U.S. Equity Markets were choppy on Tuesday with the Indices holding on to their recent strength with mixed performances under the surface. There were no major macro catalysts on Tuesday, with the softer Manheim used car vehicle index the data “highlight”, while the US 3 Year Treasury auction saw solid demand ahead of the 10 Year and 30 Year offerings this evening and tomorrow. Semiconductors were largely an area of weakness, weighed on by Wall Street Journal reports that Apple ( AAPL) was developing its own AI chips for data centre servers, meanwhile, AAPL also announced its new iPads that include its new AI-bolstered M4 chips. Elsewhere, Treasuries bull-flattened with traders front-running the auctions which are expected to see strong demand given last week’s events, with yields out the curve (10yr and beyond) making fresh lows beyond last Friday’s lows. Oil prices hit their lowest levels since mid-March, with the market becoming desensitised to Rafah headlines while Russia touted potential production increases. The Dollar Index saw mild gains. Gold and other metals saw losses. A strong 3yr auction from the Treasury with last week’s soft NFP and dovish Powell likely widening the demand base. USD 58bln worth of notes were sold at 4.605%, marking a stop-through of the When Issued yield by 0.3bps, better than the six-auction avg. tail of 0.1bps and prior month’s tail of 2bps. The auction was covered 2.63x, better than the prior 2.5x and avg. 2.57x. Dealers were left with 14.9%, down from the prior 19.3% and avg. 18.3%, with a slight fall from April in Directs demand (19.6% from 20.4%) more than offset by a pick-up in Indirects demand (65.5% from 60.3%). Attention now on Wednesday’s USD 42bln 10yr auction and Thursday’s USD 25bln 30yr auction. Elsewhere, Oil closed flat while Gold ended Tuesday with a 0.5% loss.
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For anyone following my Platinum Service it was flat yesterday and is still ahead by 922 points for May, having finished April with a gain of 4010 points 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 0.13% higher at a price of 5187.
The Dow Jones Industrial Average closed 31 points higher for a 0.08% gain at a price of 38,883.
The NASDAQ 100 closed 0.01% lower at a price of 18,091.
The Stoxx Europe 600 Index closed 1.14% higher.
This Morning, the MSCI Asia Pacific closed 0.5% lower.
This Morning, the Nikkei closed 1.63% lower at a price of 38,202.
Currencies
The Bloomberg Dollar Spot Index closed 0.17% higher.
The Euro closed 0.1% lower at $1.0757.
The British Pound closed 0.3% lower at 1.2508.
The Japanese Yen fell 0.48% closing at $154.65.
Bonds
Germany’s 10-year yield closed 6 basis points lower at 2.42%.
Britain’s 10-year yield closed 8 basis points lower at 4.14%.
U.S.10 Year Treasury closed 4 basis points lower at 4.44%.
Commodities
West Texas Intermediate crude closed 0.2% lower at $78.41 a barrel.
Gold closed 0.4% lower at $2315.10 an ounce.
This morning on the Economic Front we already had the release of German Industrial Production which fell 0.4% versus -0.6% expected. Next, we have U.S. MBA Mortgage Applications at 12.00 pm and Wholesale Inventories at 3.00 pm. Meanwhile, Fed Members Jefferson, Collins and Cook are speaking at 4.00 pm, 4.45 pm and 6.30 pm respectively. Finally, we have a 10-Year Treasury Auction at 6.00 pm.
Cash S&P 500
The S&P traded in a narrow range yesterday which is no surprise given the huge 180 Handle rally since Thursday. With the S&P short-term overbought on top of leaving a massive 36 Handle Gap from last Thursday’s Chicago close at 5065, I find it hard to be a buyer at these levels. However, with all the main Moving Averages now recovered any sell-off will attract large buying at the 50 Day MA which comes in at a price of 5134 this morning. Seasonally the next two weeks are weak before we hit the strong summer seasonality, leading to a possible melt-up in the market. This melt-up is a strong possibility in my opinion give how undervalued asset managers are at this time. I will now raise my buy level to 5142/5147 with a higher 5127 ‘’Closing Stop’’. Below here the S&P will have strong support at Thursday’s 5065 Chicago close where I will continue to be an aggressive buyer on any test. Despite how overbought the S&P at this time, I still do not want to be short the market. If this view changes, I will be back with a new update for my Platinum Members.
EUR/USD
Despite the strong Equity Markets, the Euro is weak, hitting my initial 1.0740 buy level overnight. I am still long with a now lower 1.0780 T/P level. I will add to this position at 1.0670 while leaving my 1.0595 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
I am still flat the Dollar. This morning the Dollar is trading 0.25% higher at 105.50. As I am now long the Euro, I will raise my Dollar sell level to 105.80/106.40 with a higher 107.05 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 105.35.
Cash DAX
Thankfully we have had no sell levels in the DAX as every dip continues to be aggressively bought by traders. This morning the DAX is trading 250 points higher from where I marked prices yesterday morning at 18450. I am tempted to go short, but I will stick to my discipline and refrain for now as shorting the DAX causes a lot of unnecessary stress. I will raise my DAX buy level slightly to 18150/18230 with a higher 18065 tight ‘’Closing Stop’’.
Cash FTSE
The FTSE continues to make new all-time highs, trading at 8340 this morning. The 14 Day RSI for the FTSE stands at 76.2 as I go to press. I have no idea why but every time the RSI gets this ‘’hot’’ a larger pullback is coming. And just to highlight the historical absurdity here, the Weekly RSI is higher now than any time during the past 10 years. Adding to the mix is the fact that the FTSE is trading well outside the Weekly Bollinger Band. So, a pullback won’t surprise and is the main reason why I am now short at a price of 8350. I will add to this position at 8410 while leaving my 8455 ‘’Closing Stop’’ unchanged. Meanwhile, I will leave my 8290 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
No Change: The Dow has short-term resistance from 39050/39300 where I will continue to be a small seller with the same 39505 wider ‘’Closing Stop’’. The Dow is now severely overbought on the 15-minute chart. I no longer want to be a buyer of the Dow at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
Frustratingly, the NDX just missed yesterday’s sell range by 10 points before falling over 100 points and I am still flat. I am not going to chase the NDX lower, leaving my 18170/18320 sell level unchanged with the same 18425 tight ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 18070.
March BUND
The Bund ever came close to yesterday’s buy range and I am still flat. Today, I will again raise my buy level to 130.50/131.20 with a higher 129.95 ‘’Closing Stop’’. I still do not want to be short the Bund at this time.
Gold Rolling Contract
Gold traded in a narrow range yesterday and I am still flat. Ahead of today’s economic data, I will now lower my Gold buy level to 2282/2297 with a lower 2269 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2309.
Silver Rolling Contract
I am still long Silver at an average rate of 27.30. This morning, Silver is trading unchanged at 27.40. I will continue to have no stop on this position while leaving my 27.70 T/P level 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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