U.S. Equity Markets reversed all of Tuesday’s gains to close lower, led by the 1.08% fall in the S&P. Incredibly, the VIX also closed lower by 0.25% at a price of 23.96. According to data from the U.S. Federal Reserve, April’s total Consumer Credit balance rose 10% on an annualised basis to $38.1 billion compared with March’s $47.3 billion. The expansion of revolving credit, which includes credit-card debt, jumped 19.6% to $17.8 billion over the same period versus March’s $25.6 billion. This brings the total amount of revolving credit outstanding to $1.1 trillion dollars… which implies households are using credit debt to expand their paychecks amid rapidly rising inflation and the strain that it is putting on personal finances. But while this may help over the short term, the costs will eventually catch up. Unless inflation begins to ease, interest payments for credit cards are likely to trend even higher – increasing the risk of default among individuals and signalling the potential for a credit bubble. Within the S&P 500, 10 of the 11 sectors finished lower, making the move lower in the VIX a complete anomaly. European Markets closed lower. Russian Foreign Minister Sergey Lavrov is in Turkey to begin two days’ worth of negotiations to establish a corridor for the transport of Ukrainian grains. The World Bank lowered its global growth forecast for 2022 from 3.2% to 2.9%, saying a recession will be hard for many countries to avoid due to rising inflation. The Organisation for Economic Cooperation and Development lowered its 2022 global growth outlook from 4.5% to 3%, citing fallout from the conflict in Ukraine. German Industrial Production growth for April was weaker than anticipated as construction activity declined. In Asia, China’s government has raised $10 billion for a new stability fund to prop up financial institutions in the event of an economic collapse, with plans to raise $100 billion by September. Japan’s final First-Quarter Gross-Domestic-Product data was revised higher, contracting less than initially thought, signalling the economy may already be starting to recover. Chinese state-run media outlet Economic Daily said local governments should do more to boost private business investment and spur economic growth. Japanese Prime Minister Fumio Kishida’s Cabinet approved a preliminary plan to significantly bolster the island nation’s military defenses over the next five years. Elsewhere, Oil rose 2.64% on news of China’s gradual reopening, while Gold closed flat.
To mark my 2550th issue of TraderNoble Daiy 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 bryan@tradernoble.com for details
For anyone following my Platinum Service it made 21 points yesterday and is now ahead by 1151 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 1.08% lower at a price of 4115.
The Dow Jones Industrial Average closed 269 points lower for a 0.81% loss at a price of 32,910.
The NASDAQ 100 closed 0.76% lower at a price of 12,615.
The Stoxx Europe 600 Index closed 0.8% lower.
This morning, the MSCI Asia Pacific Index fell 0.3%.
This morning, the Nikkei closed 0.04% higher at a price of 28,246
Currencies
The Bloomberg Dollar Spot Index closed 0.1% higher.
The Euro closed 0.1% higher at $1.0720.
The British Pound closed 0.4% lower at 1.2516.
The Japanese Yen fell 1.1% closing at $134.30.
Bonds
Germany’s 10-year yield closed six basis points higher at 1.36%.
Britain’s 10-year yield closed four basis points higher at 2.25%.
US 10 Year Treasury closed three basis points higher at 3.03%.
Commodities
West Texas Intermediate crude closed 2.64% higher at $120.58 a barrel.
Gold closed 0.08% lower at $1851.10 an ounce.
This morning on the Economic Front we have no Economic data of note. At 12.45 pm we have the ECB Rate Decision followed by the Lagarde Pres Conference at 1.30 pm. At the same time, we have U.S. Weekly Jobless Claims. Finally, we have a 30 Year Bond Auction at 6.00 pm which will be closely watched after the rise in Yields over the past week.
