U.S. Equity Markets finished the week on a strong note led by the Dow closing higher for the sixth consecutive trading session adding to my conviction that we put in a meaningful low on Friday May 21. The U.S. Bureau of Economic Analysis reported Personal Consumption Expenditures (“PCE”) grew by 6.3% year over year in April. While this was greater than Wall Street’s projected 6.2% rise, the figure was lower than the prior month’s gain of 6.6%. Excluding food and energy prices, its core reading jumped by 4.9% year over year (“YOY”), in line with forecasts and March’s 5.2% increase. On a month-over-month basis, the headline number rose by 0.2%, in line with estimates and lower than the previous month’s 0.9% gain. This confirms what we saw earlier in May when the U.S. Bureau of Labour Statistics reported its Consumer Price Index (“CPI”) data for April. The figure increased by 8.3% YOY compared with the prior month’s gain of 8.5%. It also supports U.S. Federal Reserve Chairman Jerome Powell’s recent comments that the central bank will consider a 0.50% rate increase in June and July, with Wall Street anticipating interest rates ending the year at around 2.5%. Within the S&P 500, all the 11 sectors finished higher. European Markets closed higher. European Central Bank President Christine Lagarde said it will begin the gradual process of normalising monetary policy, seeking to exit negative interest rates by September’s end. French President Emmanuel Macron urged Turkish President Recep Erdogan to support Finland and Sweden’s NATO applications, increasing isolation pressure on Russia. Russian President Vladimir Putin told Italian Prime Minister Mario Draghi that Moscow is ready to export grains and fertilizers if the West removes its economic sanctions. Yesterday, European Markets again closed higher despite German Inflation hitting a 60-year high. In Asia, Chinese technology shares gained after e-commerce giant Alibaba and search engine company Baidu reported better-than-expected quarterly sales. Taiwan and the U.S. are reportedly planning discussions to boost supply-chain stability and economic cooperation, potentially stoking tensions with China. Bank of Japan Governor Haruhiko Kuroda said the central bank will continue to target 2% inflation even as wage-price growth is needed for stable prices. Chinese Premier Li Keqiang warned government officials that the nation’s economic growth is at risk of falling below a “reasonable range” due to COVID-19 lockdowns. Elsewhere, Oil rose 1% on an anticipated summer surge in demand, while Bitcoin gained over 7% as Crypto finally joins the risk revival of the last week.
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For anyone following my Platinum Service it made 50 points yesterday and is now ahead by 3236 points for May having made 762 points in April, following a gain of 5883 points in March. The Platinum Service made an impressive 5324 points in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss, having made 2466 points in November, 1028 points in October, 2866 points in September, 1543 points in August, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, after ending March with an impressive gain of 3769 points. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Equities
The S&P 500 closed 2.47% higher at a price of 4158.
The Dow Jones Industrial Average closed 575 points higher for a 1.76% gain at a price of 33,212.
The NASDAQ 100 closed 3.3% higher at a price of 12,681.
The Stoxx Europe 600 Index closed 0.6% higher.
Yesterday, the MSCI Asia Pacific Index rose 1.1%.
Yesterday, the Nikkei closed 2.19% higher at a price of 27,369.
Currencies
The Bloomberg Dollar Spot Index closed 0.6% lower.
The Euro closed 0.6% higher at $1.0785.
The British Pound closed 0.3% higher at 1.2655.
The Japanese Yen fell 0.4%, closing at $127.54.
Bonds
Germany’s 10-year yield closed eight basis points higher at 1.06%.
Britain’s 10-year yield closed two basis points higher at 1.99%.
US 10 Year Treasury closed one basis points higher at 2.74%.
Commodities
West Texas Intermediate crude closed 1% higher at $114.25 a barrel.
Gold closed 0.17% higher at $1855.10 an ounce.
This morning on the Economic Front we have German Unemployment Rate at 8.55 am, followed by U.K. Money Supply and Mortgage Approvals at 9.30 am. Next, we have Euro-Zone CPI and U.K GDP at 10.00 am. Finally, we have the U.S. Housing Price Index at 3.00 pm.
Cash S&P 500
The Equity rally that I have been preaching about over the past two weeks gained momentum on Friday with the S&P now trading 120 Handles higher from where I marked prices early Friday morning. The S&P has now rallied over 390 Handles since the low of Friday 21 as the signals charts that I follow finally worked. Thankfully, we had no sell level in the S&P or any of the U.S. Equity Indexes and are still flat. The S&P is now short-term overbought. If you have any stale long positions from the May carnage it may be time to cover some of these previous off-side positions. The S&P has resistance from 4200/4230 where I will be a seller with a 4257 stop. We have short-term support from 4090/4120 where I will be a small buyer with a tight 4069 stop.
EUR/USD
No Change. I am still flat the Euro which continues to move higher as expected. I will now raise my buy level to 1.0640/1.0700 with a tight 1.0595 stop. I still do not want to be short the Euro at this time.
March Dollar Index
The Dollar just missed Friday’s 102.40 sell level before selling off to sit at 101.30 as I go to press. The Dollar has now fallen over 3% in the last week which is not an insignificant amount. The Dollar has strong resistance from 101.85/102.45 and I will lower my sell level to this range with a tight 102.81 stop.
Cash DAX
The DAX has now rallied over 1000 points in the last week, despite German Inflation hitting a 60-year high. The price action has been bullish for most of the past month despite the aggressive sell-off in the American Indexes. I will now raise my buy level to 14240/14340 with a 14175 stop. If I am taken long I will have a T/P level at 14400. I still do not want to be short the DAX at this time.
Cash FTSE
The FTSE again missed my buy level before having a small 80-point rally and I am still flat. The FSTE has resistance from 7650/7710 where I will be a seller with a 7755 stop
Dow Rolling Contract
Thankfully, we had no sell level in the Dow on Friday as the market build on last week’s gains, closing higher for the sixth consecutive trading session, for a gain of over 2800 points. Incredibly, the Dow is just over 3000 points below its all-time January high. Bears have got to be extremely frustrated with last week’s price action as the Fear & Greed Index has even improved to a reading of 21. The Dow has strong support from 32600/32900 and I will move my buy level higher to this range with a 32395 wider stop. One worry for the Bulls is the fact that the McClellan Oscillator closed on Friday with one of the highest readings in history at +351. The Dow has resistance from 33450/33700 where I will be a seller with no stop for now.
Cash NASDAQ 100
The NDX has certainly bounced back in style, trading a whopping 1400 points above the May low. I am still long from April at a price 14327. I will now lower my exit level on this position to 13090 as we have made plenty of points in May. Given the rally and the fact the MO closed near record highs on Friday, I will not add to my existing long position at this time. I have sell levels in both the Dow and S&P which if triggered will go against my existing long NASDAQ position.
June BUND
Thankfully, the Bund rallied to my 153.75 T/P level on Thursday’s 153.25 long position before selling off over 100 points yesterday following the German Inflation print and I am still flat. Bund Yields are now back above 1%. The Bund has support from 151.20/151.80 where I will again be a buyer with a 150.75 stop.
Gold Rolling Contract
No Change. I am still a buyer on any dip lower to 1820/1834 with the same 1808 stop.
Silver Rolling Contract
I am still flat Silver as the market has traded in a narrow range since my Daily Commentary on Friday. Today, I will continue to be a buyer on any dip lower to 20.90/21.50 with a lower 20.35 stop. If I am taken long I will have a T/P level at 21.90.
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