The U.S Equity Market sell-off continued Monday to see the S&P 500 lose 2.6% across Friday and Monday, its largest two-day sell-off in more than a year, and now closing beneath its 50 Day Moving Average for the first time in five months, according to Bloomberg, reflective of the weakening technical backdrop for risk assets. The VIX climbed above 19. While stock futures had made a recovery attempt during the overnight session after geopolitical hedges from the weekend were unwound, later reporting Israel was working on a retaliation contributed to renewed risk off conditions during stateside trade, with Gold, Oil, and haven currencies all finding some momentum into the APAC session here. Treasuries saw heavy losses, with the focus returning to the hot US economic conditions, highlighted by the massive beat in Retail Sales earlier, although yields did pare off highs as the geopolitical angst rose again into the New York afternoon. The Dollar Index hit new Year-to-Date peaks, while USD/JPY also found new multi-decade highs above 154, although some of the Iran/Israel angst has put a stop to the Yen’s rot for now. New York Fed President Williams (voter), in a Bloomberg interview, said he does not want to speculate on rate moves but in his own view, rate cuts will likely start this year if inflation continues to come down, in relation to real rates. Williams said that consumer spending has been strong and the economy is seeing tailwinds from the supply side of the economy. On recent data, Williams said he does not see the March CPI report as a turning point, nor a game changer. However, he said it is important for affecting forecasts. Williams said he is more optimistic on potential growth while he reiterated monetary policy is in a good place whilst stressing data dependence. Williams also repeated he expects the economy will grow at a solid rate. He acknowledged that consumer spending is driven by strong fundamentals, yield markets are pretty stable, and the economy has come into better balance. Williams sees potential of around 2% growth or higher, also noting that wage growth is a bit high but it is moving in the right direction. The NY Fed President also said it is prudent to start slowing the pace of its balance sheet unwind. Headline Retail Sales rose by 0.7%, above the 0.3% forecast but down from the prior (upwardly revised) 0.9%, the ex-autos measure surged 1.1% from the prior 0.6%, above the 0.3% forecast, while ex-gas and autos rose by 1.0% from the prior 0.5% – showing widespread gains across consumer spending. The control group, which feeds into US GDP, rose by 1.1%, accelerating from the prior 0.3% and above the 0.4% forecast. Overall, a very strong report with the economy still showing resilience in the wake of Fed rate hikes. Looking into the report, upside in gas stations (+2.1%), Miscellaneous store retailers (+2.1%), nonstore retailers (+2.7%), and general merchandise stores (+1.1%) led the upside. Underperforming areas of business included Sporting goods, hobby/musical instruments and book stores (-1.8%), Clothing (-1.6%), Electronics (-1.2% and Motor vehicle and parts dealers (-0.7%). Despite the overall hot report with revisions higher, ING highlights “that the retail sales number is a nominal dollar growth rate and with inflation running so hot this is accounting for much of the growth. Real retail sales, i.e. retail sales adjusted for inflation, are much weaker and essentially have been flat for the past three years”. Nonetheless, the Atlanta Fed GDPNow Q1 tracker has been bumped up to 2.8% from 2.4%. Elsewhere, Oil closed 0.29% lower while following a volatile session Gold ended Monday with a 1.5% gain.
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 was lost 220 points yesterday and is now ahead by 1604 points for 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 1.20% lower at a price of 5061.
The Dow Jones Industrial Average closed 248 points lower for a 0.65% loss at a price of 37,735.
The NASDAQ 100 closed 1.65% lower at a price of 17,706.
The Stoxx Europe 600 Index closed 0.13% higher.
Yesterday, the MSCI Asia Pacific closed 0.6% lower.
Yesterday, the Nikkei closed 0.74% lower at a price of 39,232.
Currencies
The Bloomberg Dollar Spot Index closed 0.15% higher.
The Euro closed 0.8% lower at $1.0641.
The British Pound closed 0.7% lower at 1.2450.
