U.S. Equity Markets suffered their worst day since the COVID Crisis in March 2020 as the S&P wiped out all of its 27% gains in 2021 with a loss yesterday of almost 4%. The VIX closed 22% higher at a price of 34.02 on what turned out to be most of the most brutal trading sessions in many years for risk assets. The preliminary estimate of the Consumer Sentiment Index published Friday by the University of Michigan showed U.S. consumer sentiment hit an all-time low in June. This was driven by a continued rise in inflation and gas prices, which put increased pressure on consumers, Indexes such as the S&P 500, and the U.S. economy. The development also adds to already-rising concerns, as the data – combined with the latest Consumer Price Index readings from the Bureau of Labour Statistics – indicated inflation is not slowing down as money managers had hoped. No asset class was spared with 10-Year Treasuries – normally a safe haven when Equity Markets dump – closed 21 basis points higher at a yield of 3.37%. Meanwhile, Bitcoin slumped over 12% on reports that Celsius would shutter trading activity on its crypto platform. Bitcoin is now down 53% for the year and 69% since its high last November, trading below $22,000. Within the S&P 500, all 11 sectors finished lower. European Markets closed lower. The Bank of England will release its monetary policy statement on Thursday, with investors anticipating a 0.25% interest-rate hike and an outlook for additional increases. The Leibniz Centre for European Economic Research’s Euro-Zone and German economic growth survey is expected to show increasingly less pessimistic sentiment on Tuesday. European Central Bank Governing Council member Joachim Nagel said it’s “far, far away” from normalising policy, implying interest rates must go much higher. In Asia, The Bank of Korea will release its May policy meeting minutes on Tuesday, with the text anticipated to support its recent guidance for additional inflation-fighting rate hikes. The People’s Bank of China’s new Yuan loan growth for May was much stronger than expected, signalling banks are adhering to Beijing’s prodding for economic support. The Bank of Japan will unveil its monetary policy update on Friday, with investors predicting it will continue its easy-money policies. The Chinese cities of Shanghai and Beijing reintroduced mass COVID-19 testing mandates, stoking fears of new rolling lockdowns of manufacturing facilities. Elsewhere, Oil rose 0.8% after a volatile trading session while Gold fell 3% on Dollar strength.
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 45 points yesterday and is now ahead by 1128 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 3.87% lower at a price of 3749.
The Dow Jones Industrial Average closed 876 points lower for a 2.79% loss at a price of 30,516.
The NASDAQ 100 closed 4.6% lower at a price of 11,288.
The Stoxx Europe 600 Index closed 2.4% lower.
This morning, the MSCI Asia Pacific Index fell 0.9%.
This morning, the Nikkei closed 1.68% lower at a price of 26,534
Currencies
The Bloomberg Dollar Spot Index closed 0.7% higher.
The Euro closed 0.9% lower at $1.0430.
The British Pound closed 1.1% lower at 1.2174.
The Japanese Yen fell 0.1% closing at $134.50.
Bonds
Germany’s 10-year yield closed 12 basis points higher at 1.64%.
Britain’s 10-year yield closed 8 basis points higher at 2.53%.
US 10 Year Treasury closed 21 basis points higher at 3.37%.
Commodities
West Texas Intermediate crude closed 0.8% higher at $120.93 a barrel.
Gold closed 2.98% lower at $1818.10 an ounce.
This morning on the Economic Front we already had the release of German Wholesale Price Index which rose 1% versus + 2.1% expected while Final CPI came in as expected at + 7.9%. At 10.00 am we have German and Euro-Zone ZEW Survey, followed by the U.S. NFIB Business Optimism Index at 11.00 am. Next, we have the all-important PPI at 1.30 pm. Finally, we have a speech from ECB Member Schnabel at 6.00 pm.
