US Equity Markets closed lower on Wednesday, with underperformance in the small-cap Russell 2000 as traders await the pivotal Nvidia earnings after-hours. However, better than expected earnings from Nvidia including announcing a 10/1 stock split has led to a new move to all-time highs (ATH) in both the NASDAQ 100 and S&P 500 this morning. The Dollar Index was flat for the majority of the session but saw gains into the close to print a high of 104.970, which saw most G10 peers see losses versus the Dollar and resulted in the New Zealand Dollar wiping out all of its post-RBNZ gains. As a brief recap, it was a hawkish RBNZ hold, as it kept the OCR unchanged at 5.50%, as expected, but noted that monetary policy needs to be restricted, raised OCR projections, and the Minutes revealed the committee discussed the possibility of increasing the OCR at this meeting. UK CPI was hotter-than-expected and has pushed out the first fully priced cut to November (vs. Sept. pre-release). Treasuries saw weakness on account of the aforementioned UK inflation metrics, albeit not as large as European peers, and the US 20 Year Auction had little sway. The dated FOMC Minutes added little new, and largely echoed what Fed officials have recently said with attention now turning to Flash PMIs (Thurs), Prelim University of Michigan (Fri), ahead of Core PCE on May 31st. The crude complex saw further weakness with a continuation of the recent trend, amid a lack of notable geopolitical developments, as gains in wake of the not as large as expected crude EIA build swiftly pared. Lastly, copper and spot gold gave back some of the gains from recent ATHs. In FOMC minutes, members evaluated from recent data that it would take longer than previously thought to gain further confidence in inflation moving sustainably to 2% and suggested the disinflation process would take longer than previously anticipated. Participants mentioned recent data had not increased confidence in progress towards 2% inflation goal and many commented on their uncertainty about the degree of policy restrictiveness. In addition, various participants mentioned willingness to tighten policy further should risks to outlook materialise and make such action appropriate. Given the stale nature of the Minutes, it largely echoed the recent commentary from officials and still highlights progress is still to be made. In reaction, a slight hawkish reaction was seen, although it swiftly pared the move. Elsewhere, Oil closed 1.67% lower while broke $2400, closing lower by 1.5% after a volatile session in precious metals.
To mark my 3000th 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 108 points yesterday and is now ahead by 1491 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 0.27% lower at a price of 5307.
The Dow Jones Industrial Average closed 201points lower for a 0.51% loss at a price of 39,671.
The NASDAQ 100 closed 0.05% lower at a price of 18,705.
The Stoxx Europe 600 Index closed 0.34% lower.
This Morning, the MSCI Asia Pacific closed 0.7% higher.
This Morning, the Nikkei closed 1.26% higher at a price of 39,103.
Currencies
The Bloomberg Dollar Spot Index closed 0.26% higher.
The Euro closed 0.25% lower at $1.0825.
The British Pound closed 0.04% higher at 1.2719.
The Japanese Yen fell 0.3% closing at $156.75.
Bonds
Germany’s 10-year yield closed 4 basis points higher at 2.54%.
Britain’s 10-year yield closed 11basis points higher at 4.24%.
U.S.10 Year Treasury closed 1 basis points higher at 4.42%.
Commodities
West Texas Intermediate crude closed 1.67% lower at $77.35 a barrel.
Gold closed 1.5% lower at $2387.10 an ounce.
This morning on the Economic Front we already have German, Euro-Zone and U.K. Manufacturing PMI at 8.00 am, 9.00 am and 9.30 am respectively. Next, we have U.S. Weekly Jobless Claims and the Chicago Fed National Activity Index at 1.30 pm. This is followed by Manufacturing PMI at 2.45 pm. At 3.00 pm we have New Home Sales and Euro-Zone Consumer Confidence. Finally at 4.00 pm we have the Kansas City Fed Manufacturing Index.
Cash S&P 500
Today is the 3000th addition of Tradernoble. A number of you have been on this whole journey from the start back in February 2013. I would like to thank everyone for their loyalty and continued support over the past 11 years.
