On 20/08/2021 TraderTalent.com is bringing you another guest post from Bryan Noble.
U.S. Equity Markets reversed morning losses to end yesterday’s volatile trading session mixed as the Small Cap Russell 2000 closed with a loss of 1.19% while the S&P 500 closed with a small 0.19% gain. Markets opened lower, before recovering and chopping around for the rest of the day. The Federal Reserve’s Minutes from Wednesday evening helped push markets lower. Essentially, the Fed indicated that it will begin pulling support from the economy soon. However, Jobless Claims helped markets rebound. Weekly jobless claims hit the lowest level since the pandemic’s onset at 348,000. The four-week moving average sits at 377,750 versus 396,250 last week. It was 1,027,000 a year ago. Continuing Claims, which represent those who have filed for unemployment for at least two weeks, were 2.82 million versus the expectation for 2.8 million and 2.86 million in the week prior. There were still concerns about the COVID-19 Delta variant, as Goldman Sachs lowered its US. Gross Domestic Product forecast because of the increased risk of infections. European Markets again closed lower. Investors unwound exposure to risk-based assets, as the Federal Reserve signalled it could start tapering bond purchases before year’s end, signalling the “easy” gains may have been made. A survey from the German Chamber of Industry and Commerce showed supply chain bottlenecks across almost all industries. The European Central Bank said regional bank capital returns should remain “prudent” and below pre-pandemic levels when buybacks and dividends resume later this year. In Asia, China’s regulatory authorities said the country would strengthen credit-rating agency supervision and improve information disclosure, while vowing “zero tolerance” on debt evasion. Japan’s manufacturing confidence hit its highest level in more than three years, according to a Reuters poll, as companies were increasingly optimistic about demand rebounding. Australia’s employment numbers for July rose unexpectedly, as a jump in part-time jobs offset a drop in full-time labour. Elsewhere, Oil fell a further 2.77% on demand concerns as the Delta variant sparks fears of slowing growth, while Bitcoin rose 5% as another high-profile athlete announced he will receive endorsement income in bitcoin.
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 375 points yesterday and is now ahead by 1537 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 0.19% higher at a price of 4406.
The Dow Jones Industrial Average closed 66 points lower for a 0.19% loss at a price of 34,894.
The NASDAQ 100 closed 51% higher at a price of 14,933.
The Stoxx Europe 600 Index closed 0.7% lower.
This morning, the MSCI Asia Pacific Index fell 0.8%.
This morning, the Nikkei closed 1.0% lower at a price of 27,009 – new lows for the year.
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.1% lower at $1.1689.
The British Pound closed 0.7% lower at 1.3632.
The Japanese Yen rose 0.3%, closing at $109.66.
Germany’s 10-year yield closed one basis points lower at -0.50%.
Britain’s 10-year yield closed three basis points lower at 0.54%.
US 10 Year Treasury closed two basis points lower at 1.23%.
West Texas Intermediate crude closed 277% lower at $63.69 a barrel.
Gold closed 0.08% lower at $1,778.10 an ounce.
This morning on the Economic Front we already had the release of U.K. Retail Sales which fell 2.5% versus +0.4% expected. The only other data of note is Canadian Retail Sales at 1.30 pm.
September S&P 500
Yet again we saw aggressive buying in front of the 50 -Day Moving Average as the S&P rallied from a morning low of 4347, to hit an afternoon high of 4414 before having a small sell-off into the close. My S&P plan worked well with the S&P hitting my initial 4350 buy level before rallying to my 4364 T/P level and I am now flat. With the S&P having made 49 record highs in 2021, there can be little doubt that stocks have made a remarkable recovery from the March 2020 low. In fact the S&P has now doubled from the pandemic bottom, achieving this feat in an unprecedented 353 trading days. The next closest period is from March 2009 which took 539 trading days, while the average is more like 1000 days according to analysis by CNBC. This speaks to just how extreme the recent move has been Moreover, it has now been 200 trading days since the S&P 500 experienced at least a 5% correction, about double the average since 1929. So, not only has the speed of the recovery been the fastest on record, but is has been achieved with very little volatility along the way. With the S&P 500 trading at a forward P/E of 21x versus the long-term average of 16x, this market is due a correction at the very least. Internally the market is extremely weak which is not healthy and once we finally break the 50 Day MA (4342 this morning) then the correction should accelerate. Last night the McClellan Oscillator weakened further, closing with a -213 print. Remember anything near -300 will see the stock market rally as we witnessed in July. The S&P has support from 4350/4365 where I will again be a buyer with a 4339 ‘’Closing Stop’’. The S&P has resistance from 4425/4440 where I will be a small seller with a 4451 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 4378. If I am taken short I will have a T/P level at 4415.
I am still flat and I will now raise my buy level to 1.1590/1.1640 with a tight 1.1545 stop. If I am taken long I will have a T/P level at 1.1670.
September Dollar Index
No Change. I am still a seller from 93.90/94.40 with the same 94.75 stop. If I am taken short I will have a T/P level at 93.65.
My DAX plan worked well with the market trading lower to my 15640 buy level before rallying back above 15800. This move higher saw my revised 15695 T/P level filled and I am still flat. Today, I will again be a buyer on any further dip lower to 15540/15620 with a 15485 tight stop. If I am taken long I will have a T/P level at 15670.
Unfortunately, the FTSE just missed my initial 6960 buy level by 8 points before rallying to sit at 7050 this morning. Today, I will raise my buy level to 6930/6980 with a 6875 stop. If I am taken long I will have a T/P level at 7020.
Dow Rolling Contract
My Dow plan worked really well as the market traded lower to my 34580 buy level before rallying over 400 points in the afternoon. This move higher saw my 34730 T/P level filled and I am still flat. This morning the Dow is trading close to its 50 Day MA which comes in at 34713. A break and close below here could well see a test of the 200 Day MA over the next few weeks. The 200 Day MA is at 32600 and any test of this key support will attract strong buying. Today, I will again be a small buyer from 34400/34550 with a 34285 ‘’Closing Stop’’. As we are so close to the 50 Day MA, I do not want to be short the Dow ahead of the weekend. If I am taken long I will have a T/P level at 34670.
The NASDAQ rallied hard yesterday off its morning low, hitting my 14850 T/P level on my 14820 long position and I am now flat. The NASDAQ has small resistance from 14990/15070 where I will be a seller with a 15145 ‘’Closing Stop’’. The 50 Day MA comes in at 14719 and this level will support any initial test. I will be a buyer from 14740/14640 with a 14545 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 14940. If I am taken long I will have a T/P level at 14810.
I am still flat. Ahead of the weekend I will now raise my sell level to 177.50/177.90 while leaving my 178.21 stop unchanged. If I am taken short I will have a T/P level at 177.25.
Gold Rolling Contract
I am still flat. I will now raise my buy level to 1750/1765 with a higher 1739 stop. If I am taken long I will have a T/P level at 1773.
Silver Rolling Contract
Silver continues to trade heavy and I am still flat. I will continue to be a buyer on any dip lower to 22.10/22.70 with the same 21.75 stop. If I am taken long I will have a T/P level at 23.05.
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