On 30/09/2021 TraderTalent.com is bringing you another guest post from Bryan Noble.
U.S. Equity Markets tried to rebound from the losses earlier in the week, ending yesterday’s session mixed, as the Dow closed higher by 0.26% while the NASDAQ 100 fell 0.12%. Markets attempted to bounce back from the two declines so far this week. Interest rates backed off their highs from yesterday, easing some of the recent fears over rising long-term rates. Fed speakers continued to make headlines. Federal Reserve Bank of St. Louis President James Bullard said the domestic economy is fully recovered and he sees the central bank starting the asset purchase taper next month. Fed Chair Jerome Powell continued his testimony before Congress, saying that he sees the current inflation pressures carrying on into next year. This is not anything different than he said yesterday. In terms of economic data, Pending Home Sales surged in August, in another strong showing for the housing market. European Markets closed higher. European Central Bank Governing Council member Peter Kazimir said the Emergency Policy Programme is in its final stages, but policy will remain flexible going forward. Euro-Zone economic confidence data for September was stronger than expected, rising versus August, as consumers were increasingly optimistic about the outlook. Euro-Zone consumer activity has rebounded to pre-pandemic levels, with people returning to domestic travel, shopping, and other activities, according to the Financial Times. In Asia, People’s Bank of China Governor Yi Gang said global central banks should avoid asset purchases because they are damaging over the long term and create moral hazards. China purchased a 20% stake in Shengjing Bank for $1.55 billion in an attempt to minimise domestic financial-system fallout from real estate developer China Evergrande’s debt woes. Japanese technology stocks fell on Micron’s disappointing revenue guidance and concerns higher interest rates could raise borrowing costs, weighing on profits. South Korea’s Chamber of Commerce and Industry said its fourth-quarter business sentiment index showed manufacturers expect conditions to worsen due to rising infections and supply-chain issues. Elsewhere, Oil fell 0.99% after EIA data showed an unexpected rise in U.S. crude inventories, while Gold closed 0.74% on continued Dollar strength.
To mark my 2400th 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 228 points yesterday and is now ahead by 3037 points for 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 0.16% higher at a price of 4359.
The Dow Jones Industrial Average closed 90 points higher for a 0.26% gain at a price of 34,390.
The NASDAQ 100 closed 0.12% lower at a price of 14,752.
The Stoxx Europe 600 Index closed 0.9% higher.
This morning, the MSCI Asia Pacific Index fell 0.2%.
This morning, the Nikkei closed 0.23% lower at a price of 29,474.
The Bloomberg Dollar Spot Index closed 0.6% higher.
The Euro closed 0.6% lower at $1.1605.
The British Pound closed 1% lower at 1.3440.
The Japanese Yen fell 0.3%, closing at $111.85.
Germany’s 10-year yield closed two basis points lower at -0.20%.
Britain’s 10-year yield closed two basis points lower at 0.98%.
US 10 Year Treasury closed one basis points lower at 1.53%.
West Texas Intermediate crude closed 0.61% lower at $74.83 a barrel.
Gold closed 0.74% lower at $1,723.10 an ounce.
This morning on the Economic Front we already had the release of UK Q2 Final GDP which rose 5.5% versus +4.8% expected. Next, we have German and Euro-Zone Unemployment at 8.55 am and 9.00 am respectively. This is followed by German CPI at 1.00 pm and the U.S. Weekly Jobless Claims, PCE and GDP at 1.30 pm. Finally, we have the Chicago Purchasing Managers’ Index at 2.45 pm.
December S&P 500
There is no doubt that the price action over the past few weeks was classic bear market action. We saw new highs on negative divergences with weakening internals, a tightening trend that broke to the downside, found support, then rallied for a few days before retesting levels beneath the broken trend and then rolled over the downside last Monday. We now have a different market, but still one that is soaked in liquidity, margin debt and very bullish positioning. The buy the dip mentality will take time to die and capitulate as we have seen overnight with another ramp up in the Dow and S&P. My own view is that we will eventually test the key 4160/4225 support area before attempting another ferocious rally, before eventually testing the key 4060 support level. The Third Standard Deviation for the S&P comes in 4221 and I would expect this level to provide initial support. This morning, the S&P rallied to my 4386 sell level before selling off and I have now exited this position here at 4375 and I am now flat. The S&P has resistance from 4392/4407 where I will be a seller with a higher 4421 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 4380 The S&P has support at yesterday’s 4343 low print. I will now raise my buy level to 4330/4345 with a higher 4319 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 4356.
The Euro got crushed yesterday, falling to it’s lowest level since last November. This move lower saw my 1.1620 buy level executed. I will now add to this trade at 1.1560 with a now lower 1.1525 stop. I will now lower my T/P level to 1.1645 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
December Dollar Index
The Dollar is now severely overbought after rallying a further 0.6% yesterday. This move higher saw my second sell level at 94.15 filled, for a now 93.90 average short position. I will now raise my stop on this position to 94.51 while raising my T/P level to 93.75.
The DAX continues to try and build value above Monday’s 15200 low print, trading higher at 15440 this morning. I will now raise my buy level to 15180/15260 with a higher 15125 stop. If I am taken long I will have a T/P level at 15305.
The FTSE continues to be the strongest of the European Indexes at this time, helped by the weakening pound. As a result, yesterday’s buy level never came close to been tested and I am still flat. The FTSE has support from 7010/7060 and I will move my buy level to this range with a higher 6975 stop. If I am taken long I will have a T/P level at 7095.
Dow Rolling Contract
Overnight, the Dow rallied to my 34630 initial sell level before having a small sell-off before 7.00 am, enabling me to cover this position at my revised 34582 T/P level as emailed to my Platinum Members and I am now flat. As long as the Dow does not break and close above 35100 I will continue to be a seller of rallies. The Dow has short-term resistance from 34750/34900 where I will be a seller with a 35050 ‘’Closing Stop’’. I still do not want to be long the Dow at this time. If I am taken short I will have a T/P level at 34590.
My NASDAQ plan worked well with the market trading higher to my 15915 sell level before selling off to my 15845 T/P level and I am still flat. The NASDAQ subsequently fell a further 100 points before regaining these points overnight. As long as the NASDAQ does not close above 15100 I will continue to sell the rallies. Today, I will be a seller from 15920/15010 with a 15105 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 15860.
Central Banks are desperate to keep Bond Yields lower and disconnected from actual inflation data, which is the ‘’transitory’’ narrative that nobody believes. Today’s German Inflation Data at 1.00 pm should be interesting. I am still flat the Bund, as I continue to be a buyer on any dip lower to 168.80/169.30 with the same 168.35 stop. If I am taken long I will have a T/P level at 169.60.
Gold Rolling Contract
Gold just missed yesterday’s buy level and I am still flat. As I am now long Silver, I will now lower my Gold buy level to 1700/1715 with a 1689 stop. If I am taken long I will have a T/P level at 1725.
Silver Rolling Contract
Silver dropped sharply yesterday, trading the whole of my buy range for a now 21.75 average long position. Silver’s 10-Day DSI Indicator is at 12.7% (bulls) which is the lowest level since September 12, 2018. This indicates that trader sentiment is compatible with a sell-off that is in its latter stages. I will now lower my T/P level on this position to 22.05 while leaving my 20.95 stop unchanged.
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