Equity Markets have been choppy to start the week, albeit in very thin newsflow, as participants await the key risk events such as FOMC Minutes, Nvidia (NVDA) earnings, and UK inflation data tomorrow Wednesday followed by US PMIs on Thursday. U.S. Indices ended the day mixed (SPX flat, Russell +0.4%, DJIA -0.5%) with the Nasdaq 100 (+0.7%) outperforming and seeing tailwinds from Nvidia (+2.5%) ahead of earnings on Wednesday, whereby it had a couple of PT raises at different brokerages. Sectors are mixed – Tech is outperforming and Financials are the laggard, weighed on by JPMorgan (JPM) (-4.5%) after CEO Dimon said the bank is not going to engage in buybacks at these prices, and also noted the succession timetable is no longer five years anymore, indicating it could be less. The Dollar is flat and within tight parameters as Antipodeans and the Japanese Yen lag, with the latter’s cross hitting a peak of 156.55 overnight. The crude complex was choppy, but settled lower amid no geopolitical escalation and no indication of any foul play in Iranian President death. Spot gold and copper hit All-Time-Highs, although now sit off best levels. Treasuries were lower and curve steepened in catalyst light trade ahead of the week’s aforementioned major risk event.
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For anyone following my Platinum Service it made 300 points yesterday and is now ahead by 1334 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 0.09% higher at a price of 5308.
The Dow Jones Industrial Average closed 196 points lower for a 0.49% loss at a price of 39,806.
The NASDAQ 100 closed 0.69% higher at a price of 18,674.
The Stoxx Europe 600 Index closed 0.18% higher.
This Morning, the MSCI Asia Pacific closed 0.3% higher.
This Morning, the Nikkei closed 0.31% lower at a price of 38,946.
Currencies
The Bloomberg Dollar Spot Index closed 0.16% higher.
The Euro closed 0.1% lower at $1.0857.
The British Pound closed 0.04% higher at 1.2706.
The Japanese Yen fell 0.4% closing at $156.28.
Bonds
Germany’s 10-year yield closed 2 basis points higher at 2.54%.
Britain’s 10-year yield closed 5 basis points higher at 4.18%.
U.S.10 Year Treasury closed 2 basis points higher at 4.44%.
Commodities
West Texas Intermediate crude closed 0.49% lower at $79.67 a barrel.
Gold closed 0.4% higher at $2426.10 an ounce.
Today on the Economic Front we already had the release of German April PPI which rose 0.2% versus +0.3% expected. Next, we have Euro-Zone Construction Output and Trade Balance at 10.00 am. At 1.30 pm we have Canadian CPI. Finally, we have Fed Members Waller, Williams and Barr speaking at 2.00 pm, 2.05 pm and 3.45 pm respectively.
Cash S&P 500
One concern for me with the latest new highs in the Dow, NASDAQ and S&P is the lack of upward performance in the Russell 2000. This is noteworthy as this Index is broad with a wider beta than the Blue-Chip Stock Indexes. History tells us that long and sustained bull markets never occur without broad participation by the Russell. That is not happening. Since November 8, 2021, the day of the Russell 2000’s closing high, the total return through last Friday’s close is minus 11.04%. This is an incredible stat when you see what the main Indexes have done in the last three years, despite the COVID Crash. These are not normal markets as shown by seasonality which is totally ‘’off’’ at the moment. Both March and May were supposed to be down months but March saw record highs and May probably will do as well unless something dramatic happens in the next 10 days. All the main S&P forecasters have not seen this rally. At the beginning of January, the average expectation for year-end 2024 S&P target was 4870. Now we are above 5300 and it is only May. The Fed draining the TGA account will add further liquidity into June, coming on top of massive easing in Financial Conditions which are even easier now than when they stated raising rates in 2022. There is no doubt that fiscal dominance is driving everything. Even the guru Warren Buffet is sitting on $180 billion in cash as he sees the expensive valuations currently prevailing. All eyes will be on the earnings from NVIDIA after the close tomorrow. Yesterday, my S&P plan worked well as the market hit my 5324-sell level before falling over 20 Handles. As I have enough short exposure on board, I covered this shot S&P position at 5320 and I am still flat. Meanwhile, I will continue to be a buyer on any dip lower to 5255/5270 with the same 5239 ‘’Closing Stop’’. The S&P has resistance from 5330/5346 where I will be a small seller with a higher 5361 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 5316. If I am taken long, I will have a T/P level at 5288.
EUR/USD
Currency Markets continue to trade in narrow ranges, and I am still flat. Today, I will continue to be a buyer of the Euro on any dip lower to 1.0760/1.0830 with the same 1.0695 ‘’Closing Stop’’. I still do not want to be short the Euro. If this view changes, 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 unchanged at 104.50. The Dollar is oversold now. We have short-term support from 103.30/104.00. I will now raise my buy level to this area with a higher 102.75 ‘’Closing Stop’’. I still do not want to be short the Dollar at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash DAX
The DAX traded sideways/higher yesterday in thin trading. I am still flat. Given how overbought the DAX is at this time I will not chase the market higher, leaving my 18570/18650 buy level unchanged with the same 18495 ‘’Closing Stop’’. I still do not want to be short the market at this time. If this view changes, I will be back with an new update for my Platinum Members.
Cash FTSE
For the past week the FTSE has sat between 8390 and 8450 as the market tries to work off some of its overbought conditions. I am still short at an average rate of 8380 with a now higher 8340 T/P level. I will continue to look to add to this position again on any further rally to 8500 with the same no stop policy for now. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
It took a new all-time high at 40080 yesterday afternoon to attract some selling in the Dow. This move lower saw my 39830 T/P level triggered on last week’s 39920 short position and I am now flat. This morning the Dow is trading at 39815 after a quiet overnight session. The Dow is overbought on a short-term basis. Given the valuations it is hard to be a buyer at these levels as outlined by JP Morgan CEO Dimon yesterday. The Dow has resistance from 40000/40250 where I will again be a seller with a higher 40405 ‘’Closing Stop’’. I still do not want to be long the Dow at this time.
Cash NASDAQ 100
No Change: I am still short the NDX at an average rate of 18385 with the same no stop policy. With the NDX having risen 9.4% in three weeks, I have decided to hold this short position for now. I will have a T/P level on this position at 18320. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
March BUND
No Change: I am still long the Bund at an average rate of 130.95. I will now lower my T/P level to 131.20 while leaving my 129.85 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
My Gold plan worked well as after the market hit my 2408 buy level we had a quick $20 rally. As my buy level in Silver hit at the same time, I covered my long Gold position at my revised 2415 T/P level and I am now flat. Gold has support below from 2382/2397 where I will again be a buyer with a lower 2369 ‘’Closing Stop’’.
Silver Rolling Contract
My Silver plan worked well as the market sold off to my 31.05 buy level before rallying to my 32.05 T/P level and I am now flat. As long as Silver does not close below 29.80, I will continue to be a buyer of dips. Today, I will again be a buyer on any dip lower to 30.20/31.00 with a now lower 29.55 tight ‘’Closing Stop’’.
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