On 11/08/2021 TraderTalent.com is bringing you another guest post from Bryan Noble.
U.S. Equity Markets rebounded to new highs, led by Dow which closed with a gain of 0.46%, despite many negative divergences. The Federal Reserve was the big story in the morning. Multiple Fed speakers – Raphael Bostic (Atlanta), Eric Rosengren (Boston), and Thomas Barkin (Richmond) – came out with hawkish comments, indicating that the central bank could soon pull back on support for the economy. Later in the day, markets got a boost from the Infrastructure Bill, which passed through the Senate in a 69-30 vote. Now, the Bill heads to the House of Representatives, where it still faces uncertainty about any possible changes. But the Senate passage was enough to lift markets. Now, attention turns to this afternoon’s consumer price index (“CPI”) release, which will serve as an inflation gauge. This could give clues about the Fed’s future policy decisions. European Markets closed higher, led by the Euro-Stoxx which closed higher for the seventh consecutive trading session. German ZEW economic sentiment fell for the third straight month in August, since the economy faces risks from a fourth wave of COVID-19 and Chinese economic slowdown. The European Union reportedly said it will not change its list of countries deemed safe to travel to this week, while considering whether to remove the U.S. from the list. U.K. consumer spending rose in July as the removal of COVID-19 lockdowns spurred an uptick in consumer activity. In Asia, a weaker Yen boosted the earnings outlook for Japanese companies. Australian business confidence tumbled in July, as COVID-19 lockdowns hurt sentiment. South Korea raised its COVID-19 restrictions to the highest possible level as it prepares for another surge in cases. Chinese air travel fell to the lowest level since early 2020 as rising COVID-19 cases forced the government to limit travel. Elsewhere, Oil rose 3% ahead of the API crude inventory release, which was expected to show a decline in U.S. crude levels, while Bitcoin fell 1.5% on profit-taking.
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 144 points yesterday and is now ahead by 489 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 0.10% higher at a price of 4436.
The Dow Jones Industrial Average closed 162 points higher for a 0.46% gain at a price of 35,264.
The NASDAQ 100 closed 0.53% lower at a price of 15,053.
The Stoxx Europe 600 Index closed 0.4% higher.
This morning, the MSCI Asia Pacific Index fell 0.3%.
This morning, the Nikkei closed 0.65% higher at a price of 28,070.
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.2% lower at $1.1719.
The British Pound closed 0.2% lower at 1.3825.
The Japanese Yen fell 0.3%, closing at $110.68.
Germany’s 10-year yield closed one basis points lower at -0.45%.
Britain’s 10-year yield closed one basis points lower at 0.58%.
US 10 Year Treasury closed four basis points higher at 1.36%.
West Texas Intermediate crude closed 3.01% higher at $68.39 a barrel.
Gold closed 0.18% higher at $1,732.10 an ounce.
This morning on the Economic Front we already had the release of German CPI which came in as expected with a +3.8% print. At 12.00 pm we have U.S. MBA Mortgage Applications, followed by CPI at 1.30 pm. Finally, we have a speech from Fed Member Bostic at 3.30 pm and the Monthly Budget Statement at 7.00 pm.
September S&P 500
My S&P plan worked well yesterday with the market trading higher to my 4435 sell level before trading lower to my 4425 T/P level and I am now flat. We are starting to notice more and more anomalies in the S&P which brings into question how healthy this market is. If the S&P continues to make new all-time highs without a lot of ‘’internal support’’, then the durability of the uptrend is questionable. We know from history, when market internals do not confirm New Record Highs, then risk of a large Drawdown rises. Bond Markets are signalling economic weakness ahead and this is certainly not priced into the stock market. In my opinion, the S&P is as overvalued now as it was so undervalued in March 2020. Today, we have the all-important CPI where the consensus is for a rise of 0.5%. If we get a higher figure the Fed will be under pressure to taper. However, with debt at extreme levels the Fed cannot afford to raise rates. The S&P has resistance from 4437/4452 where I will again be a seller with a 4463 ‘’Closing Stop’’. I am not going to chase the S&P higher, leaving 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 4427. If I am taken long I will have a T/P level at 4404.
This morning, the Euro is testing its 2020 low, trading at 1.1709 as I go to press. The Euro is now oversold and has support from 1.1630/1.1680 where I will be a small buyer with a 1.1575 stop. If I am taken long I will have a T/P level at 1.1715.
September Dollar Index
I am still flat the Dollar as the market looks to test the key 93.50/94.10 resistance area. I will be a seller in this area with a 94.55 tight stop. If I am taken short I will have a T/P level at 93.20.
No Change. The boring sideways price action near all-time highs continues and I am still flat. Just like Gold, I do not trust this rally in the DAX. However, we need to break and close below 15500 for me to turn bearish. Today, I will leave my 15480/15560 buy level unchanged with the same 15395 stop. If I am taken long I will have a T/P level at 15605.
The FTSE continues its recent rally as thankfully we have not been short this market and are still flat. The FTSE has short-term resistance from 7160/7210 where I will be a small seller with a 7265 tight stop. If I am taken short I will have a T/P level at 7125.
Dow Rolling Contract
Late yesterday, the Dow traded higher to my 35260 sell level before having a small sell-off after the close. I did not want to be short overnight and I emailed my Platinum Members to exit any short position at 35235 and I am still flat. In my Opinion, the reflation trade is over as I pointed out in Monday’s Daily Commentary. Apart from Steel, most commodity prices are down over 10% from their recent highs. Asset prices need to be re-priced to reflect these changes, leading to a strong downdraft in the U.S Indexes. This is in turn will set up a huge year-end rally. The massively indebted U.S and European Economies cannot sustain any increase in Interest Rates as too much debt means Interest Rates have no staying power. The Dow has further resistance from 35360/35510 where I will again be a seller with a 35625 ‘’Closing Stop’’. I will not chase the Dow price higher, leaving my 34720/34870 buy level unchanged with the same 34595 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 35250. If I am taken long I will have a T/P level at 34980.
The NASDAQ missed my 15190 sell level with a 15155 high print before falling 150 points and I am still flat. I will now lower my sell level to 15130/15210 with a lower 15305 ‘’Closing Stop’’. I do not want to be long the NASDAQ at this time. A break and close below 14975 will see me look to set up a short position If I am taken short I will have a T/P level at 15070.
No Change. I am still a seller from 177.10/177.60 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 continues to build value below the key 1750 pivot point and I am still flat. Ahead of the CPI, I will now lower my buy level to 1688/1703 with a lower 1671 stop. If I am taken long I will have a T/P level at 1714.
Silver Rolling Contract
Overnight, Silver traded lower to my 23.20 buy level before having a small rally. I have now exited this long position at 23.38 and I am now flat. Today, my buy level will be from 22.30/22.80 with a lower 21.65 stop. If I am taken long I will have a T/P level at 23.15.
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