U.S. Equity Markets reversed afternoon losses to end the day higher, led by the 0.95% gain in the S&P. This positive environment saw the VIX closed lower by 4% at a price of 24.02. In a Senate testimony, U.S. Treasury Secretary Janet Yellen said she anticipates inflation to remain elevated moving forward. Yellen emphasised that while President Joe Biden’s administration updated its inflation projection to an average of 4.7% in 2022, the number would likely be even higher – adding to present market uncertainty. Still, the U.S.’s reported decrease in the Trade Deficit – as well as China’s ongoing economic reopening – helped lift parts of the market throughout the day. Over the longer term, however, consumers will likely remain concerned about rising gas and food prices, which could further alter consumer-spending habits following this week’s U.S. Consumer Price Index data. Within the S&P 500, 10 of the 11 sectors finished higher. European Markets closed mixed. The European Central Bank could be forced to hike interest rates to 1.50% by the middle of next year from the current -0.50% amid rising inflation. The Italian National Institute of Statistics lowered its 2022 economic growth forecast from 4.7% to 2.8%. German Factory Orders contracted in April due to worsening automobile, chemical, and electronics demand. Sentix’s Euro-Zone Investor Confidence data for June was better than expected, as survey respondents were less pessimistic about the current situation and outlook. In Asia, The Reserve Bank of Australia raised interest rates by 0.50%, double analysts’ forecasts, while saying it anticipates additional hikes to fight inflation. Japan’s household spending increased for the second straight month in April, hitting the highest level since last spring due to the end of COVID-19 restrictions. Chinese authorities are letting technology companies Full Truck Alliance and Kanzhun sign up new users – a year after Beijing launched an investigation – boosting the regulatory outlook. Bank of Japan Governor Haruhiko Kuroda said the central bank will discuss ending easy-money policies when its stable-inflation goal is reached. Elsewhere, Oil rose 1.24% on European Union sanctions against Russia, while Gold closed 0.7% higher on Dollar weakness.
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For anyone following my Platinum Service it made 90 points yesterday and is now ahead by 1130 points for June after making 3651 points in 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. 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 0.95% higher at a price of 4160.
The Dow Jones Industrial Average closed 264 points higher for a 0.80% gain at a price of 33,180.
The NASDAQ 100 closed 0.89% higher at a price of 12,711.
The Stoxx Europe 600 Index closed 0.2% higher.
This morning, the MSCI Asia Pacific Index fell 0.1%.
This morning, the Nikkei closed 0.97% higher at a price of 28,214
Currencies
The Bloomberg Dollar Spot Index closed 0.1% higher.
The Euro closed 0.1% higher at $1.0709.
The British Pound closed 1.1% higher at 1.2570.
The Japanese Yen fell 0.1% closing at $133.08.
Bonds
Germany’s 10-year yield closed two basis points lower at 1.30%.
Britain’s 10-year yield closed four basis points lower at 2.21%.
US 10 Year Treasury closed 1 basis points lower at 3.00%.
Commodities
West Texas Intermediate crude closed 1.24% higher at $117.48 a barrel.
Gold closed 0.7% higher at $1853.10 an ounce.
This morning on the Economic Front we already had the release of German Industrial Production which rose 0.7% versus +1% expected. At 9.30 am we have U.K. Global Construction PMI, followed by Euro-Zone GDP and Employment Change at 10.00 am. Finally, we have U.S. Wholesale Inventories at 3.00 pm and a 1O-Year Treasury Auction at 6.00 pm.
Cash S&P 500
I have mentioned a few times over the past number of weeks that a market that cannot sell-off on bad news has to respected. Yesterday, Retailer Target issued another profit warming -two weeks after their share price crashed the most since 1987 and is now down 40% for the year. No matter, as all three American Indexes shrugged off this gloomy news to shoot higher on the day. I was extremely unlucky yesterday as the S&P missed my initial 4075 buy level with a 4077 low print before rallying to close at 4160 and I am still flat. Hopefully you bought in front of my buy range given the fact that we have again rallied off the key 4070/4110 support area. As I mentioned yesterday, the S&P needs to break and close over the short-term resistance at 4165/4170 which was tested and failed three times last week. Ahead of Friday’s key CPI Report I would not be surprised to see the S&P break back above 4200. The S&P has resistance from 4230/4250 where we have the 50 Day Moving Average and the Monthly 5 EMA. I will now move my sell level higher to this area with a tight 4268 stop. The S&P has support from 4090/4120 where I will be a buyer with a 4069 stop which is just below yesterday’s low print.
EUR/USD
No Change. I am still long at 1.0685 with the same 1.0720 T/P level. I will add to this position at 1.0635 while leaving my 1.0575 stop unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
March Dollar Index
No Change. I am still short at 102.50 with a now higher 102.30 T/P level and 103.15 tight stop.
Cash DAX
No Change. No matter what news is reported the DAX continues to outperform the American Indexes. The price action is telling you not to be short the DAX and I am still flat. I will now raise my buy level 14400/14480 with a higher 14325 stop.
Cash FTSE
The FTSE rallied to my 7630 initial sell level. Given the weakness of Sterling I have decided to exit this short position here at 7600 and I am now flat. The FTSE has stronger resistance from 7670/7720 where I will again be a seller with a higher 7771 tight stop. I still do not want to be long the FTSE at this time given the worsening political mess in London.
Dow Rolling Contract
Frustratingly, the Dow also missed my buy level by 50 points before turning around and rallying over 500 points off its afternoon low. I will now raise my buy level to 32650/32900 with a higher 32495 ‘’Closing Stop’’. The Fear & Greed Index continues to improve closing at 33 last night which is a reading of ‘’Fear’’ and well above last Month’s low of 6. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
The NDX continues to build support above 12300. The NDX is extremely oversold with a near record number of shares still below their respective 200-Day Moving Averages. Despite an 8% rally off the May lows signal charts are still oversold as unlike both 2000 and 2008 we still have not had a proper Bear Market Rally in the NASDAQ. I will add to my existing long NDX position on any further move lower to 12400/12550 with a 12295 stop. If I am taken long at this level, I will have a T/P level at 12725. Meanwhile, I will continue to look to exit my existing 14327 long position at 13400 and if any of the above levels are hit I will be back with an update for my Platinum Members.
June BUND
No Change. I am still long the Bund at a price of 151.20 with the market trading slightly higher at 149.45 this morning. The Bund is severely oversold and these higher Bond Rates are hurting the ECB big-time. They have to try and engineer a rally in the Bund. They may get that chance at Thursday’s ECB Meeting. I will leave my T/P level unchanged at 151.65 with no stop for now. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold rallied small yesterday enabling me to cover my latest 1841 long position at my 1847 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 1818/1833 with an 1806 stop.
Silver Rolling Contract
I am still flat. Today, I will raise my buy level 21.30/21.90 with a higher 20.65 stop.
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