U.S. Equity Markets were largely sold on Monday with the rate-sensitive sectors of the market underperforming after the hot ISM manufacturing survey unwound Fed cut expectations. The market is now priced for c. 65bps of Fed cuts this year vs 70bp+ before the data, while the first fully priced cut has been pushed back to September from July. Treasuries saw heavy selling (2s +9bps at 4.71%, 10s +13bps at 4.33%) amid the hot ISM data and the passing of month-end buying, with a healthy slew of corporate debt deals adding additional selling pressure. The Dollar saw a strong bid amid the hot US data with Euro on watch ahead of the region’s return this morning, with German inflation figures due. Oil prices continued their breakout to the upside with the hot US and China PMI data providing tailwinds. China stocks surged, with the Yuan flat against the strong Dollar. Headline ISM Manufacturing PMI rose to 50.3 from February’s 47.8, above the 48.4 forecast, moving back into expansionary territory. Within the report, the Prices metric was hotter than forecast at 55.8 from 52.5 (exp. 52.7), showing an acceleration of prices in March from February ahead of the March CPI data due March 10th, with the upside stemming from commodity inflation. The March employment component, ahead of Friday’s February NFP, rose to 47.4 from 45.9, but remained in contractionary territory. The Production Index saw a notable 6.2 climb to 54.6 while New Orders rose to 51.4 from 49.2. Overall, the jump to 50.3 was the first time the manufacturing sector had been in expansion for the first time since September 2022. ISM highlighted that “Demand was positive, output strengthened and inputs remained accommodative”. ISM noted the demand improvements were observed by New Orders back in expansionary territory with respondents giving fewer comments regarding “softening”, while the backlog was similar to February and the Customers’ Inventories Index contracted for the fourth consecutive month, remaining at a level accommodative for future production. On outputs, “Panelists’ companies notably increased their production levels month over month. Head-count reductions continued in March, with sizable layoff activity reported.” Meanwhile, inputs continued to accommodate future demand growth and showed signs of stiffening. Elsewhere Oil rose 0.65% while despite a stronger Dollar, Gold surged closing higher by 1.8%.
To mark my 2975th 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 259 points yesterday on the first trading session of April after ending March with a gain of 2113 points. February closed with a gain of 1606 points, after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 points, after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, following a small gain of 285 points gain in 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 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 0.20% lower at a price of 5243.
The Dow Jones Industrial Average closed 240 points lower for a 0.60% loss at a price of 39,566.
The NASDAQ 100 closed 0.21% higher at a price of 18,293.
The Stoxx Europe 600 Index closed 0.18% higher last Thursday.
Yesterday, the MSCI Asia Pacific closed 0.6% higher.
Yesterday, the Nikkei closed 1.40% lower at a price of 39,803.
Currencies
The Bloomberg Dollar Spot Index closed 0.41% higher.
The Euro closed 0.7% lower at $1.0746.
The British Pound closed 0.5% lower at 1.2551.
The Japanese Yen fell 0.2% closing at $151.65.
Bonds
Germany’s 10-year yield closed 1 basis points higher at 2.30%.
Britain’s 10-year yield closed 1 basis points lower at 3.93%.
U.S.10 Year Treasury closed 12 basis points higher at 4.32.
Commodities
West Texas Intermediate crude closed 0.65% higher at $83.71 a barrel.
Gold closed 1.8% higher at $2251.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K Manufacturing PMI at 8.55 am, 9.00 am and 9.30 am respectively. Next, we have German CPI at 1.00 pm, followed by U.S. JOLTS Job Openings and Factory Orders at 3.00 pm. Finally, we have speeches from Fed Members Bowman, Williams, Mester and Daly at 3.10 pm, 5.00 pm, 5.05 pm and 6.30 pm respectively.
