in 2021. Of note, in the past 15 years the S&P has tagged its Monthly 5 EMA in the month of September in every single year but one which is a 95% hit rate. The one year it did not hit was 2018, just before we saw a 20% correction in Q4 of that year. This bubble continues to defy history. The 5 EMA sits at 4383, 5% below current prices which does not seem like a big deal. However, a sell-off of this size will see all major trendlines broken and could lead to a dramatic fall in Global Indexes. Yesterday, my latest 4538 short position worked well with the S&P trading lower to my 4525 T/P level and I am now flat. Today, I will again be a seller from 4538/4560 with the same 4571 ‘’Closing Stop’’. Meanwhile, I will continue to be a buyer from 4477/4492 with the same 4465 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 4526. If I am taken long I will have a T/P level at 4503.
Although the Daily price movements in the Euro has been small, the Euro has still closed higher in 8 of the past 9 sessions. I am still flat myself and I will now raise my buy level to 1.1760/1.1805 with a higher 1.1705 stop. If I am taken long I will have a T/P level at 1.1835.
September Dollar Index
I will now lower my sell level to 92.80/93.30 with a lower 93.71 stop. If I am taken short I will have a T/P level at 92.55.
The DAX just missed my sell range yesterday, before falling over 200 points and I am still flat. The DAX has strong support from 15560/15640 where I will be a buyer with a 15495 stop. If I am taken long I will have a T/P level at 15690.
No Change. I am still a buyer on any dip lower to 7030/7080 with the same tight 6995 stop. If I am taken long I will have a T/P level at 7110.
Dow Rolling Contract
Overnight, the Dow traded lower to my 35250 buy level before rallying this morning to my 35305 T/P level as emailed to my Platinum Members and I am now flat. The Dow has support from 35050/35200 where I will again be a buyer with the same 34895 ‘’Closing Stop’’. I will now lower my sell level to 35700/35900 with a 36105 wider ‘’Closing Stop’’. If I am taken long I will have a T/P level at 35320. If I am taken short I will have a T/P level at 35550.
My NASDAQ plan worked well with the market trading higher to my initial 15690 sell level before falling 90 points. I covered this short position too-early at 15670 and I am still flat. Today, I will again be a seller from 15690/15780 with the same 15905 ‘’Closing Stop’’. I still do not want to be long the NASDAQ at this time. If I am taken short I will have a T/P level at 15630.
No Change. I am still a seller from 175.80/176.30 with a 176.61 stop. If I am taken short I will have a T/P level at 175.50.
Gold Rolling Contract
I will now raise my buy level to 1775/1790 with a higher 1763 stop. If I am taken long I will have a T/P level at 1797.
Silver Rolling Contract
With Silver trading at 24.20 this morning, I will now raise my buy level to 23.10/23.70 with a higher 22.65 stop. If I am taken long I will have a T/P level at 24.05.
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