U.S. Equity Markets pushed to fresh record highs again on Wednesday with outperformance in Tech leading the gains. Semiconductors were buoyed by strong TSMC (TSM) sales numbers while Apple (AAPL) caught a bid on reports it is to boost its iPhone 16 shipments. Fed Chair Powell largely stuck to the script again on Wednesday, stressing the Fed needs more good data to be convinced that inflation is returning to target in a sustainable way, while he also repeated that risks to both sides of the mandate have come back into better balance. He also acknowledged the neutral rate has likely moved up a little bit. T-notes were little changed but with a flatter bias. Early trade tracked EGBs higher before paring from peaks into settlement amid Aramco issuance ahead of the 10 Year Auction. The Auction was ultimately stronger than recent averages, but not quite as strong as the stellar June offering. Any upside in T-notes after the auction was pared as eyes turn to CPI on Thursday. Oil prices were bid on Middle East escalation fears and a chunky crude and gasoline stock draw on the weekly DoE inventory report, but distillates saw a notable build. The Dollar was flat with FX focus on the NZD, which underperformed after a dovish RBNZ while Sterling outperformed after hawkish commentary from the Bank of England’s Pill and Mann, adding to the tone of a hawkish Haskel on Monday. Fed Chair Powell largely echoed what was said to the Senate on Tuesday. Nonetheless, on the balance sheet runoff, Powell said they have made a lot of progress but there is still a way to go. He noted it is hard to be precise on the stopping point as the Fed wants a bit of a buffer, noting going slower could allow them to go further. He repeated that the Fed does not want to wait until inflation gets all the way to 2% to ease policy, stressing again Fed wants to have greater confidence, which means more good inflation readings. He did admit he has some confidence in inflation coming down, but he is not yet prepared to say he is sufficiently confident in it returning to target sustainably. The Fed Chair also stressed again that he now sees risks on both sides of the mandate, stressing they have a dual mandate, not just an inflation one. On the neutral rate, Fed Chair Powell said that policy is restrictive, but not intensively restrictive, which suggests the neutral rate is a little higher than before, noting the Fed is unlikely to go back to very low rates of the pre-crisis period. On Basel 3, he said the re-proposal could go out for comment in the fall. Elsewhere, Oil closed higher by 1.13% while after a quiet session Gold ended Wednesday with a small 0.4% gain.
To mark my 3025th issue of TraderNoble Daily Commentary I am offering a special 2-Year Rate of Euro 2750 for my Platinum Service which includes 1 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 lost 209 points yesterday and is now ahead by just 34 points for July after closing June with a gain of 2074 points, 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 to 4 updated emails throughout the trading day to demonstrate this value, a 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 1.02% higher at a price of 5633.
The Dow Jones Industrial Average closed 429 points higher for a 1.09% gain at a price of 39,721.
The NASDAQ 100 closed 1.09% higher at a price of 20,675.
The Stoxx Europe 600 Index closed 0.92% higher.
This Morning, the MSCI Asia Pacific closed 0.3% higher.
This Morning, the Nikkei closed 1.16% higher at a price of 42,316.
Currencies
The Bloomberg Dollar Spot Index closed 0.15% lower.
The Euro closed 0.1% higher at $1.0828.
The British Pound closed 0.3% higher at 1.2841.
The Japanese Yen rose fell 0.1% closing at $161.51.
Bonds
Germany’s 10-year yield closed 2 basis points lower 2.54%.
Britain’s 10-year yield closed 2 basis points lower at 4.14%.
U.S.10 Year Treasury closed 3 basis points lower at 4.28%.
Commodities
West Texas Intermediate crude closed 1.13% higher at $82.33 a barrel.
Gold closed 0.4% higher at $2372 an ounce.
This morning on the Economic Front we already had the release of German Final CPI for May which came in as expected with a +2.2% print. Also released was U.K. GDP which came in at +0.4% versus +0.2% expected. Next, we have the Bank of England Credit Conditions Survey at 9.30 am, followed by U.S. CPI and the latest Weekly Jobless Claims Report at 1.30 pm. Finally, we have a speech from Fed Member Bostic at 4.30 pm and the 30 Year Treasury Auction at 6.00 pm.
