Both the NASDAQ 100 and S&P 500 closed at new all-time highs last night while the Russell 2000 and Dow Jones closed lower. The NASDAQ outperformed helped by the 7% gain in Apple Shares following an upgrade from DA Davidson in the wake of the WWDC event on Monday. Meanwhile, morning weakness around French election uncertainty had unwound once Europe had left for the day while a slump in US Treasury Yields took US indices to session highs. Treasuries were bid across the curve with notable upside seen after the stellar 10 Year Auction which saw a 2bp stop through and a jump in indirect demand. The Euro continued to underperform in FX on political uncertainties while moves elsewhere were rather contained with all eyes turning to key risk events on Wednesday; Fed and CPI. Crude prices saw marginal gains on Wednesday while OPEC left world oil demand forecasts unchanged but the EIA raised forecasts for both 2024 and 2025, with attention after hours on private inventory data. The Fed is widely expected to leave rates on hold at 5.25-5.50%, the statement will likely also largely be reiterated after slight tweaks in the May statement. Attention will lie on the Summary of Economic projections, or Dot Plots. After a string of hot inflation reports in Q1, the Fed has been stressing that the luxury of a strong economy gives the Fed time to be patient before acting, and the hot NFP released last week only gives the Fed more time. Therefore, it is likely the 2024 median FFR will be revised up from the 4.6% pencilled in at the March meeting. Money markets currently look for between one or two rate cuts this year, with Wall Street Journal’s Timiraos highlighting that “Most sell-side economists and other professional Fed watchers now anticipate one or two rate cuts this year in either September or December”. It is worth noting that the May US CPI report will be released on the morning of the FOMC, which could impact expectations of the dot plot going into the rate decision. Fed Chair Powell has previously said that the Fed is allowed and encouraged to update their forecasts until late morning of the meeting, therefore the data will likely be incorporated into the Fed’s decision-making and forecasts. Headline CPI is expected to rise just 0.1% in May, down from 0.3% in April, with the range of analyst forecasts between just 0.1-0.2%. The Y/Y is expected to maintain the prior month’s pace at 3.4%, with forecasts between 3.3-3.5%. The core metrics are expected to see the M/M match April’s 0.3% pace, with analyst forecasts ranging between 0.1-0.3%. The Y/Y is expected at 3.5%, down from the 3.6% in April, with forecasts between 3.4-3.6%. Elsewhere, Oil closed 0.3% higher while Gold ended flat on Tuesday after a quiet trading session.
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For anyone following my Platinum Service it made 255 points yesterday and is now ahead by 908 points for June, having made 1843 points in May. The Platinum Service made 4010 points in 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 0.27% higher at a price of 5375.
The Dow Jones Industrial Average closed 120 points lower for a 0.31% loss at a price of 38,747.
The NASDAQ 100 closed 0.71% higher at a price of 19,210.
The Stoxx Europe 600 Index closed 0.93% lower.
This Morning, the MSCI Asia Pacific closed 0.3% higher.
This Morning, the Nikkei closed 0.66% lower at a price of 38,876.
Currencies
The Bloomberg Dollar Spot Index closed 0.15% higher.
The Euro closed 0.2% lower at $1.0740.
The British Pound closed 0.1% higher at 1.2741.
The Japanese Yen fell 0.1% closing at $157.12.
Bonds
Germany’s 10-year yield closed 5 basis points lower at 2.63%.
Britain’s 10-year yield closed 6 basis points lower at 4.28%.
U.S.10 Year Treasury closed 7 basis points lower at 4.40%.
Commodities
West Texas Intermediate crude closed 0.3% higher at $77.97 a barrel.
Gold closed 0.1% higher at $2312 an ounce.
This morning on the Economic Front we already had the release of U.K. April GDP which came in at 0.00% versus 0.00% expected. Final German CPI for May was also released coming in as expected at +2.4% Y/Y. Next, we have a speech from ECB Member Schnabel at 10.30 am followed by U.S. MBA Mortgage Applications at 12.00 pm. At 1.30 pm we have CPI. Finally, we have the FOMC Statement at 7.00 pm and the Powell Press Conference at 7.30 pm.
