Despite Bank stocks falling and credit default swaps rising on concerns that continued interest-rate hikes could further reduce liquidity and put more stress on financial institutions’ balance sheets, U.S. Equity Markets closed Friday’s volatile trading session higher. The S&P led the gains, closing higher by 0.56% while VIX fell 4%, closing at a price of 21.74. Federal Reserve Bank of St. Louis President James Bullard raised his forecast for peak interest rates this year and asserted that the ongoing banking crisis is overblown. Composite PMI rose to 53.3 in March, beating expectations of 49.4 and marking the second straight month of expansion in both manufacturing and services. Within the S&P 500 Index, nine of 11 sectors finished higher. European Markets closed lower. European Union regulators may be reconsidering how financial institutions should manage liquidity risk after recent policy tightening caused banking stress. Bank of England Governor Andrew Bailey warned that if firms continue to raise prices, further rate hikes by the central bank would be inevitable. Spanish PPI annual growth for February eased to its lowest rate in nearly two years thanks to falling energy costs. Euro-Zone Composite PMI for March showed business activity unexpectedly accelerating as consumer demand for services outpaced the decrease in demand for goods. In Asia, Korean Finance Minister Choo Kyung-ho said the government seeks to improve relations and trade with Japan to support economic growth. Japanese CPI eased in February, taking pressure off the central bank to raise interest rates. Chinese Foreign Minister Wang Yi called on Europe to support Beijing’s peace proposal in Ukraine, a measure most Western governments have rejected. China’s Banking and Insurance Regulatory Commission said it would meet with insurers to discuss debt-asset risk related to global liquidity problems. Elsewhere, Oil fell 1% while Gold closed 0.71% lower as the $2000 level again proved to be strong resistance.
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For anyone following my Platinum Service it made 335 points on Friday and is now ahead by 5866 points for March after finishing February with a gain of 3164 points, after closing January with a gain of 4687 points, while finishing December with a gain of 2054 points. November ended with a gain of 4789 points, while finishing October with a record gain of 9619 points, making 6660 points in September, after closing August with a gain of 2228 points, having made 2660 points in July, following a gain of 3371 points in June. The Service made 3651 points in May, after making 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 0.56% higher at a price of 3970
The Dow Jones Industrial Average closed 132 points higher for a 0.41% gain at a price of 32,237.
The NASDAQ 100 closed 0.30% higher at a price of 12,767.
The Stoxx Europe 600 Index closed 1.37% lower.
Last Friday, the MSCI Asia Pacific fell 0.64%.
Last Friday, the Nikkei closed 0.13% lower at a price of 27,385.
Currencies
The Bloomberg Dollar Spot Index closed 0.5% higher.
The Euro closed 0.6% lower at $1.0760.
The British Pound closed 0.4% lower at 1.2229.
The Japanese Yen fell 0.1% closing at $130.92.
Bonds
Germany’s 10-year yield closed 4 basis points lower at 2.15%.
Britain’s 10-year yield closed 8 basis points lower at 3.28%.
U.S.10 Year Treasury closed 7 basis points lower at 3.37%.
Commodities
West Texas Intermediate crude closed 0.99% lower at $68.99 a barrel.
Gold closed 0.81% lower at $1978.10 an ounce.
This morning on the Economic Front we have German IFO Business Survey at 7.00 am. This is followed by Euro-Zone Money Supply at 9.00 am. Finally, at 3.30 pm we have the Dallas Fed Manufacturing Business Index at 3.30 pm.
