On 05/10/2021 TraderTalent.com is bringing you another guest post from Bryan Noble.
U.S. Equity Markets reversed most of Friday’s gains as Interest Rate fears took centre stage again, finishing the day lower, led by the NASDAQ 100 which closed lower by 2.16%. Markets fell as Interest Rates picked up again. Remember, this is the theme the bears are pushing to try and drive the markets lower. They are saying that interest rates are picking up, indicating that borrowing costs will rise as well. And that hurts the growth outlook for companies. Tech companies were the most vulnerable to a sell-off on these fears. Elsewhere, the China trade deal was back in focus. United States Trade Representative Katherine Tai said the country needs to draw a stronger line with China on trade. She discussed the current Phase One Trade Agreement with China. She said the trade relationship between China and the U.S. is of profound importance. It not only affects the outcome for the global economy but it has consequences for workers everywhere. Thus, any headlines around U.S-China tensions could have a large impact on markets going forward. European Markets closed lower. European Central Bank Governing Council member Ignazio Visco said it should be careful reacting to temporary price increases and not pull back on monetary support too soon. Sentix’s Euro-Zone Investor Confidence data for October was weaker than anticipated, as survey respondents were less optimistic about the current and future environments. U.K. Chancellor of the Exchequer Rishi Sunak said the country was lining up $679 million in funding to help spur growth in the job market. In Asia, Japan’s ruling Liberal Democratic Party Secretary General Akira Amari said it is preparing a large extra budget to boost long-term economic growth. The U.S. State Department called on China to end its practice of “provocative” flybys near Taiwan, saying the flights risk undermining regional political stability. South Korea’s ministry of health said 77.3% of the country’s population has received the first COVID-19 vaccine shot while 526% of citizens are now fully vaccinated. Equity markets in China and Taiwan were closed for a public holiday. Elsewhere, Oil gained 2.25%, hitting a seven-year high after OPEC decided not to boost its monthly production by more than planned, while Bitcoin rose a further 2.53%, again on little news.
To mark my 2400th 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 lost 50 points yesterday and is now down 50 points for October after making 2866 points in 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 1.30% lower at a price of 4300.
The Dow Jones Industrial Average closed 323 points lower for a 0.94% loss at a price of 34,002.
The NASDAQ 100 closed 2.16% lower at a price of 14,472.
The Stoxx Europe 600 Index closed 0.4% lower.
This morning, the MSCI Asia Pacific Index fell 1.2%.
This morning, the Nikkei closed 2.19% lower at a price of 27,822.
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.2% higher at $1.1621.
The British Pound closed 0.5% higher at 1.3601.
The Japanese Yen fell 0.2%, closing at $111.13.
Germany’s 10-year yield closed two basis points higher at -0.21%.
Britain’s 10-year yield closed one basis points lower at 1.02%.
US 10 Year Treasury closed three basis points higher at 1.49%.
West Texas Intermediate crude closed 2.25% higher at $77.42 a barrel.
Gold closed 0.56% higher at $1,767.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Markit Services PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed by Euro-Zone PPI at 10.00 am and the U.S. Trade Balance at 1.30 pm. Next, we have Markit Services PMI at 2.45 pm. Finally, we have ISM Services PMI at 3.00 pm and a speech from Fed Member Quarles at 6.15 pm.
December S&P 500
The S&P reversed most of Friday’s gains, hitting a low of 4267 before having a 25 Handle rally into the close. After the S&P traded the whole of my buy range for a 4305 average long position, I emailed my Platinum Members to exit any long position for a small loss at 4298 and this was filled overnight, and I am now flat. I did not see yesterday’s down move happening, resulting in all three of my U.S. Markets trading the whole of yesterday’s buy ranges. This is a very rare occurrence. Even though the S&P may trade lower, I am still expecting a decent bounce on any test of the 4185 /4205 support area where I will be an aggressive buyer with a 4169 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 4240. The S&P has short term support at yesterday’s low. As a result, I will be a small buyer from 4255/4270 with a 4243 ‘’Closing Stop’’. If I am taken long here, I will have a T/P level at 4284. I still do not want to be short the S&P at this time.
Frustratingly, the Euro missed my 1.1645 T/P level with a 1.1640 high print, leaving me still long from last week at 1.1620. The latest Commitment of Traders Report shows that larger Speculators are net-long only 815 Euro Futures and Options Contracts. In late January, this cohort of trend-followers were net-long 163,821 Euro Contracts. So, they have essentially wiped out their net-long position as the Euro has declined All things being equal, this is a net-positive for prices. I will continue to add to my long position at 1.1560 while leaving my 1.1525 stop unchanged. Meanwhile, I will leave my 1.1645 T/P level unchanged.
December Dollar Index
The Dollar finally traded lower to my 93.80 T/P level on my 93.90 average short position from last week and I am now flat. This morning, the Dollar is opening higher at 94.00. We have resistance from 94.25/94.65 where I will be a seller with a 95.01 tight stop. If I am taken short I will have a T/P level at 93.95.
I am still flat. I will now lower my buy level to 14850/14930 with a lower 14775 stop. I still do not want to be short the DAX at this time If I am taken long I will have a T/P level at 14980.
No Change. I am still a buyer on any dip lower to 6890/6940 with the same 6855 stop. If I am taken long I will have a T/P level at 6970.
Dow Rolling Contract
After the Dow traded the whole of my buy range for a 33970 average long position, we hit an afternoon low at 33821 before rallying to an overnight high of 34062. I covered this long position at 33980 and I am still flat. With the Fear & Greed Index now showing ”Extreme Fear”, I am reluctant to chase the Dow lower We do have short-term resistance from 34420/34570 where I will be a small seller with a 34705 ‘’Closing Stop’’ The Dow has support from 33680/33830 where I will be a strong buyer with a 33545 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 34280. If I am taken long I will have a T/P level at 33970.
The NASDAQ traded the whole of my buy range for a 14500 average long position with a low of 14381. I am still long and I will now lower my T/P level to 14540. Meanwhile, I will leave my 14385 ‘’Closing Stop’’ unchanged.
I am still flat the Bund. I will now lower my buy level to 168.95/169.45 with a lower 168.49 stop. If I am taken long I will have a T/P level at 169.75.
Gold Rolling Contract
Gold traded in a narrow range yesterday and I am still flat. I will continue to be a small buyer on any further dip to 1717/1734 with the same 1703 stop. If I am taken long I will have a T/P level at 1743.
Silver Rolling Contract
No Change. I am still a buyer on any dip lower to 2160/22.20 with the same 20.95 stop. If I am taken long I will have a T/P level at 22.65.
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