Following another volatile trading session U.S. Equity Markets reversed earlier losses to close higher led by the 2.5% gain in the NASDAQ 100. This move higher saw the VIX close lower by over 9% at a price of 29.62. The U.S. Federal Reserve approved its biggest interest-rate hike since 1994 and suggested it would continue to take aggressive action to slow the economy and combat inflation. During their two-day policy meeting, central bank officials agreed to raise rates by 0.75%, bringing the total benchmark Federal-Funds rate to around 1.5% to 1.75%. This increase was greater than what many had anticipated, as several rate-setting Federal Open Market Committee members noted rates would rise by 0.50%. Still, Fed Chairman Jerome Powell said he does not anticipate hikes of this magnitude to be “common.” However, he added that the July meeting could see an increase between 0.50% and 0.75%. This could suggest that while the central bank had previously taken a more gradual approach, the economic situation and rising inflation may be becoming a greater concern, as much of the released data shows prices are not cooling despite the Fed’s actions. Within the S&P 500, 10 of the 11 sectors finished higher. European Markets closed higher. European Central Bank Executive Board member Isabel Schnabel said the bank will continue to work toward policy normalisation while tackling any potential disorderly bond market moves. French final Consumer Price Index growth for May was in line with the preliminary reading, as rising energy prices continued to head higher. Euro-Zone Industrial Production growth for April was in line with expectations, rebounding compared with March, as German output expanded once more. The ECB called an Emergency Meeting yesterday morning which concluded three hours later with news that was short on detail. However, Bond Yields across the Euro-Zone fell as the ECB hopes this will be the start of a trend. The Governing Council announced that it will reinvest redemptions under the Euro 1.7 trillion Pandemic Purchase Programme in a flexible way. Whether this is enough to stem the Bond rout only time will tell. In Asia, Chinese Retail Sales numbers for May contracted less than expected, as spending in restaurants and on consumer goods recovered. Japanese Core Machinery Orders for May were stronger than anticipated, hitting their highest level since 2006, as companies were increasingly optimistic about an economic rebound. The People’s Bank of China left its one-year medium-term lending facility unchanged to stem any Yuan fallout from the Federal Reserve’s pending rate hike. Japanese Chief Cabinet Secretary Hirokazu Matsuno said the government will step in to take necessary action against persistent yen weakness if necessary. Elsewhere, Oil fell 2.44% on reports that China and India are importing large amounts of Russian crude, while Gold gained 1.2% on Dollar weakness.
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 965 points yesterday and is now ahead by 2594 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 1.46% higher at a price of 3789.
The Dow Jones Industrial Average closed 303 points higher for a 1% gain at a price of 30,668.
The NASDAQ 100 closed 2.49% higher at a price of 11,593.
The Stoxx Europe 600 Index closed 1.4% higher.
This morning, the MSCI Asia Pacific Index rose 0.4%.
This morning, the Nikkei closed 0.56% higher at a price of 26,474
Currencies
The Bloomberg Dollar Spot Index closed 0.3% lower.
The Euro closed 0.2% higher at $1.0439.
The British Pound closed 1.3% higher at 1.2139.
The Japanese Yen rose 0.4% closing at $134.27.
Bonds
Germany’s 10-year yield closed 13 basis points lower at 1.64%.
Britain’s 10-year yield closed 14 basis points lower at 2.47%.
US 10 Year Treasury closed 19 basis points lower at 3.31%.
Commodities
West Texas Intermediate crude closed 2.44% lower at $115.61 a barrel.
Gold closed 1.2% higher at $1831.10 an ounce.
This morning on the Economic Front we have speeches from ECB Members Panetta and De Guindos at 8.20 am and 9.30 am respectively. This is followed at 12.00 pm by the Bank of England Rate Announcement and the Minutes from the last Meeting. At 1.30 pm we have U.S. Weekly Jobless Claims, Housing Starts and the Philly Fed Manufacturing Index. Finally, we have the EIA Natural Gas Storage Change at 3.30 pm.