The major U.S. indexes were little changed today, and trading volume was relatively low. This does not shock me. As I wrote yesterday, the economic-data calendar does not have much of significance until next week, when new inflation numbers come out. By one market indicator that many of us like to follow is the Volatility Index (VIX). The U.S. stock market has rarely been as “calm” as it is today, and has not been this way since just before the onset of the pandemic in early 2020.This is according to what some call the market’s “fear gauge,” formally known as the Chicago Board Options Exchange’s Volatility Index, or VIX. Long time readers are likely familiar with this measure. But for those who are not or need a refresher, the VIX measures options activity on the U.S. benchmark S&P 500 and displays it with a single number that represents the index’s “implied volatility.” The VIX value is essentially an aggregate of a wide range of S&P 500 Index options. This number is based on bullish or bearish bets – call and put options – expiring in roughly 30 days. A higher VIX, say above 30, indicates greater expected volatility. The VIX hit an all-time high above 80 in March 2020, for example, when the pandemic caught investors off-guard. A lower VIX number, meanwhile, indicates a narrower set of expectations from investors and traders in the options market. You can call this anything from calm to complacency. Most folks are likely ignoring this development since there is nothing to panic about. There is no crisis that is putting the market in a blender and potentially endangering your portfolio. But that does not mean you should ignore it. We already know that this calm is rare. To put the number in context, it is in the 9.2 percentile going back to 1990. That means only 9.2% of other cases have been lower than 12 in the past 34 years. So, what we are seeing right now is a rare market event in and of itself over more than three decades. It is unlikely to last forever, if much longer. I would not be surprised if it rises again relatively soon. Overnight, the S&P has spiked to new highs on the Futures Market. This move higher has me short at 5340. I will add to this position at 5356 with a now higher 5371 ‘’Closing Stop’’. I will now raise my buy level to 5270/5285 with a higher 5255 ‘’Closing Stop’’. I will now raise my T/P level on my short position to 5323. If I am taken long, I will have a T/P level at 5301.
EUR/USD
The Euro finally sold off to my 1.0825 buy level. I am still long with the same 1.0880 T/P level. I will add to this position on any further move lower to 1.0755 while leaving my 1.0695 ‘’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 higher at 104.85. I will now raise my Dollar buy level to 103.70/104.40 with a higher 103.15 tight ‘’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
My DAX plan worked well as the market traded lower to my 18610-buy level before rallying to my 18695 T/P level post NVIDIA Earnings and I am now flat. This morning the DAX is trading higher at 18725. My only interest in buying the DAX is on a further drop lower to 18450/18530 where I will be an aggressive buyer with a lower 18365 ‘’Closing Stop’’. I still do not want to be short the market at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash FTSE
Out of boredom given the lack of volatility in the FTSE I covered my 8380 average short position at my revised 8357 T/P level and I am now flat. The FTSE has resistance from 8430/8500 where I will again be a seller with a 8565 ‘’Closing Stop’’. The FTSE has short-term support from 8200/8260 where I will be a small buyer with a 8145 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 8370. If I am taken long I will have a T/P level at 8310.
Dow Rolling Contract
While media outlets are focussed on Nvidia and its earnings, a key development has gone largely unnoticed. Over the last six trading days, the Dow Jones registered a new high on May 20 at a price of 40,080, but over the same time span, the Dow Jones Transportation Average declined 4%. The DJ Transportation Average did not confirm the Dow Jones new high on Monday, nor did it confirm the Dow Jones new closing high on March 28, nor the Dow Jones closing high all the way back on January 4, 2022. These short, intermediate and long-term non-confirmations are bearish under the Dow Theory and indicate lingering problems with an essential segment of economic activity. Dow Theory is the oldest market indicator in the Dow Averages’ history. Bearish non-confirmations between these two Indexes have attended many of the market’s major tops, two of which were in 2000 and 2007. The 2000 top led to a 39% decline in the Dow Jones while the 2007 top led to a 54% decline. This fractured behaviour extends to other stock Indexes as I have discussed numerous times over the past six months. The Dow, S&P and NASDAQ are at new highs, but the Russell 2000, Value Line Geometric Index, Dow Jones Utilities Averages and various sub-Indexes are not. That these non-confirmations are occurring with stocks at historically overvalued levels places the market in a high-risk position in my opinion. Every piece of bad news is ignored with the latest coming David Solomon from Goldman Sachs who said last night that we will see no Fed rate cuts this year. I am still flat the Dow. I will now lower my sell level to 39850/40100 with a lower 40305 wider ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 39670. I still do not want to be long the Dow at this time.
Cash NASDAQ 100
The NDX traded in a narrow range yesterday before spiking higher overnight on the stock split announcement from Nvidia. With the NDX having rallied almost 11% in just three weeks I just cannot be a buyer of the market at these levels. I am still short at an average rate of 18385. I don’t normally add to a position that is ‘’offside’’ but I will look to sell the NDX again on any further move higher to 18980 with the same no stop policy for now. I will leave my T/P level on this position unchanged 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 leave my 131.20 T/P level unchanged while leaving my 129.85 ‘’Closing Stop’’ at the same price. If any of the Above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold got hit hard yesterday, trading the whole of my buy range for a now 2389 average long position. I will leave my 2369 ‘’Closing Stop’’ unchanged while lowering my T/P level to 2396. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Silver followed Gold yesterday and again overnight. The market traded the whole of my buy range for a now 30.85 average long position. I will leave my 29.75 ‘’Closing Stop’’ unchanged while lowering my T/P level to 31.50. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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