The 3% rally in oil helped propel European and US Indices higher thus reversing the previous three day minor selloff in the Dow with the market closing near its finishing levels from last Wednesday. The small rally in USD/JPY which closed last night over 108.60 was also a contributing factor while the US Dollar which had initially sold off recovered some lost ground to post a minor downside Key Day Reversal having made new highs over 1.1460 earlier in the trading session.
To mark my 1050th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2500 for my Platinum Daily Commentary which includes 1/4 updated emails throughout the trading day. This offer is open to both new and existing members and if anyone is interested please email me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 15 points yesterday and is now ahead by 865 points for April, having made 2265 points in each of the previous two months following a record 3365 points in January. Since I started this service last June it has made over 22,500 points.
Oil rallied after a number of key players came out and said the huge 18 month sell-off in oil was over and that higher prices were ahead. The market focused on this rally while at the same time ignoring the Fed Discount Minutes which showed both the Richmond and Kansas City Fed’s both recommending for a 25 basis point rate hike in the Discount Rate to 1.25% at the last Fed Meeting.
Helping markets was comments from San Francisco Fed President Williams who said the timing of the next Fed Rate hike was not important, while Lacker said the pace of rate hikes was unchanged from that predicted at last December’s FOMC Meeting. Otherwise it was a very quiet trading session for news.
Overnight we have had comments from some Bank of Japan officials that there is a lot more they can do with Monetary Policy to help stabilise prices and this has helped USD/JPY to trade higher to near 109. This in turn sees the Nikkei up over 400 points as I write this commentary and this in turn is helping European Markets this morning.
This morning on the economic front we have the Bank of England’s Credit Condition Survey at 9.00 am. This is followed at 9.30 by Euro-Zone Industrial Production. At 12.00 pm we have US MBA Mortgage Applications. Next we have US Retail Sales and PPI at 1.30 pm and this data certainly has the potential to move the markets. At 3.00 pm the we have the Bank of Canada Rate decision. Finally at 7.00 pm the Fed will release its Beige Book.
June S&P 500
As I was travelling overseas yesterday I was very surprised when eventually I was able to get WIFI to see the huge rally that ensued in both the European and US Indices with the Dow and S&P which had weak closes over the previous three days turn around in some style last night with a + 1% close in both markets. As you know I am not comfortable in being short the markets as you are constantly fighting the Central Banks despite the fact that the markets are seriously overvalued and over-priced. However until this trend changes we are back to the scenario of only shorting the market for a few hours. The rally in the S&P was impressive last evening resulting in the market now only 3% from their all-time high made last May. As I was already short the Dow I emailed my Platinum Members to increase their sell level in the S&P to 2057 and as I did not want to be short overnight especially as USD/JPY rallied I cut this position at 2055 and I am now flat. There is no doubt in my opinion that every time the S&P looks like it will take out a key level to the downside and roll over the market suddenly rallies strongly such as we saw yesterday. Technically the break and close over 2040/2045 is constructive. Today I will move my buy level higher to 2042/2048 with a 2036 stop. Given the turnaround in the McClellan Oscillator last night which closed at +49 having been significantly negative last Monday, I do not want to be short the market at this time unless we rally higher to 2080/2086 over the coming days where I will look to sell with a 2092 tight stop.
EUR/USD
My Euro plan worked well yesterday with the market trading lower to 1.1345 which enabled me to buy the market at an average rate of 1.1375. Give the large sell-off from the morning high at 1.1460 I emailed my Platinum Members to cut this position at 1.1395 and I am now flat. Today I will again look to buy the Euro on any dip lower to 1.1280/1.1310 with a 1.1240 stop. Despite the reversal yesterday I do not want to be short the Euro at this time.
June Dollar Index
The Dollar just missed my 94.50 sell level with a 94.40 high print before trading 50 points lower and I still flat. Today I will raise my sell level slightly to 94.70/95.10 with a 95.40 stop.
June DAX
After I posted yesterday morning the DAX just exploded to the upside with a 200 point rally. Thankfully I had no sell level in the market and I am still flat. Today I will raise my buy level to 9710/9760 with a 9650 stop. Naturally I still do not want to be short the DAX as the price action is still positive. i still believe that it is only a matter of time before we take out the key 10100/10200 major resistance level.
June FTSE
The FTSE also rallied yesterday but not to the same extent as the DA and I am still flat. Today I will raise my buy level to 6160/6190 with a 6125 stop. Just like the other Indices the price action is telling me not to be short the FTSE at this time.
Dow Rolling Contract
As I mentioned in my S&P commentary above I was so surprised by the aggressiveness of the move higher in the Dow yesterday especially when you consider the weak closes over the past three trading days. The eventually traded higher to my 17700 sell level and as I was not comfortable in being short I emailed my Platinum Members to cut their position at 17725 for a small loss and I am now flat. Today I will look to buy the Dow on any dip lower to 17590/17650 with a 17540 tight stop. I will have no sell level for Dow at this time as I want to see if there is any follow through to yesterday’s 1% rally.
June Bund
When the equity markets started to accelerate to the upside after the US markets opened the Bund traded lower to my 163.38 buy level. I am still long and I will now raise my stop to 162.95.
Gold Rolling Contract
I still do not trust this Gold rally and today I will leave my buy level unchanged at 1230/1237 with the same 1223 stop.
Silver Rolling Contract
My pick of the year trade Silver continues to rally. However I am still flat having cut my latest long position on Monday at 15.60. Today I will raise my buy level to 15.60/15.90 with a 15,25 tight stop.
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