On 26/10/2021 TraderTalent.com is bringing you another guest post from Bryan Noble.
U.S. Equity Markets were volatile on Friday following comments from Fed Chair Jerome Powell, before turning around to post record highs to start the week, led by both the Dow and S&P 500 which closed higher by 0.18% and 0.47% respectively. Equities sold off on Friday because of commentary from Federal Reserve Chair Jerome Powell. Powell said that it is difficult to predict when the ongoing supply-chain issues will ease. And as a result, he could see the case for inflation remaining high for a longer period of time. If Powell is right that inflation will remain elevated into next year, it could push up the timeline for the central bank to withdraw support from the economy. And with the Fed already planning to begin winding down its asset purchases later this year, this withdrawal would come in the form of rate hikes. That is why we saw markets sell off as soon as these comments hit the wires. But markets quickly rallied off their lows… Earnings continue to remain a catalyst. With 23% of the S&P 500 reporting so far, 84% of these companies have beaten earnings estimates. We will see if this trend will continue this week, when earnings season really kicks into high gear. Yesterday, Equity Markets reversed all of Friday’s sell-off following a record close from Tesla which is now valued over $1 trillion. European Markets closed higher to start the week. Markit Euro-Zone’s preliminary composite purchasing managers’ index (“PMI”) data for October was weaker than expected on disappointing services sector activity. European Central Bank Governing Council member Ignazio Visco said Italy is committed to reducing its debt load to ensure price stability once the COVID emergency has passed. French automaker Renault said it would produce 500,000 fewer vehicles this year because of the ongoing chip shortage, up from its previous estimate of 220,000. In Asia, The People’s Bank of China injected roughly $14 billion worth of liquidity into the financial system for a second straight day, citing taxes and government bond payments. Japan’s Liberal Democratic Party is on track to maintain its parliamentary majority in the upcoming October 31 election, according to a poll by Kyodo News South Korea’s preliminary export data for October rose compared with September, as shipments to the U.S., China, and Japan gained due to continued strength in semiconductor demand. National Australia Bank’s third-quarter business confidence index declined from the second quarter as companies noted purchase costs increased to their highest level all year. Elsewhere, Oil closed unchanged at $83.75 having hit a morning high of $85.41 while Gold rose 0.30%.
To mark my 2425th 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 42points yesterday and is still ahead by 711 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 0.47% higher at a price of 4566.
The Dow Jones Industrial Average closed 64 points higher for a 0.18% gain at a price of 35,741.
The NASDAQ 100 closed 1.04% higher at a price of 15,514.
The Stoxx Europe 600 Index closed 0.4% higher.
Yesterday, the MSCI Asia Pacific Index fell 0.4%.
Yesterday, the Nikkei closed 0.71% lower at a price of 28,600.
The Bloomberg Dollar Spot Index closed 0.3% higher.
The Euro closed 0.1% lower at $1.1608.
The British Pound closed 02% lower at 1.3763.
The Japanese Yen rose 0.3%, closing at $113.69.
Germany’s 10-year yield closed two basis points lower at -0.12%.
Britain’s 10-year yield closed seven basis points lower at 1.14%.
US 10 Year Treasury closed six basis points lower at 1.63%.
West Texas Intermediate crude closed 0.01% higher at $83.75 a barrel.
Gold closed 0.30% higher at $1,807.10 an ounce.
This morning on the Economic Front we have the ECB Bank Lending Survey at 9.00 am. This is followed by U.S. Housing Price Index at 2.00 pm. Finally, we have Consumer Confidence, New Home Sales and the Richmond Fed Manufacturing Index at 3.00 pm.
December S&P 500
On Friday, the S&P just missed my 4513 buy level by two handles before surging to new all-time highs yesterday, which saw my 4561 average sell level executed. This rally to new highs is again driven by Central Banks and their insane QE policy. Both the Fed and ECB will not allow markets to trade lower as they are scared of a crash as nobody wants this scenario on their watch. This has been going on since QE started way back in 2009. The Fed has seen zero consequences from the insider trading scandal while Fed Chair Powell is richer than ever, benefitting from the easy money policies he insists upon in an inflationary environment. The S&P has now risen almost 300 Handles in two weeks and we are overbought again. I am still short the S&P and I will add to this trade again at 4581 with a now higher 4593 ‘’Closing Stop’’. I will now raise my T/P level on this position to 4552. I have no interest in buying the S&P at this time.
The Euro fell shy of my 1.1680 initial sell level and I am still flat. I will now lower my sell level to 1.1660/1.1710 with a 1.1751 stop. If I am taken short I will have a T/P level at 1.1630.
December Dollar Index
I am still flat. I will now raise my sell level to 94.20/94.70 with a 95.01 tight stop. If I am taken short I will have a T/P level at 93.95.
Ahead of the ECB Meeting on Thursday, the DAX has surged since Friday’s commentary. The ECB have hinted that they will announce new ways to buy even more assets in 2022. The DAX has support from 15340/15420 and I will raise my buy level to this area with a higher 15265 stop. If I am taken long I will have a T/P level at 15475.
I am still flat as the FTSE struggled to follow both the Dow and DAX higher. I will now raise my sell level to 7260/7310 with a 7345 tight stop. I still do not want to be long the FTSE at this time. If I am taken short I will have a T/P level at 7230.
Dow Rolling Contract
I am still flat. As I am now short both the S&P and NASDAQ, I will now raise my sell level to 36050/36220 with a higher and wider 36405 ‘’Closing Stop’’. The Dow has support from 35330/35480 where I will be a small buyer with a 35195 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 35920.
On the back of the weaker than expected Intel Earnings, the NASDAQ traded lower to my 15280 buy level before rallying to my too tight 15322 T/P level. With Tesla adding an incredible $100bn to its valuation yesterday, the NASDAQ surged, hitting my 15510 sell level. I am still short and I will add to this trade at 15610 with a now higher 15705 ‘’Closing Stop’’. I will now raise my T/P level on this position to 15455
The Bund stabilised on Friday after more bond buying from the ECB and I am still flat. I will now raise my buy level to 220.127.116.11 with a 166.95 tight stop If I am taken long I will have a T/P level at 168.25.
Gold Rolling Contract
Gold reversed last week’s losses, closing above $1800, despite the stronger U.S. Dollar I am still flat and I will now raise my buy level to 1760/1775 with a 1749 stop. If I am taken long I will have a T/P level at 1784.
Silver Rolling Contract
I am still flat. I will now raise my buy level to 23.50/24.10 with a 22.85 stop. If I am taken long I will have a T/P level at 24.50.
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