Cash S&P 500
Not since the 1980s have we witnessed a trading session like yesterday where everything that had a ticker symbol got crushed with the exception of Crude which ended Monday with a small gain. The loss of Capital across all Global Classes is a record levels in Dollar terms as even Bonds and Gold got crushed as Fund Managers and Investors had to sell to meet margin calls. We have seen a massive capitulation in internals with ‘’Open Gaps’’ all over the map, including vast oversold readings to the extent that I have never witnessed before with panic everywhere. There is no doubt the Fed are trapped and worried and is one of the reasons why they tried to leak a 75-Basis Points rate hike tomorrow in the Wall Street Journal. As I said yesterday quoting John Templeton saying ‘’Bull Markets Are Born On Pessimism’’. Well, we could not have had a more pessimistic trading session with Consumer Confidence now at an all-time low per last Friday’s release. I emailed my Platinum Members after the close last night to say that I am seeing a number of positive divergences despite the carnage and that I have my largest Equity position since March 2020, although I did lighten up my Dow position this morning. In my opinion everything is setting up for a massive buy especially after we get today’s margin selling out of the way when Cash Markets open this afternoon. The larger pattern that I follow for the S&P on the Weekly chart is showing positive divergence for only the second time in 14 years. The market is desperate for any sign of a relief rally making tomorrow’s FOMC Statement and Powell press conference even more important. First, we have PPI at 1.30 pm. While I was wrong expecting CPI to decline we may see PPI fall as every commodity that I follow (with the exception of Shelter and Crude) lower than last year’s prices. Some of these commodities like Lumber and Steel have been crushed. I bought the S&P at an average rate of 3790 yesterday. I am still long with a 3725 ‘’Closing Stop’’ and a now lower T/P level at 3820. I am still long from last Friday at an average rate of 3985 and I will have no stop on this position especially as the McClellan Oscillator closed last night with a print of -255. If any of my above levels are hit I will be back with a new update for my Platinum Members.
EUR/USD
The Equity sell-off saw the Dollar soar. The Euro traded the whole of yesterday’s buy range for a now 1.0455 average long position. I will leave my 1.0375 stop unchanged while lowering my T/P level to 1.0505.
March Dollar Index
No Change. I am still short the Dollar from yesterday morning at 104.40. I will add to this position on any further move higher to 105.10 with a now higher 105.45 stop. Meanwhile, I will leave my 103.80 T/P level unchanged.
Cash DAX
I am still flat the DAX as the market surprisingly never came close to my buy range. I will now raise my buy level slightly to 13310/13410 with a higher 13195 wider stop.
Cash FTSE
The FTSE traded lower to my 7180 buy level before rallying last night to my 7245 T/P level and I am still flat. Today, I will again be a buyer on any dip lower to 7130/7200 with a tight 7075 stop.
Dow Rolling Contract
A nervous day as the Dow traded the whole of my buy range for a 30700 average long position before closing near the low of the day at a price of 30515. Thankfully, we have rallied overnight allowing me to cut this position at my revised 30860 T/P level and I am still flat. The Dow is severely oversold. We have support from 30300/30600 where I will again be a buyer with a 30145 ‘’Closing Stop’’ If I am taken long I will have a T/P level at 30870.
Cash NASDAQ 100
The devastation in tech stocks is now similar to the 2001 crash when the NDX fell an incredible 78% before three years later rallying to new all-time highs. The NDX is now down nearly 33% this year with Fund Managers now sitting on massive losses. Although the headline Index is down 33%, in reality most NASDAQ stocks are down between 50 and 70%, making this market the most oversold of the three Indexes that I cover. I am seeing some positive divergences but we need Bond Yields to fall for this market to have a sustained rally. The NDX has support from 11200/11350 where I will be a buyer with a wider 10995 stop. If I am taken long I will have a T/P level at 11600. Meanwhile I will leave my 14327 long position unchanged with the same 13400 exit level
September BUND
The Central Banks are now sitting on massive losses with Italian Bonds touching 4% yesterday. Given the level of debt these CBs cannot afford these high rates to fund their deficits and again calls into question the incompetence of the ECB who still have negative rates with Inflation running at 8%. I am as bad as these ECB officials trying to buy the Bund into a falling knife as I was again stopped out of my 147.20 latest long position at 145.40 and I am now flat. I am going to stay flat today as I have clearly lost my edge in this market.
Gold Rolling Contract
Gold fell 3% yesterday, trading the whole of my buy range for a now 1832 average long position. I will leave my 1809 ‘’Closing Stop’’ unchanged while lowering my T/P level to 1841.
Silver Rolling Contract
Silver sold off to my 21.10 buy level. I am still long with a now lower 21.50 T/P level. I will add to this position at 20.50 while leaving my 19.95 stop unchanged.
Recent Comments