Cash S&P 500
Nothing feels comfortable here heading into this afternoon’s CPI and FOMC Statement at 7.00 pm. In a normal market environment, I would be screaming a massive correction: Negative divergences abounding, tightening pattern, extremely low volumes and extreme high concentration of valuations and virtually no volatility. Yet the S&P closed at a new all-time high last night and is making new highs this morning, trading at a price of 5382 as I go to press. Breadth is horrible as shown by the McClellan Oscillator which weakened to close at -114 last night. This should not be happening when both the NDX and S&P make new highs. Any sell-off that we are witnessing during the day is scary as everyone is wondering is this the start of the correction. Take the Dow for example which was down over 400 points and one stage before a late rally saw the Dow erase most of these losses into the close. A much better than expected 10-Year Treasury Auction was the catalyst for the late rally. Today is going to be a binary session. A lower-than-expected CPI print and the S&P make further new highs while a higher CPI print will see a sell-off. Any sell-off on a higher CPI print will be bought ahead of the next binary event namely the Powell Press Conference at 7.30 pm. Yesterday my S&P plan worked well as the market sold off to my 5333-buy level before rallying to my revised 5345 T/P level and I am now flat. I know I exited this position early but from where I sit the idea is to keep banking points with minimal risk. The S&P is now extremely close to my 5400-target level. I will now raise my sell level to 5399/5415 with a wider and higher 5431 ‘’Closing Stop’’. My only interest I buying the S&P is on a dip lower to 5330/5346 with a higher 5315 ‘’Closing Stop’’.
EUR/USD
I am still long the Euro from early Monday morning at a price of 1.0785. I will add to this position at 1.0705 while lowering my ‘’Closing Stop’’ to a price of 1.0655. I will now lower my T/P level to 1.0830. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
This morning, the Dollar is trading a few points higher at 105.30. I am still flat Today; I will now raise my Dollar buy level to 104.00/104.70 with a higher 103.35 ‘’Closing Stop’’.
Cash DAX
My DAX plan worked well as the market traded the whole of my buy range for an 18350 average long position. Subsequently, we rallied to my revised 18390 T/P level and I am now flat. Today, I will again be a buyer of the DAX on any further move lower to 18200/18290 with a lower and wider 18095 ‘’Closing Stop’’.
Cash FTSE
Yesterday the FTSE traded the whole of my buy range for a 8155 average long position before rallying this morning to my revised 8180 T/P level and I am now flat. Today, I will again be a buyer of the FTSE on any dip lower to 8070/8140 with a lower 8025 tight ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 8210. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
My Dow plan worked well but not for me. After the Dow hit my 38620 buy level we just missed my second buy level at 38430 by three points before rallying to sit at 38800 this morning. I did not like yesterday’s price action and I emailed my Platinum Members to exit any long position at 38665 and I am still flat. Ahead of today’s double binary event, my only interest in buying the Dow is on a large move lower to 38250/38500 with a lower 38095 ‘’Closing Stop’’. Despite the heavy price action in the Dow, I still do not want to be short the market at this time.
Cash NASDAQ 100
A late 7% rally in Apple shares helped the NDX to close at new all-time highs. The 250-point rally off the afternoon lows saw the NDX hot my sell level for a now 19210 short position. I am still short, and I will add to this trade on any further move higher to 19370 with a higher 19505 ‘’Closing Stop’’. I will now raise my T/P level to 19110. If any of the above levels are hit, I will be back with anew update for my Platinum Members.
March BUND
Much better-than-expected U.S. 10-Year Treasury Auction saw the Bund rally off its 129.60 morning lows. As I want to be flat where possible ahead of today’s key events, I exited my 130.05 average long Bund position at my revised 130.30 T/P level. The Bund has strong support below from 128.80/129.60 where I will again be a strong buyer with a lower and wider 127.95 ‘’Closing Stop’’. I still do not want to be short the Bund at this time.
Gold Rolling Contract
Gold traded in a narrow range again yesterday and I am still flat. Ahead of this afternoon’s key CPI and FOMC Statement this evening I will not chase the price of Gold higher. Therefore, I will continue to be a buyer on any dip lower to 2272/2288 with the same 2259 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2302.
Silver Rolling Contract
No Change: I am still long Silver from last week at a price of 29.80. I will continue to look to add to this position at 29.00 while leaving my 28.35 ‘’Closing Stop’’ unchanged. Meanwhile, I will leave my 30.40 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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