Cash S&P 500
After a difficult week, my S&P plan worked well yesterday. Shortly after I posted the S&P rose to my 3789 revised T/P level on my 3785 average long position. This exit gave me room to rebuy the S&P which I did in an email to my Platinum Members and this was filled at a price of 3728 post the FOMC Statement. Subsequently, the S&P rose over 100 Handles, enabling me to cover this position at my 3768 T/P level. U.S. 2 Year Yields had risen 60 basis points since the CPI was released last Friday, prompting the Fed to raise rates by a whopping 75 basis points which is the largest increase in 28 years. This came on a day that that the Atlanta Fed downgraded GDP growth to zero. Powell in his press conference said the consumer was financially sound which makes no sense but yet again the reporters did not ask any hard questions. This morning the S&P is selling off having, hit an overnight high at 3829 before sitting at 3755 as I go to press. The next key event is tomorrow’s Quadruple Expiration when the June Futures and Options expire. This is one of the biggest expirations ever with over $3.2 Trillion rolling off. Anything can happen ahead of the event either we make new lows or rip higher. Either way once we get tomorrow out of the way I expect a rally into month and Quarter End especially if Bond Yields can continue last night’s post FOMC rally. The McClellan Oscillator improved, closing at -135 last night while the ’’Fear & Greed’’ Index rose, closing at 21 which is still a reading of ‘’Extreme Fear’’. Today, I will again be a buyer of the S&P on any dip lower to 3690/3720 with a 3669 ‘’Closing Stop’’. I am still long from last Friday at 3985 and given the points made this week, I will now lower my exit level on this position to 3965.
EUR/USD
My Euro plan worked well with the market trading lower to my 1.0385 buy level before rallying to my 1.0435 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 1.0320/1.0370 with a 1.0265 stop. Despite the bearish sentiment towards the Euro I still do not want to be short the market at this time.
March Dollar Index
The Dollar traded lower to my 104.60 T/P level on my 104.75 average short position and I am now flat. The Dollar has resistance from 105.20/105.70 where I will again be a seller with a 106.15 stop.
Cash DAX
I am still flat the DAX as the market never came close to yesterday’s buy range. I am not going to chase the market higher, leaving my 13100/13200 buy level unchanged with the same 12995 wider stop. If I am taken long I will have a T/P level at 13280. I still do not want to be short the DAX at this time
Cash FTSE
I am still flat. I will now raise my buy level to 7100/7170 with a higher 7045 stop.
Dow Rolling Contract
The volatility in the Dow is not for the faint hearted with plenty of two- way price action. It took a while but finally the Dow traded lower to my 30200 buy level post the FOMC release before rallying to my 30510 T/P level and I am now flat. The Dow hit an overnight high at 30940 before selling off 500 points as I go to press. The Dow has support from 29850/30150 where I will again be a buyer with a 29645 ‘’Closing Stop’’. The Dow is severely oversold after falling over 3000 points since Thursday and once we get the Expiration out of the way tomorrow, I am expecting a rally into month end the seasonally strong July 4th Independence Holiday period.
Cash NASDAQ 100
The NDX outperformed the other main U.S. Indexes which is no surprise given the 19 basis points fall in Treasury Yields. I will now raise my buy level to 11150/11300 with a higher 10995 stop. If I am taken long I will have a T/P level at 11510. Meanwhile I will leave my 14327 long position unchanged with the same 13400 exit level
September BUND
The ECB did not manage to come out with anything ‘’Magic’’ yesterday but the announcement of the Emergency Meeting did see Bunds rise 300 points, reversing Tuesday’s meltdown. However, the Bund is still nervous and severely oversold selling off 80 points this morning, to sit at 144.50. We have support from 142.80/143.60 where I will be a small buyer with a 142.25 stop. If I am taken long I will have a T/P level at 144.30.
Gold Rolling Contract
Gold rallied to my 1835 T/P level and I am now flat. Gold has support from 1800/1812 where I will again be a buyer with a 1789 ‘’Closing Stop’’.
Silver Rolling Contract
Silver rallied to my 21.40 T/P level and I am now flat. Silver has strong support from 20.60/21.20 where I will be an aggressive buyer with the same 19.95 stop.
Recent Comments