Cash S&P 500
Another wild trading session for the S&P. Having sold off aggressively all-morning, the S&P staged the usual miraculous recovery as the Cash Markets opened. New that Treasury Secretary Yellen was suddenly convening a ‘’Private’’ financial stability council meeting was a dead giveaway to that all was well in the banking sector. Despite the global parade of sweet talk including the German Chancellor saying Deutsche Bank was fine and nothing to be concerned about, the action in DB shares told a different story falling 14% as their default swaps surged. Central Banks are adding liquidity like mad across the system. History tells us than when reserves increases the S&P rallies. It really is that simple despite the ramifications that it will cause down the line. Bears are getting killed in this market as no matter what they do to drive markets lower it attracts aggressive buying. With one or two exceptions the trend since October is to be an aggressive buyer on dips. With the 14-Day RSI for the Bank Index below 30, it is only a matter of time in my opinion before this sector stabilises and drives the market higher especially the Dow. There are lots of ideas as to how the Bank Stocks rally. Then one I like most is from Larry Summers about guaranteeing failed bank deposits for the next 12 months. Any such announcement from Yellen would cause a massive rally especially in the context of these massive oversold conditions. On Friday, my S&P plan worked well with the market hitting my 3920 buy level before rallying to my 3935 T/P level and I am now flat. The S&P has support from at 3932 which is its 200 Day Moving Average. I will be an aggressive buyer from 3935/3955 with a 3919 ‘’Closing Stop’’. The S&P has resistance at its 50 Day Moving Average (4014). I will be a small seller from 4015/4030 with a tight 4041 ‘’Closing Stop’’.
EUR/USD
Rumours that Deutsche Bank was the latest European Bank to be in trouble saw the Euro fall 80 points on Friday. This move lower saw my 1.0750 buy level triggered. I am still long with a now lower 1.0805 T/P level. I will add to this position at 1.0680 while leaving my 1.0625 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
June Dollar Index
The 0.50% rally in the Dollar saw my 103.30 sell level triggered. I am still short with a now higher 102.80 T/P level. I will add to this position at 104.00. I will now raise my ‘’Closing Stop’’ to 104.75. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
The DAX got slammed on Friday, trading the whole of my buy range for a 14890 average long position. The low was 14805 before aggressive buying drove the DAX 350 points higher in the New York close. Unfortunately, given the number of open positions on board I chickened out of this position at 14920 and I am still flat. Given how oversold Global Bank stocks are any relief rally in this sector will drive equity markets substantially higher. The amount of liquidity that Central Banks are injecting makes it impossible to have a short position. Today, I will again be a buyer from 14820/14920 with a 14745 ‘’Closing Stop’’.
Cash FTSE
The FTSE sold off to my second buy level at 7350 for a 7385 average long position. The FTSE had a nice rally into the New York close enabling me to cover this long position at 7420 and I am now flat. Given how oversold the FTSE is trading, I will continue to be a buyer on dips. Today, we have support from 7290/7360 where I will again be a buyer with a 7215 ‘’Closing Stop’’.
Dow Rolling Contract
My Dow plan worked well as the market fell to my 31800-buy level before having a nice 450-point rally into the close. Given the number of ‘’Open Positions’’ I covered this long position at my revised 31920 T/P level and I am now flat. The Dow has support from 31800/32050 where I will again be a buyer with a 31645 ‘’Closing Stop’’. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
I am still flat as the NDX never came close to Friday’s buy level. With the 14-Day RSI closing at 62 on Friday, I am looking for the Dow to outperform the tech stocks once the Financial sector starts to stabilise. The NDX has support from 12520/12670. I will move my buy level to this area with a higher 12395 ‘’Closing Stop’’.
June BUND
The Bund continued its recent rally, and I am still flat. I am not going to chase the Bund higher leaving my 136.10/136.80 unchanged with the same 135.45 ‘’Closing Stop’’.
Gold Rolling Contract
I am still flat Gold as the market again found strong resistance at $2000. Gold has support from 1940/1955 where I will be a buyer with a 1929 ‘’Closing Stop’’. We have resistance from 2015/2030 where I will again be a small seller with a 2041 ‘’Closing Stop’’.
Silver Rolling Contract
I am still long Silver from last month at a price of 23.10. Silver rallied again yesterday, sitting at 23.20 as I go to press. I will leave my 21.45 ‘’Closing Stop’’ unchanged. I will now have a T/P level at 23.60 on this position. If any of the above changes I will be back with a new update for my Platinum Members.
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