Despite the VIX closing lower by 4% on Friday, an aggressive sell programme saw equity markets hit hard in the last hour of trading. The Dow led the declines closing 0.55% lower after a 300-point fall from post NFP highs. This decline has continued overnight. Non-Farm Payrolls grew by 209K in June, 21K under expectations. However, Average Earnings rose 0.4% putting pressure on inflation. This is the first miss in 13 moths that NFP came in below estimates. Monetary policy expert and Stanford University Professor, John Taylor, believes that the Federal Reserve should raise interest rates further to combat high inflation. He suggested that the Fed should go a bit higher with rates, considering the significant adjustments made in recent years. Projections indicate that many policymakers expect rates to be raised by at least 50 basis points by the end of the year. Taylor, known for his monetary policy rule, criticised the Fed for not adhering to its principles during the pandemic, keeping rates low while inflation surged. On Thursday, global stock and bond markets experienced a sell-off as U.S. borrowing costs reached a 16-year high. This was triggered by strong job figures, which heightened expectations of further interest rate hikes by the Federal Reserve. Investors’ selling pressure led to increased yields, with the two-year U.S. Treasury reaching 5.12% and the benchmark 10-year at 4.08%. This development indicates a growing consensus that the Fed will resume its rate increase cycle after pausing in June. Lorie Logan, President of the Dallas Fed, called for an immediate resumption of rate hikes, emphasising the importance of restoring price stability. Twitter has reportedly threatened to sue Meta Platforms (META), the parent company of Facebook, over its new Threads platform. In a letter from Twitter’s lawyer to Meta CEO Mark Zuckerberg, Twitter accused Meta of hiring former Twitter employees who had access to confidential information and trade secrets. The letter alleges that Meta’s actions violate intellectual property rights. Meta recently launched Threads, a platform aimed at competing with Twitter by leveraging the user base of Instagram. European Markets closed slightly higher on Friday, following Thursday’s bloodbath. Ukrainian President Volodymyr Zelenskiy has urged NATO leaders to take concrete actions towards granting Ukraine membership in the alliance. Zelenskiy emphasised that Ukraine, currently engaged in a 17-month war against Russian forces, needed more than a general statement regarding NATO’s open-door policy. Ahead of the NATO summit in Vilnius on July 11-12, Ukraine is seeking a clear indication that it can join the alliance once the war concludes. However, NATO members have differing opinions on the speed of Ukraine’s accession, with some expressing concerns about escalating tensions with Russia. U.K. Finance Minister Jeremy Hunt is reportedly planning to repeal a European Union-era legislation that mandated the separation of investment research costs from trading expenditures. The move is part of a broader effort to strengthen the City of London’s position as a global financial hub. Last year, the U.K.’s finance ministry announced several financial measures, including a review of EU regulations known as MiFID II and a rule requiring brokers to itemise research charges and execution costs. The proposed repeal aims to streamline regulations and support the competitiveness of the financial sector in the U.K. In Asia, the Nikkei closed 0.58% lower as the recent sell-off continues to gather pace. Elsewhere, Oil rose 2.87% while a weaker Dollar saw Gold end Friday with a gain of 0.70%.
To mark my 2800th issue of TraderNoble Daily 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 153 points on Friday and is now ahead by 155 points for July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 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 0.29% lower at a price of 4399.
The Dow Jones Industrial Average closed 187 points lower for a 0.55% loss at a price of 33,734.
The NASDAQ 100 closed 0.35% lower at a price of 15,036.
The Stoxx Europe 600 Index closed 0.09% higher.
This morning, the MSCI Asia Pacific closed 0.7% lower.
This morning, the Nikkei closed 0.58% lower at a price of 32,202.
Currencies
The Bloomberg Dollar Spot Index closed 0.70% lower.
The Euro closed 0.8% higher at $1.0968.
The British Pound closed 0.6% higher at 1.2832.
The Japanese Yen fell 1.3% closing at $142.16.
Bonds
Germany’s 10-year yield closed 1 basis points higher at 2.64%.
Britain’s 10-year yield closed 4 basis points lower at 4.65%.
