U.S Equity Markets ended flat in choppy trade on Monday as Indices took pause from their recovery with a lack of major macro catalysts except for the Japanese Yen intervention. While there was no tier 1 data, we did get the US quarterly financing estimates ahead of the quarterly refunding announcement on Wednesday, which came in above estimates and led to some downside in stocks and bonds in late trade, although that faded into the close. TSLA (+15%) and AAPL (+2.4%) were standout outperformers, with the former seeing a further short squeeze on reports it has received approval for FSD in China, while AAPL benefitted from an upgrade at Berstein ahead of its earnings on Thursday. Treasuries rallied after soft European inflation data kicked the bid into month-end, while the Boeing jumbo IG deal capped strength. The Dollar Index was lower amid the Yen surging higher after the BoJ was touted to intervene. Oil prices were lower with positive noise around the Israel/Hamas peace talks taking some geopolitical risk premium out of the market. Looking ahead, attention is on Wednesday’s Quarterly Refunding Announcement (no changes in coupons expected) and the FOMC with Powell expected to tow a more hawkish line given the data, followed by NFP on Friday. We also get ECI on this afernoon, JOLTS, ADP, and ISM Manufacturing on Wednesday, and ISM Services on Friday. Note we are in the month-end period too, so related buying flows will remain a topic of conversation heading into Tuesday after the strong sell-off earlier this month. Elsewhere, Oil closed 1.36% lower while Gold was falt.
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For anyone following my Platinum Service it made 245 points yesterday and is now ahead by 4060 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 0.32% higher at a price of 5116.
The Dow Jones Industrial Average closed 146 points higher for a 0.38% gain at a price of 38,386.
The NASDAQ 100 closed 0.36% higher at a price of 17,782.
The Stoxx Europe 600 Index closed 0.07% higher.
This Morning, the MSCI Asia Pacific closed 0.5% higher.
This Morning, the Nikkei closed 1.24% higher at a price of 38.405.
Currencies
The Bloomberg Dollar Spot Index closed 0.30% lower.
The Euro closed 0.2% higher at $1.0722.
The British Pound closed 0.4% higher at 1.2562.
The Japanese Yen rose 1.4% closing at $156.05.
Bonds
Germany’s 10-year yield closed 3 basis points lower at 2.53%.
Britain’s 10-year yield closed 4 basis points lower at 4.29%.
U.S.10 Year Treasury closed 4 basis points lower at 4.62%.
Commodities
West Texas Intermediate crude closed 1.36% lower at $82.71 a barrel.
Gold closed 0.1% lower at $2335.10 an ounce.
This morning on the Economic Front we already had the release of German Retail Sales which rose 1.8% versus +1.3% expected. Next, we have German Unemployment at 8.55 am and GDP at 9.00 am. This is followed by U.K. Consumer Credit and Money Supply at 9.30 am. At 10.00 am we have Euro-Zone CPI and GDP. At 1.30 pm we have U.S. Employment Cost Index, followed by the Housing Price Index at 2.00 pm. Finally, we have the Chicago Purchasing Managers’ Survey at 2.45 pm and Consumer Confidence at 3.00 pm.
Cash S&P 500
As we know from history it is extremely difficult to be short the S&P for any length of time. Yes, we get periods of weak markets but these bouts of selling do not last long. Friday’s aggressive 130 Handle Reversal is another example where short positions were obliterated. The main catalyst for this is the loosest Financial Conditions in over two years. Liquidity trumps everything at the minute as both Yellen and the Fed will do everything in their power to prevent any type of crash ahead of the November 5 Presidential Elections. As I mentioned yesterday, I see the ingredients for a possible melt-up to new highs instead of new lows in the S&P. Signal Charts are not anywhere near overbought, indeed they remain vastly oversold. Tax payments in Mid-April led to a reduction in bank reserves and thereby liquidity which I believe led to selling in U.S. Equity Markets, but now that is being phased out and that means bank reserves and liquidity are going back up in the weeks to come. Similar to January this would be supportive of the S&P going forward. The VIX closed 2.5% lower yesterday and is now below both its 50 and 200-Day Moving Averages. If we sell follow through today, then it is only a matter of time before the 50 Day Moving Average for the S&P (5126) is broken. Recent weeks saw a refilling of the TGA account to nearly $1 trillion dollars. My view is this was one of the main reasons for the rise in Treasury Yields. What happens when the TGA account gets drained again? It relieves the pressure off bond yields and adds liquidity to the system. For all of the above reasons I no longer want to be short the S&P at this time. This change comes despite my 5122-sell level in the S&P working so well yesterday as the market quickly sold off to my 5108 T/P level and I am now flat. I will now raise my S&P buy level to 5078/5093 with a higher 5063 ‘’Closing Stop’’.
EUR/USD
I am still flat the Euro as the market again traded in a narrow range. Today, I will raise my buy level slightly to 1.0610/1.0680 with a higher 1.0535 ‘’Closing Stop’’. I still do not want to be short the Euro at this time.
Dollar Index
Dollar/Yen falling 2.5% due to the aggressive intervention by the Bank of Japan saw my 105.60 T/P level triggered on last week’s 106.10 short position and I am now flat. This morning the Dollar is trading unchanged. We have resistance from 106.10106.70 where I will again be a seller with the same 107.15 ‘’Closing Stop’’. I still do not want to be long the Dollar at this time.
Cash DAX
The DAX just missed my initial 18280 sell level before falling over 120 points and I am still flat. There is no need to take any unnecessary risk ahead of Wednesday’s FOMC Statement. Therefore, I will continue to be a seller on any further rally to 18280/18370 with the same tight 18455 ‘’Closing Stop’’. My only interest in buying the market is on a move lower to 17900/17980. If triggered, I will have a ‘’Closing Stop’’ at 17825 while my T/P level will be 18060. If I am taken short, I will have a T/P level at 18210.
Cash FTSE
The FTSE traded in a narrow range yesterday and I am still flat. We have short-term support from 8020/8090 where I will continue to be a buyer with the same 7955 tight ‘’’Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
No Change: The Dow continues to underperform the other major U.S. Indexes and I am still flat. All eyes will be on the FOMC Statement tomorrow and the subsequent Powell press conference. Normally the market rallies ahead of this Statement and given Friday’s rebound ahead of month-end tomorrow, I would expect the status quo to remain. The 50 -Day Moving Average has fallen slightly to 38790. I will now lower my Dow sell level to 38680/38930 while leaving my 39105 ‘’Closing Stop’’ unchanged. I still do not want to be long the Dow at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
I am still flat the NDX. The market has now risen over 900 points off its April 19 low of 16973. However, for bulls to regain control, the NDX needs to break and close above its 50-Day MA which comes in at 17937 this morning. As a result, I will be a small seller from 17870/18020 with a tight 18105 ‘’Closing Stop’’. I no longer want to be long the NDX at this time despite Friday’s huge reversal. If this view changes, I will be back with a new update for my Platinum Members.
March BUND
My latest 1301.5 average long Bund position worked well as the Bund rallied to my 130.70 T/P level yesterday and I am now flat. Today, I will again be a buyer on any dip lower to 129.70/130.40 with the same 128.95 ”Closing Stop”. If triggered, I will have a T/P level at 131.05.
Gold Rolling Contract
No Change: I am still flat. I do not want to chase Gold higher especially as I am still long Silver. Today, I will continue to be a buyer on any dip lower to 2280/2295 with the same 2259 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2309. I no longer want to be short Gold at this time.
Silver Rolling Contract
No Change. I am still long Silver at an average rate of 27.30 with the same 27.90 T/P level. I will leave my 25.95 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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