U.S. Equity Markets finished the month lower led by the 0.67% fall in the Dow in a trading session that witnessed plenty of two-way price action. Yesterday morning, Federal Reserve board member Christopher Waller voiced the Central Bank’s concerns about the nation’s two-job opening for every person looking for work. With more jobs open than filled, companies are raising wages for new and current employees. That is bolstering higher prices as businesses charge more for their services to maintain a profit. In response, the Fed believes it must raise its interest rates at a dynamic rate. That way, the Fed can maneuver the national labour supply-and-demand balance to a more stable setting and help fight inflation. Waller’s personal view is the Fed should keep increasing its interest rates by 0.5% per meeting. He would push for this to continue until inflation returns to the bank’s 2% goal. The Federal Reserve only has five more policy-setting meetings left in 2022, taking place in June, July, September, November, and December. Chairman Jerome Powell expects 0.5% rate hikes for both June and July. And Waller hinted that September could follow suit with the same. If that happens, then November and December could see rates raised by 0.25% at the very least. As the Fed continues to raise its rates, the market remains fearful of a potential recession. Within the S&P 500, 9 of the 11 sectors finished lower. European Markets closed lower. France’s preliminary consumer price index (“CPI”) growth for May was in line with expectations but rose to a new high. This was driven by higher food and energy costs. European Union leaders agreed to ban the import of Russian oil and petroleum products delivered by sea until a solution can be found to replace pipeline supplies. German Finance Minister Christian Lindner said expansive fiscal policies will end next year and the government will focus on fighting inflation. European Central Bank Chief Economist Philip Lane said raising interest rates by 0.25% at the July and September meetings should be considered the base case. In Asia, China’s official Purchasing Managers’ Index (“PMI”) data for May rebounded compared with April as services and manufacturing sector activity were stronger than anticipated. Japan’s preliminary industrial production figures for April contracted more than expected as China’s COVID-19 lockdowns weighed on supply chains. Bank of Japan Governor Haruhiko Kuroda said it will continue to support the economy with “persistent” easy-money policies. Shanghai’s government said it would remove “unreasonable” COVID restrictions beginning in June – in an attempt to support an economic rebound. Elsewhere, Oil closed flat, while fell 0.79% as the U.S. Dollar remained strong and U.S. 10-year Treasury yields continue to rise.
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For anyone following my Platinum Service it made 415 points yesterday to finish May with a gain of 3651 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 0.63% lower at a price of 4132.
The Dow Jones Industrial Average closed 222 points lower for a 0.67% loss at a price of 32,990.
The NASDAQ 100 closed 0.31% lower at a price of 12,642.
The Stoxx Europe 600 Index closed 0.8% lower.
Yesterday, the MSCI Asia Pacific Index rose 0.2%.
Yesterday, the Nikkei closed 0.33% lower at a price of 27,279.
Currencies
The Bloomberg Dollar Spot Index closed 0.5% higher.
The Euro closed 0.5% lower at $1.0735.
The British Pound closed 0.4% lower at 1.2604.
The Japanese Yen fell 1.1% closing at $128.75.
Bonds
Germany’s 10-year yield closed six basis points higher at 1.12%.
Britain’s 10-year yield closed 11 basis points higher at 2.10%.
US 10 Year Treasury closed 11 basis points higher at 2.85%.
Commodities
West Texas Intermediate crude closed flat at $114.25 a barrel.
Gold closed 0.79% lower at $1837.10 an ounce.
This morning on the Economic Front we have German Retail Sales and U.K. Current Account at 7.00 am. Next, we have German, Euro-Zone and U.K Global Manufacturing PMI at 8.55 am, 9.00 am and 9.30 am respectively, followed by Euro-Zone Unemployment Rate at 10.00 am and a speech from ECB President Lagarde at 12.00 pm. At 1.15 pm we have U.S. the ADP Employment Report and Global Manufacturing PMI at 1.15 pm. This is followed by JOLTS Job Openings, Construction Spending and ISM Manufacturing at 3.00 pm. Fed Members Williams and Bullard are speaking at 4.30 pm and 6.00 pm respectively. Finally, at 7.00 pm we have the Beige Book.
Cash S&P 500
My S&P plan worked well as the market declined as expected following the McClellan Oscillator print closing at +351 last Friday. The MO closed last night at +260 which is still an extremely high reading. This move lower saw the S&P test the key 4090/4120 support area as outlined in yesterday’s Daily Commentary. I bought the S&P at 4115 before we rallied to my 4135 T/P level with a 4168 rebound high and I am still flat. Today, I will again be a buyer on any further dip lower to 4080/4110 with a 4059 stop. My only interest in selling the S&P is still on a further rally to 4195/4225 with a tight 4241 stop.
EUR/USD
My Euro plan worked well with the market trading lower to my 1.0695 buy level before rallying to my 1.0740 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 1.0620/1.0680 with a lower 1.0575 stop. I still do not want to be short the Euro at this time.
March Dollar Index
The Dollar rallied to my 101.90 sell level. I am still short with a now higher 101.60 T/P level. I will add to this position at 102.50 while leaving my 102.81 tight stop unchanged. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Cash DAX
The DAX sold off yesterday, missing my 14340 buy level by 18 points before having a small rally into the close. I am still flat and I will now lower my buy level to 14190/14290 with a wider 14095 stop. Despite yesterday’s sell-off I still do not want to be short the DAX at this time.
Cash FTSE
No Change. I am still a seller on any further rally to 7665/7715 with a now higher 7781 higher stop.
Dow Rolling Contract
My Dow plan also worked well yesterday with the market trading lower to my 32850 buy level before rallying over 400 points, enabling me to cover this position at my 33020 revised T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 32500/32800 with a 32345 stop. 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 22 which is just below the reading of ‘’Fear’’. The Dow has resistance from 33450/33700 where I will continue to be a seller with no stop for now.
Cash NASDAQ 100
The NDX was the strongest of the American Indexes yesterday which was a surprise given the 11 Basis Points rise in Treasury Yields. Maybe the worst of the bad news is now priced into Technology Stocks? I am still long and wrong from April at a price of 14327. I will leave my 13090 exit level unchanged on this position for now. 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
The Bund got hit hard yesterday, trading to new Contract lows. This move lower saw my 151.60 buy level triggered. I will add to this position at 150.80 with a now lower 150.35 stop. I will lower my T/P level to 152.05 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold got hit hard yesterday and I am still flat. As I am now long Silver, I emailed my Platinum Members to lower their Gold buy level to 1805/1820 with a lower 1789 stop. If I am taken long I will have a T/P level at 1832.
Silver Rolling Contract
Silver is now trading at multi-year lows with the market well off its May 2011 high of $51. Yesterday’s move lower saw my 21.50 buy level triggered. I will add to this position at 20.90 while leaving my 20.35 ‘’Closing Stop’’ unchanged. I will look to cover this position at my 21.90 T/P level and if any of the above levels are hit I will be back with a new update for my Platinum Members
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