U.S.10 Year Treasury closed 3 basis points higher at 4.09%.
Commodities
West Texas Intermediate crude closed 2.87% higher at $73.86 a barrel.
Gold closed 0.7% higher at $1924.10 an ounce.
This morning on the Economic Front we Euro-Zone Sentix Investor Confidence at 9.30 am. This is followed by U.S. Wholesale Inventories at 3.00 pm. Finally, we have Consumer Credit at 8.00 pm.
Cash S&P 500
Weaker than expected Non-Farm Payrolls saw the S&P hit an afternoon high at 4440 before an aggressive sell programme saw the S&P fall 40 Handles in the last hour of trading. Maybe higher Bond Yields do matter in this grossly overvalued market. The S&P has continued to fall overnight, hitting my 4380-buy level. As I am now long the Dow, I will lower my S&P T/P level to 4390. I will add to this position at 4362 while leaving my 4349 fixed stop unchanged. If stopped, I will be an aggressive buyer from 4320/4336 with the same 4309 ‘’Closing Stop’’. The S&P has resistance from 4412/4430 where I will be a seller with a 4445 ‘’Closing Stop’’ which is just above Friday’s high print. If any of the above levels are hit I will be back with a new update for my Platinum Members.
EUR/USD
There is no doubt that the Euro dynamic has changed. All selloffs have been aggressively bought over the past month. Friday’s move higher saw my 1.0940 T/P level on my 1.0900 long position triggered, and I am now flat. Today, I will again be a buyer on any dip lower to 1.0850/1.0920 with a 1.0785 ‘’Closing Stop’’.
June Dollar Index
The Dollar fell 0.70% on Friday on the weaker Payrolls number. This move lower has me long at a price of 102.27. I will add to this position at 101.69 with a now lower 100.95 ‘’Closing Stop’’. I will now lower my T/P level to 102.60. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
Unfortunately, the DAX missed Friday’s initial 15440 buy level by 15 points before rallying 200 points and I am still flat. Following the weakness in U.S. Futures Markets overnight, the DAX is opening lower at 15560 this morning. Today, I will continue to be a buyer on any dip lower to 15340/15440 with the same 15265 ‘’Closing Stop’’. If triggered, I will have a T/P level at 15550.
Cash FTSE
The FTSE missed my initial 7220 buy level by six points before having a small rally into the close. I am still flat. Today, I will lower my buy level again to 7130/7190 with a 7075 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The Dow hit a post NFP high at 34035, enabling me to exit my 34040 average long position at 34000. Subsequently, the Dow sold off hard into the close. I bought the Dow again at an average price of 33770 as emailed to my Platinum Members. This morning the Dow is trading lower at 33650. I will have a 33545 ‘’Closing Stop’’ on this position. The 50-Day Moving Average comes in at 33612 and should act as support on any initial test. I will have a T/P level at 33900 on this position. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
My NDX plan worked well as the market rallied to my 15150-sell level post the NFP release. After we sold off, I emailed my Platinum Members to exit any short position at 15070. I also told them to re-sell the market which we did at a price of 15180 before selling off to my 15107 T/P level and I am now flat. Just like the other American Indexes the NDX sold off hard into the close. We have resistance from 15110/15210 where I will again be a seller with a 15305 ‘’Closing Stop’’. I still do not want to be long the NDX at this time.
September BUND
I am still flat. The Bund traded in a narrow range on Friday as the market waits for its next tradeable signal. We have short-term support from 129.80/130.50 where I will be an aggressive buyer with a 129.25 ‘’Closing Stop’’. If triggered, I will have a T/P level at 131.15.
Gold Rolling Contract
Gold hit a high of 1935 on Friday afternoon, before falling $11 into the close. I will now raise my buy level to 1890/1905 with a higher 1879 ‘’Closing Stop’’.
Silver Rolling Contract
Silver closed the week at a price of 23.10. I am pleased as last week’s move lower saw a nice reversal. I am still long at 23.63 with the same no stop policy. In my opinion, Silver is grossly undervalued. I will continue to have a TP level at 24.20. If this changes I will be back with a new update for my Platinum Members.
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