On 10/08/2021 TraderTalent.com is bringing you another guest post from Bryan Noble.
U.S. Equity Markets declined to start the week, ending the day lower, led by the Dow which closed with a small loss of 0.31%, helping the VIX to rise by 3.50%. Markets opened lower before gaining throughout the day. Federal Reserve commentary spooked investors in the morning. Over the weekend, Dallas Federal Reserve President Robert Kaplan said that the central bank should begin tapering asset purchases sooner rather than later, adding that it should be done in a gradual manner. In terms of economic data, JOLTS Job Openings hit an all-time high for the fourth straight month in June, while hiring also picked up. Infrastructure was also in the news, with the Bill clearing a procedural hurdle in the Senate. There were also reports of an agreement on amendments regarding cryptocurrencies within the Bill. This set the Bill up to be passed (and sent to the House of Representatives) last night. European Markets closed higher. ECB Governing Council member Jens Weidmann said that Euro-Zone inflation could rise quicker than expected, adding that this would force the central bank to pull back on support. Euro-Zone investor sentiment fell to a three-month low in August, with concerns on prolonged COVID-19 restrictions weighing on optimism. French economic activity almost reached pre-pandemic levels in July, but in a monthly Bank of France survey, companies warned of supply-chain issues. In Asia, Japanese markets were closed for a holiday. Chinese social media site ByteDance will reportedly push forward with an initial public offering (“IPO”) in Hong Kong, despite the Chinese government’s pressure on technology companies. The Australian state of Victoria was said to be readying another extension of its COVID-19 restrictions as the country tries to conduct contact tracing for infections. Chinese export growth slowed in July, but still matched estimates, as rising COVID-19 cases hurt factory production. Elsewhere, Oil closed 2.64% lower as rising COVID-19 cases in Asia threatened the demand outlook for crude, while Gold fell 1.76% on little news. Meanwhile, Bitcoin, closed above its 200 Day Moving Average ($45,000).
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 72 points yesterday and is now ahead by 345 points for August, having closed July with a gain of 996 points. 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% lower at a price of 4432.
The Dow Jones Industrial Average closed 106 points lower for a 0.31% loss at a price of 35,101.
The NASDAQ 100 closed 0.16% higher at a price of 15,133.
The Stoxx Europe 600 Index closed 0.6% higher.
This morning, the MSCI Asia Pacific Index fell 0.3%.
This morning, the Nikkei closed 0.24% higher at a price of 27,888.
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.2% lower at $1.1741.
The British Pound closed 0.2% lower at 1.3848.
The Japanese Yen fell 0.2%, closing at $110.38.
Germany’s 10-year yield closed one basis points higher at -0.44%.
Britain’s 10-year yield closed two basis points lower at 0.59%.
US 10 Year Treasury closed three basis points higher at 1.32%.
West Texas Intermediate crude closed 2.64% lower at $66.40 a barrel.
Gold closed 1.76% lower at $1,729.10 an ounce.
This morning on the Economic Front we have the German and Euro-Zone ZEW Survey at 10.00 am. This is followed by U.S. NFIB Business Optimism Index at 11.00 am. Finally, we have Unit Labour Costs and Non-Farm Productivity at 1.30 pm.
September S&P 500
Frustratingly, the S&P just missed my 4133 initial sell level with a 4131.25 high print before selling off 14 Handles and I am still flat. The S&P had it’s smallest Daily Range since June as the market goes on ‘’hold’’ ahead of tomorrow’s key CPI data. I still believe that the S&P is setting itself up for a meaningful correction given the waning momentum, insane valuations and a Market Cap to GDP ratio above 209%. Last Friday, we had the release of the ratio of bullish -to – bearish wagers on the S&P 500 and NASDAQ 100 in Rydex Mutual Funds. In the life of the data, Rydex bulls have always heavily outnumbered bears at market highs, but the bulls became extremely jazzed about stocks on January 31, 2018, when the ratio hit a then record 27.3, meaning that Rydex traders had 27.3 times as much money invested in bullish funds as bearish funds. That week, the S&P and NDX both started a plunge of 12% in just 10 days. Fast forward to February 19, 2020, as the S&P hit a new intraday high, the Rydex pushed to 29.7, also a new record at the time. The S&P then crashed 35% in 23 days. On Friday, the ratio hit a new record of 42.8, so Rydex investors are betting 42.8 times as much money on a continued rise in stocks as they are on a decline. This is another reason not to own stocks at this time or if you do have a very tight trailing stop. Today, I will be a seller from 4135/4150 with a 4161 ‘’Closing Stop’’. Meanwhile, I will leave my 4378/4393 buy level unchanged with the same 4365 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 4125. If I am taken long I will have a T/P level at 4404.
I am still flat the Euro as the market tests the 1.1730 support area this morning. I will now lower my sell level to 1.775/1.1825 with a tight 1.1861 stop. If I am taken short I will have a T/P level at 1.1745.
September Dollar Index
No Change. I am still a small buyer from 91.70/92.30 with the same 91.35 stop. If I am taken long I will have a T/P level at 92.60.
The boring sideways price action at all-time highs continues and I am still flat. The DAX needs to break and close below 15500 for the market to turn bearish. Today, I will continue to be a buyer on any dip lower to 15480/15560 with the same wider 15395 stop. If I am taken long I will have a T/P level at 15605.
I am still flat and I will now raise my buy level to 6945/6995 with a higher 6895 stop. I still do not want to be short the FTSE at this time. If I am taken long I will have a T/P level at 7025.
Dow Rolling Contract
The Dow traded in a narrow range ahead of tomorrow’s key inflation release. I am still flat and I will continue to be a small buyer on any dip lower to 34720/34870 with the same 34595 ‘’Closing Stop’’. I will now lower my sell level to 35240/35410 with a lower 35535 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 34980. If I am taken short I will have a T/P level at 35140.
My NASDAQ plan worked well with the market trading higher to my initial 15130 sell level before trading lower to my 15070 T/P level and I am now flat. Subsequently the NASDAQ rallied back to it’s afternoon high where it closed. The NASDAQ has further resistance from 15190/15270. I will be a seller in this range with a 15355 ‘’Closing Stop’’. Meanwhile, I will continue to be a buyer on any dip lower to 14850/14930 with the same 14785 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 15130. If I am taken long I will have a T/P level at 14990.
No Change. I am still a seller on any rally higher to 17710/177.60 with the same 178.05 stop. If I am taken short I will have a T/P level at 176.80.
Gold Rolling Contract
Gold is trying to stabilise off Sunday Night’s ‘’Flash Crash’’. I am still flat and I will continue to be a buyer from 1695/1710 with the same 1678 wider stop. If I am taken long I will have a T/P level at 1722.
Silver Rolling Contract
Silver traded lower to my initial 23.30 buy level. As I wanted to be flat overnight, I emailed my Platinum Members to exit any long position at 23.42. This morning, Silver is opening higher at 23.60. We have strong support from 22.60/23.20 where I will again be a buyer with a 21.95 stop. If I am taken long I will have a T/P level at 23.65.
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