On 19/08/2021 TraderTalent.com is bringing you another guest post from Bryan Noble.
U.S. Equity Markets extended this week’s long overdue decline, led by both the S&P and Dow which finished yesterday’s session with a loss of 1.07%. The VIX surged on the back of this latest sell-off, closing higher by 20%. Markets fell for the second straight day. Federal Reserve policy was the story of the day. On Tuesday, Federal Reserve Chairman Jerome Powell said it needs to put crisis tools away as the COVID-19 emergency has receded, implying the central bank is closer to winding down bond purchases. This was followed up by St. Louis Fed President James Bullard yesterday afternoon, who said he would like to see the central bank end its asset purchases in the first quarter of 2022, before raising rates for the first time in the fourth quarter of 2022. And the Fed’s Minutes from the most recent policy meeting showed that asset purchases may wind down towards the end of this year. That is why we saw markets spike lower just after 7 p.m. In terms of economic data, Housing Market data was mixed. Housing Starts fell short of estimates, while Building Permits beat expectations. But both remain elevated on a historical basis, indicating strong demand for homes. European Markets closed lower. U.K. Consumer Price Index (“CPI”) data for July was weaker than expected, easing versus June’s rate of growth, and showing no change. Euro-Zone final CPI for July was in line with the initial reading, as the year-over-year figures hit a 36-month high while the month-over-month numbers saw contraction. Spain’s government received $10.5 billion from the European Union’s recovery fund, with another $11.7 billion in funding coming in December. In Asia, Japan’s export data for July was weaker than expected, falling versus June, despite the total yen value holding steady near the highest level this year. Chinese shipping ports are seeing vessel backups increase as the country’s zero-tolerance COVID-19 policy delays the loading and unloading of ships. South Korea’s Prime Minister Kim Boo-kyum said the government will continue to provide aid to small businesses hurt by social-distancing restrictions, stating Seoul will try and avoid a lockdown. Australia’s second-quarter wage-price index figures showed the rate of growth slowed versus the first quarter, easing the case for rising inflation. Elsewhere, Oil fell another 1.70% on demand concerns, while Bitcoin fell over 2% on little news.
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 230 points yesterday and is now ahead by 1162 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 1.07% lower at a price of 4400.
The Dow Jones Industrial Average closed 382 points lower for a 1.07% loss at a price of 34,960.
The NASDAQ 100 closed 0.97%lower at a price of 14,857.
The Stoxx Europe 600 Index closed 0.7% lower.
This morning, the MSCI Asia Pacific Index fell 0.8%.
This morning, the Nikkei closed 1.1% lower at a price of 27,281.
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.1% lower at $1.1703.
The British Pound closed 0.2% lower at 1.3715.
The Japanese Yen fell 0.4%, closing at $109.95.
Germany’s 10-year yield closed two basis points lower at -0.49%.
Britain’s 10-year yield closed one basis points higher at 0.57%.
US 10 Year Treasury closed three basis points lower at 1.25%.
West Texas Intermediate crude closed 1.7% lower at $65.46 a barrel.
Gold closed 0.1% lower at $1,779.10 an ounce.
This morning on the Economic Front we have Euro-Zone Current Account at 9.00 am. This is followed by U.S. Weekly Jobless Claims and the Philly Fed Manufacturing Index at 1.30 pm. Finally, we have the EIA Natural Gas Storage Change at 3.30 pm.
September S&P 500
The negative breadth attending the new all-time highs signalled an impending decline, just as happened in July 2007 as outlined in this weeks Daily Commentary. The late-sell-off last night is accelerating this morning with the S&P trading 100 Handles lower from Monday’s 4473 all-time high. After the S&P hit my sell level yesterday at 4420, we rallied over 15 Handles, enabling me to cover this position at my revised 4429 T/P level and I am still flat. The August low of 4365 should offer some support but a break and close below 4350 will see this move accelerate to the downside. The 20% surge in the VIX saw the market close over both its 50 and 200-Day Moving Averages at 21.57. The 50-day Moving Average for the September Contract comes in at 4338. Every test of the 50 Day MA since the March 2020 low has been met by aggressive buying. Today, I will be a strong buyer on any further move lower to 4335/4350 with a 4323 ‘’Closing Stop’’. With the McClellan Oscillator closing at -166 last night I do not want to be short the S&P especially as we are close to trendline support. If I am taken long I will have a T/P level at 4364.
I was lucky with my 1.1720 long Euro position as the market rallied to my 1.1740 T/P level after the FOMC Minutes were released and I am still flat. This morning the Euro is opening at new lows for 2021, trading at 11670 as I go to post. The Euro has strong support from 1.1560/1.1620 where I will be an aggressive buyer with a 1.1495 stop. If I am taken long I will have a T/P level at 1.1660.
September Dollar Index
Thankfully the Dollar traded lower to my 9290 T/P level on my 93.10 latest short position and I am now flat. This morning the Dollar is trading higher at 93.45. We have strong resistance from 93.90/94.40 where I will again be a seller with a 94.75 stop. If I am taken short I will have a T/P level at 93.60.
I am still flat the DAX as the market approached the key 14700 support level. I will now lower my buy level to 15580/15660 with a lower 15525 tight stop. If I am taken long I will have a T/P level at 15710.
Shortly after I posted yesterday morning the FTSE traded lower to my 7125 T/P level on my 7160 short position and I am still flat. This morning, the FTSE is opening lower at 7044. We have strong support from 6920/6960 where I will be a buyer with a 6865 stop. If I am taken long I will have a T/P level at 7015.
Dow Rolling Contract
The Dow traded lower to my 35160 buy level before bouncing 160 points, enabling me to cover this position at my 35205 revised T/P level and I am still flat. The Dow has strong support from 34450/34600 where I will be a buyer with a tight 34295 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 34730.
The NASDAQ, only sold off in the last 10 minutes of trading last night, with the market hitting my buy range on the closing bell. I am not sure if anyone bought the market so late. I waited to buy which I did at the bottom of yesterday’s range at 14820. I am still long with the same 14745 ‘’Closing Stop’’. I will now lower my T/P level on this position to 14850.
No Change. I am still a small seller from 177.35/177.85 with the same 178.21 stop. If I am taken short I will have a T/P level at 177.05.
Gold Rolling Contract
Gold again missed my 1812 initial sell level before selling off to sit at 1780 this morning. Gold has short-term support from 1740/1755 where I will be a buyer with a 1729 stop. If I am taken long I will have a T/P level at 1766.
Silver Rolling Contract.
Overnight, Silver traded lower to my 23.10 buy level. We are seeing a small bounce this morning and I have now exited this long position here at 23.30 and I am now flat. Silver has support from 22.10/22.70 where I will again be a buyer with a 21.75 stop. If I am taken long I will have a T/P level at 23.10.
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