On 28/06/2021 TraderTalent.com is bringing you another guest post from Bryan Noble.
U.S. Equity Markets ended the week on a high note, on heavy volume, due to the annual rebalancing of the Russell Indexes, with the Dow leading the gains, closing higher by 0.69%. Markets opened higher on follow through from Thursday’s infrastructure announcement, where the White House and a group of bipartisan Senators reached an agreement on an infrastructure bill worth $1.2 trillion in spending over the next eight years. After the close on Thursday, the Federal Reserve said all 23 large banks demonstrated strong capital levels in the latest stress tests. This means they are free to increase stock buybacks and dividends after June 30. Personal consumption expenditure (“PCE”) data were the other big story. Month-over-month PCE change rose 0.4% versus the expectation for a 0.5% increase. More importantly, it was a 0.6% rise a month ago. The core result also indicated slowing growth in inflation. These data are important for the stock market because the bears have been pitching rising inflation as a case against stocks. But the slowing month-over-month changes could ease the inflation fears. European Markets closed lower despite positive news. European Central Bank Governing Council member Isabel Schnabel said it will support a sustainable economic recovery while imploring governments not to remove stimulus too soon Germany’s leading candidate to replace Chancellor Angela Merkel said some European Union member countries are too fiscally conservative, implying he is open to spending more. Growth from Knowledge’s German Consumer Confidence data for July were stronger than expected, rising versus June, as individuals’ income expectations increased In Asia, The People’s Bank of China added another $4.6 billion worth of liquidity to the financial system via reverse repurchase operations. The Bank of Korea’s manufacturing confidence survey for July rose versus June, as optimism reached its highest level since mid-2011. Japan’s coronavirus vaccination campaign continued to build momentum as the government said 8 million doses had been administered, compared to 8.8 million one month ago. Elsewhere, Oil gained 0.94% on demand optimism surrounding the global economic recovery, while Bitcoin is now trading 2% higher after rising overnight.
To mark my 2350th 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 was flat on Friday and is still ahead by 899 points for June having made 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, 2273 points in December, 2025 points in November, 2779 points in October, 3042 points in September and 2383 points in August. 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 0.33% higher at a price of 4280.
The Dow Jones Industrial Average closed 237 points higher for a 0.69% gain at a price of 34,433
The NASDAQ 100 closed 0.14% lower at a price of 14,345.
The Stoxx Europe 600 Index closed 0.3% lower after a volatile trading session.
This morning, the MSCI Asia Pacific Index rose 0.1%.
This morning, the Nikkei closed 0.06% lower at a price of 29,048.
The Bloomberg Dollar Spot Index closed 0.1% higher.
The Euro closed 0.1% lower at $1.1927.
The British Pound closed 0.3% lower at 1.3895.
The Japanese Yen rose 0.1%, closing at $110.64.
Germany’s 10-year yield closed three basis points higher at -0.16%.
Britain’s 10-year yield closed three basis points higher at 0.77%.
US 10 Year Treasury closed two basis points higher at 1.52%.
West Texas Intermediate crude closed 0.94% higher at $74.06 a barrel.
Gold closed 0.22% higher at $1,780.10 an ounce.
This morning on the Economic Front we have a speech from ECB Member Panetta at 9.10 am and the Fed’s Williams at 2.00 pm. Finally, we have the Dallas Fed Manufacturing Business Index at 3.30 pm and a speech from Fed Member Quarles at 6.10 pm.
September S&P 500
The big news on Friday was the annual rebalancing of the Russell Indexes, when stocks are moved between the Russell Indexes like the Russell 2000 and Russell 1000 based on their size. It is the main reason why volume was so high on Friday with over 16 billion shares traded, the highest level since mid-March. Jefferies & Co, notes that Friday’s reshuffling lowers the quality of the Russell 2000 components to the lowest level since 2000. In other words, there are now more loss- making companies than at anytime in the past 21 years. The Index’s largest component is now AMC Entertainment, the MEME stock which has been losing money for seven straight quarters. Money-losers tend to be high- beta issues, so the Index’s volatility should rise. Just like 2000, the upcoming bear market will mean a lot of these companies will not survive. Just before Friday’s close the S&P rallied to my 4275 sell level. I am still short and I will now add to this trade at 4289 while leaving my 4301 ‘’Closing Stop’’ unchanged. I will now raise my T/P level on this position to 4269. The S&P has support from 4245/4260 where I will be a small buyer with a 4233 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 4271.
The boring sideways action in the Euro continues and I am still flat. Today, I will leave my 1.1840/1.1890 buy level unchanged with the same 1.1795 stop. If I am taken long I will have a T/P level at 1.1925
September Dollar Index
No Change. I am still a small seller on any further rally to 92.05/92.45 with the same 92.75 stop. If I am taken short I will have a T/P level at 91.80.
The DAX is still trading at the 15560 level where I marked prices last Friday. I still do not trust this market to move higher but until we break the key 15200/15300 support area, traders will continue to be a buyer on dips. Today I will raise my buy level slightly to 15340/15420 with a higher 15265 stop. If I am taken long I will have a T/P level at 15468.
No Change. I am still a small buyer from 6955/7005 with the same 6895 stop. If I am taken long I will have a T/P level at 7035.
Dow Rolling Contract
The Dow declined for 13 trading days from June 1 to June 18. The Five-Day rally since June 18 carried the Dow to 34501 on Friday, 1500 points higher from last Monday’s 33023 low print. The diverging performance between the Dow and S&P remains as long as the Dow does not break it’s May 10 all-time high of 35087. I am still flat the Dow and today. I will raise my buy level to 34200/34050 with a higher 33925 ‘’Closing Stop’’. The Dow has resistance from 34625/34775 and I will now raise my sell level to this area with a higher 34915 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 34330. If I am taken short I will have a T/P level at 34525.
I am still flat as the NASDAQ traded in a narrow range on Friday. I will now raise my buy level to 14220/14140 with a higher 14025 ‘’Closing Stop’’. Meanwhile, I will leave my 14480/14550 sell level unchanged with the same 14635 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 14285. If I am taken short I will have a T/P level at 14425.
The Bund is testing the key 171.70/172.00 support area as I go to press. I will now lower my sell level to 172.45/172.95 with a lower 173.41 stop. If I am taken short I will have a T/P level at 172.20.
Gold Rolling Contract
No Change. I am still a buyer from 1744/1759 with the same 1729 wider stop. If I am taken long I will have a T/P level at 1766.
Silver Rolling Contract
Silver just missed my 25.70 buy level before rallying to sit at 26.15 this morning. I am not going to chase the market higher, leaving my 25.10/25.70 buy level unchanged with the same 24.82 tight stop. If I am taken long I will have a T/P level at 25.98.
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