Cash S&P 500
The S&P made a new trading high on Thursday at 5264. Early Monday morning, this high was surpassed with its latest all-time-high at 5276. Crucially this new high was not matched by either the Dow or the NASDAQ 100. Higher Treasury Yields weighed on the Dow in particular which fell over 550 points from its early Monday morning high. Monday’s sell-off was the sixth Downside Key Day Reversal since late December. None of these previous KDR’s have mattered as each time we saw strong buying that eventually led to new all-time highs on each occasion. With Oil prices closing over $83 there is no chance that inflation can be lower in April when we get the next official data, further putting the Fed in an even more precarious position. The Weekly RSI is as high now as it was before the COVID crash in 2020. I am not saying the market will crash from here, but the risk/reward is certainly not to be long the S&P at this time. My S&P plan worked well as the market traded the whole of my revised sell level as emailed to my Platinum Members on Thursday for a 4259 average short position, before selling off to my 5240 T/P level and I am still flat. Today. I will again be a seller from 5258/5274 with a higher 5287 ‘’Closing Stop’’. I will continue to be a buyer on any large move lower to 5140/5156 with the same tight 5129 ‘’Closing Stop’’.
EUR/USD
The Euro got hit hard yesterday, almost stopping me out of my 1.0845 average long position, by closing one point above my stop at 1.0746. I will now lower my ‘’Closing Stop’’ to 1.0729 while lowering my exit level to a small loss at 1.0798. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
Wrong! On Thursday, I was stopped out of my 103.65 average short position at 104.45 and I am now flat. This morning, the Dollar is trading higher at 105.00. We have resistance from 105.30/106.00 where I will again be a seller with a higher 106.55 ‘’Closing Stop’’.
Cash DAX
No Change. What Recession as indicated by the Bundesbank last week? The result another new all-time high in the DAX again with the market now trading above 18500. This relentless move higher is similar to 2015 when the Weekly RSI was at 79. In April of that year the market fell apart losing over 10% in a two-week period. I am going to stay flat the DAX until after the Easter break. I cannot buy the market here given how fried to the upside the RSI is while trying to pick a top is extremely difficult. If this view changes, I will be back with a new update for my Platinum Members.
Cash FTSE
The Daily RSI closed at an overbought reading of 72 on Thursday. I have checked the data over many years on the FTSE. This data shows that the RSI does not like to stay over 70 RSI for very long without having at least a short-term pullback. I will be a buyer of the FTSE on any pull-back as this market has totally underperformed the other main Indexes for the last number of years. The FTSE has support from 7820/7890. I will now raise my buy level to this area with a higher 7755 wider ‘’Closing Stop’’. If I am taken long, I will have no T/P level on this position.
Dow Rolling Contract
Frustratingly, the Dow missed my 40050-sell level with a 39990 high print before falling nearly 600 points. I am still flat. I will now lower my sell level to 39700/39950 with a lower 40205 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 39540. I still do not want to be long the Dow at this time.
Cash NASDAQ 100
After the NDX finally hit my 18210-buy level yesterday afternoon, we had a small rally to my revised 18254 T/P level and I am now flat. The NDX was the strongest of the American Indexes yesterday, totally ignoring the large fall in the Dow. While the NDX may make a new all-time high above 18464, which was the extreme from March 21, I am not certain. The NDX has resistance from 18400/18550 where I will be a small seller with a higher 18705 ‘’Closing Stop’’. The NDX has support from 17900/18050 where I will be a strong buyer with a 17795 ‘’Closing Stop’’..
March BUND
The Bund never came close to Thursday’s buy range and I am still flat. With Treasury Yields closing higher by 12 basis points yesterday, I would expect the Bund to gap lower at the open this morning. The Bund has strong support from 131.00/131.80 where I will again be a buyer with a lower 130.45 ‘’Closing Stop’’. had a small rally yesterday. I still do not want to be short the Bund at this time.
Gold Rolling Contract
Gold exploded over the Easter Holidays and I am still flat. I am going to stay flat Gold here as I do not want to chase the market higher from these latest all-time highs. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Silver rallied to my 25.10 T/P level on my latest 24.85 average long position, and I am now flat. Silver has support from 23.60/24.40 where I will again be an aggressive buyer with a lower 22.75 ‘’Closing Stop’’.
Recent Comments