Cash S&P 500
We are seeing brutal two-way price action as the S&P reversed Tuesday’s gains with a 1% loss yesterday as yet again the S&P found strong resistance at the 4160/4170 area before falling 50 Handles into the close. Overnight, we are seeing more weakness as the market waits for the ECB Rate Announcement this afternoon and of course the all-important CPI tomorrow. Although Bond Yields are back above 3% the Dollar is not finding a bid which is interesting. The S&P can go either way after the CPI print making it difficult to get an edge but the technical set-up is still showing charts that are severely oversold. I would love to see a test of the 50-Day Moving Average (4224) and the Monthly 5 EMA (4238) as a chance to put on a short-position. After the S&P hit my 4119 buy level, I emailed my Platinum Members to exit any long position at 4127 and I am still flat. Today I will again be a buyer on any dip lower to 4055/4085 with a 4039 stop. The S&P has resistance from 4225/4250 where I will be a strong seller with a tight 4268 stop.
EUR/USD
My latest long 1.0685 Euro position worked well with the market rallying to my 1.0720 T/P level and I am still flat. Today, I will again be a buyer on any dip lower to 1.0620/1.0670 with the same 1.0575 stop. I still do not want to be short the Euro at this time.
March Dollar Index
The Dollar /Yen hit an overnight high at 134.55 before finding some sellers. Although the Euro has a weighting of 57% of the Dollar Index making it the most correlated currency within the Dollar Index, the Japanese Yen has a weighting of nearly 14% and the 20% fall in the Yen this year has had a strong impact on the Dollar’s move higher in 2022. I was lucky yesterday as the Dollar sold off to my 102.30 T/P level on my 102.50 average short position before further weakness in the Yen has the Dollar trading higher at 102.60 this morning. The Dollar has resistance from 102.90/103.50 where I will again be a seller with a 104.05 stop.
Cash DAX
After the DAX sold off to my 14470 buy level I was lucky that I was at my screen allowing me to email my Platinum Members to exit any long position at my revised 14490 T/P level and I am now flat. With Bund Yields now trading at 1.36 – 50 Basis points above the last ECB Meeting, traders are nervous ahead of Lagarde’s press conference this afternoon especially as she has been completely wrong on the inflation front. Credit to Treasury Secretary Yellen for admitting how wrong she got the inflation move. Meanwhile, Inflation is running at 8% in the Euro-Zone with negative interest rates which is total madness. This morning, the DAX is trading lower at 14350. We have short-term support from 14180/14230 where I will be an aggressive buyer with a 14095 stop. If I am taken long I will have a T/P level at 14305.
Cash FTSE
The worsening political situation in Britain saw fall 50 points since I marked prices 24 hours ago and I am still flat. The FTSE has short-term support from 7450/7510 where I will be a small buyer with a 7395 stop. I will now lower my sell level to 7630/7680 with a lower 7735 tight stop.
Dow Rolling Contract
After hitting an afternoon high at 33150, the Dow fell 300 points, to my initial 32900 buy level before having a small rally to my revised 32950 T/P level and I am now flat. Despite the fall in the Dow yesterday, the Fear & Greed Index continues to improve closing at 36 last night which is still a reading of ‘’Fear’’ and well above last Month’s low of 6. The Dow has strong support from 32450/32750 where I will be an aggressive buyer with a 32295 stop. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
No Change. The low overnight for the NDX was 12562 before rallying as I go to post. 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.
September BUND
The June Contract actually expired on Tuesday which I only discovered yesterday afternoon when I was checking my trading Statement. I was stopped out of my 151.20 long June position at 149.40 and I am still flat. Higher Yields see the September Bund trading lower at 148.70 this morning. The Bund has support from 147.50/148.30 where I will again be a buyer with a 146.85 stop. If I am taken long I will have a T/P level at 149.05. I would expect plenty of two-way price action around the ECB Announcement and Lagarde Press Conference.
Gold Rolling Contract
No Change. I am still a buyer on any dip lower to 1818/1833 with the same 1806 stop.
Silver Rolling Contract
Silver traded lower to my 21.90 buy level before rallying to my 22.06 revised T/P level and I am still flat. Today, I will again be a buyer on any dip lower to I am still flat. Today, I will raise my buy level 21.00/21.60 with a lower 20.35 stop.
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