Cash S&P 500
There is no stopping the S&P as this key Index made its 37th record high for 2024. The 14 Day RSI closed at 82 last night on yet more negative divergences. In my 37+ years of trading I cannot remember a time when the 14-Day RSI closed at 82. My strategy of selling the S&P on spikes in the RSI above 73 have worked well over the past 18 months. The only time that I have really pressed the downside was when this key technical signal was overbought. However, this strategy has not worked this time as the overall weaker market is beginning to broaden out. The McClellan Oscillator improved to close at +59 last night. This is the strongest reading for the MO in many weeks. Markets are tricky at this time as the small caps are trying to rebound from strong oversold conditions while the mega-Caps are severely overbought and due a major correction. There is no price discovery as the market makes one new high after another on decreasing volume. Five stocks make up 30% of the S&P meaning nobody is diversified even if they think they are. There is no doubt that these type of moves are a freak show which often can lead to calamity especially with the extreme weakening underneath. The VIX closed nearly 3% higher last night. A rising VIX into a rising market is also a warning sign as protection is being sought after. In my opinion this eventually leads to a major sell-off, size to be determined which makes it extremely difficult to be long the market. I am still short (and wrong) the S&P at an average rate of 5550. A weaker than expected CPI could see the S&P spike higher to its next key resistance level at 5675. Today, I will add to this trade on any further move higher to 5670 with a now wider 5705 ‘’Closing Stop’’. I will leave my T/P level unchanged at 5542. If any of the above levels are hit, I will be back with a new update for my Platinum Members. The consensus looks for US CPI to rise 0.1% M/M in June (range of forecasts 0.0-0.2%; prev. 0.0%), while the core rate of CPI is seen rising 0.2% M/M (range: 0.1-0.3%), matching the May reading. The Y/Y expectations are for the headline pace to ease to 3.1% (range: 3.0-3.3%) from 3.3% in May, while the core Y/Y is expected to maintain the May pace of 3.4%, with forecasts ranging between 3.3-3.5%.
EUR/USD
I am still flat. This must be the quietest trading week for both the Euro and Dollar in many years. It is not just the FX markets but almost all asset classes. Ahead of the key CPI Report at 1.30 pm, I will continue to be a buyer of the Euro on any dip lower to 1.0710/1.0780 with the same 1.0645 ‘’Closing Stop’’. I still do not want to be short the Euro at this time. If I am taken long, I will have a T/P level at 1.0830.
Dollar Index
The Dollar traded in just a 15-point range yesterday and I am still flat. The Dollar has resistance from 105.40/106.10 where I will continue to be a seller with the same 106.65 ‘’Closing Stop’’.
Cash DAX
Yet again buyers have bought the DAX driving the market to close to all-time highs. Just like the other markets I am finding it difficult to get an edge in the DAX. Just like last weekend I am going to stay flat the market as there is no point in putting on a trade for the sake of one. If this view changes I will be back with a new update for my Platinum Members.
Cash FTSE
The FTSE continues to ignore the rallies in both the European and U.S. Indexes. Surprisingly the FTSE is getting no post-election bounce. I am still long the FTSE at a price of 8190. Even though the FTSE is trading heavy, I will continue to look to add to this position on any further move lower to 8080. I will have no stop on this position given the massive support below in 7900/8100 area. In this range we have the 2023 highs, the 100 Day Moving Average and close to the .382 fin retracement. Meanwhile, I will leave my 8230 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
The Dow rallied shortly after I posted yesterday morning, and I am still flat. I will now raise my buy level to 39170/39420 with a now higher 38995 tight ‘’Closing Stop’’. I still do not want to be short the Dow at this time. If I am taken long, I will have a T/P level at 39590.
Cash NASDAQ 100
Wrong! Despite the 14 Day RSI closing at an unprecedented 80, I was stopped out of my latest 23390 short position at a price of 20599 and I am still flat. If we get a benign CPI print this afternoon, there every chance that the NDX can rally further. We are seeing no price discovery, making it a ‘’buyers only market’’ at this time despite the overbought charts and weak internals. I did a study of the VIX in years that we have a Presidential Election. With the exception of 2016 when the average VIX was 13.2 the rest of the cycles show a VIX with ranges from 14.6 to 29.3 in 2020. Presently the VIX has a 12 Handle despite this election being more divisive and with more doom narratives from both sides, yet no one cares, or rather markets do not care. Perhaps the simple explanation remains fiscal dominance and factors such as ODTE as added volatility compression factors. The NDX has further resistance from 20720/20870 where I will again be a seller with a higher 21005 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 20560.
September BUND
The Bund continues to build value above last week’s lows albeit by trading in narrow ranges with an upward bias. The Bund has short-term support from 130.00/130.80. I will now raise my buy level to this area with a higher 129.25 ‘’Closing Stop’’. If triggered, I will have a T/P level at 131.35.
Gold Rolling Contract
Gold had a small rally yesterday and I am still flat. Ahead of CPI, I will now raise my buy level to 2326/2342 with a higher 2315 ‘’Closing Stop’’. If triggered, I will have a T/P level at 2355.
Silver Rolling Contract
No Change: I am still flat as Silver as the market continues to trade in narrow daily ranges. Silver has support from 29.50/30.30 where I will continue to be a buyer with the same 28.25 ‘’Closing Stop’’. If triggered, I will have a T/P level at 30.95.
Recent Comments