The Japanese Yen fell 0.2% closing at $153.22.
Bonds
Germany’s 10-year yield closed 9 basis points higher at 2.45%.
Britain’s 10-year yield closed 10 basis points higher at 4.224%.
U.S.10 Year Treasury closed 12 basis points higher at 4.64%.
Commodities
West Texas Intermediate crude closed 0.29% lower at $85.41 a barrel.
Gold closed 1.5% higher at $2380.10 an ounce.
This morning on the Economic Front we have German Wholesale Price Index and U.K. Unemployment at 7.00 am. Next, we have the German and Euro-Zone ZEW Surveys at 10.00 am. This is followed by U.S. Building Permits and Housing Starts at 1.30 pm and Capacity Utilisation at 2.15 pm. Finally, we have speeches from Fed Members Jefferson at 2.00 pm, Williams at 5.30 pm and Chairman Powell at 6.15 pm.
Cash S&P 500
Wrong! The S&P hit a high at 5170 before falling over 110 Handles in the most aggressive sell-off of 2024 to date. This move lower saw the S&P hit my 5099 average buy level before stopping me out near the close at 5069 and I am now flat. This move lower saw the S&P close below its 50 Day Moving Average (5114) since last November. Monday was an ugly sell-off coming on the back of Friday’s aggressive sell-off for a 3% + sell-off in two trading sessions. This latest move lower saw the Weekly 14 MA tested. This is a key support zone as the past five months the S&P has rallied aggressively off any test of this support level. The S&P is now close to my 5000/5050 support zone. I will now tighten my buy level to 5030/5045 with a 5017 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 5080.
EUR/USD
Wrong! The Euro has fallen over 2% since last Wednesday, back to levels not seen since last November. This move lower stopped me out of my 1.0798 latest long position at 1.0653 and I am now flat. The Euro is severely oversold as shown by the Daily Sentiment Indicator which closed with a 9 print on Friday. The Euro has support from 1.0550/1.0620 where I will again be a buyer with a wider 1.0495 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 1.0685. I still do not want to be short the Euro at this time.
Dollar Index
No Change. I am still short the Dollar from earlier yesterday morning at a price of 106.05 with the same 105.60 T/P level. I will continue to look to add to this position on any further move higher to 106.85. Meanwhile I will leave my 107.35 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
No Change. I have no interest in chasing the DAX higher or neither do I have an interest in being short the market. Therefore, I will continue to be a buyer on any dip lower to 17650/17750 with a now lower 17535 wider ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 17840.
Cash FTSE
The FTSE traded in a narrow range yesterday and I am still flat. Today, I will continue to be a buyer on any further dip lower to 7800/7870 with the same 7745 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time. If I am taken long, I will have a T/P level at 7940.
Dow Rolling Contract
The Dow traded lower tom my buy zone. I am now long at 37750 with a now lower 37930 T/P level. I will add to this position at 37500 while leaving my 37395 ‘’Closing Stop’’ unchanged.
Cash NASDAQ 100
The NDX has fallen over 3.5% in the past two days. This move lower saw the whole of my buy range triggered, for a now 177780 average long position. I will leave my 17595 ‘’Closing Stop’’ unchanged while lowering my T/P level to 17865. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
March BUND
The huge rise in Treasury Yields saw the Bund hit my buy range for a now 131.90 long position. I will continue to look to add to this position at 131.10 while leaving my 130.65 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 132.45. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
After weeks where Gold never moved, we are now seeing $50/$100 daily ranges. I am still flat as Gold just fell shy of yesterday’s sell-range. Today, I will now raise my Gold sell level to 2395/2415 with the same no stop if triggered. I will have a T/P level at 2370 on any executed short position. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
My Silver plan worked well as the market traded lower to my 27.80 buy level before rallying to my 28.60 T/P level and I am now flat. Silver has strong support from 27.00/27.80 where I will again be a buyer with the same wider 25.95 ‘’Closing Stop’’. I still do not want to be short Silver at this time.
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