The US Dollar has continued its ascendancy with the US Dollar Index closing up for a fifth day in a row since it made its 91.80 low print last Monday. Meanwhile European and US equity markets treaded water fluctuating between small losses and gains. Energy and Industrial shares closed lower weighed down by lower oil prices while health care stocks posted gains on the back of better than expected earnings reports.
To mark my 1075th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2500 for my Platinum Service 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 112 points yesterday and is now ahead by 307 points for May having made 2175 points in April. The previous two months saw the same gain of 2265 points in each month following a record 3365 points gain in January. Since I started this service last June it has made over 24,000 points.
Reports that wildfires in Canada had moved away from key oil producing areas was cited as the major driver for the decline in oil prices. Other articles also suggested that Saudi Arabia’s new Oil Minister was also a factor as the new appointment will not lead to a cut in oil production. Metal and bulk commodities also had a bad day dragged lower by concerns over China’s economic prospects following disappointing trade figures over the weekend. Copper lost 2.2% while Iron ore prices fell a hefty 5.5%. The decline in Iron ore was also not helped by an article from the Dalian Exchange that it will introduce different transaction fees in order to strengthen market oversight and limit frequent short-term trading.
So given the backdrop of a stronger US Dollar and softer commodities, it is not surprising to see the NZD, AUD and CAD amongst the US Dollar. The strength in the Dollar appears to have been driven by a reversal in positioning. The US Dollar was heavily oversold in March and April and the bounce off a key technical level last week appears to have triggered an unwinding of these positions. The AUD/USD traded below 0.73 overnight but has rebounded off this low to trade at 0.7340 currently. For anyone who trades the AUD a break and close below 0.73 could well herald a retest of the 70 cent mark.
Looking at other currencies, the USD/JPY gained 1.3% on no new news and that rally has continued overnight with USD/JPY testing the 109 level. Remember it was only a week ago that we were trading at 105.50. The Nikkei had a strong session closing up 2.15% at 16,565 and this is helping European markets at the open this morning.
In other news, Fed Member Kashkari was on the wires noting that a June Fed hike was possible and that the US Dollar is an important factor in Fed analysis.
This morning on the economic front we already had the release of German Industrial Production. This number again disappointed with a -1.3% print versus -0.2% expected while the German Trade balance came in a lot stronger than expected at EUR26.0bn. At 9.30 am we have the US Trade Balance and this is followed at 11.00 am by the US NFIB Small Business Optimism. Finally at 3.00 pm we have Wholesale Inventories and the JOLTS Job Openings.
June S&P 500
My S&P plan worked very well as shortly after the US Markets opened the S&P traded lower to my 2050 buy level before having a nice rally which enabled me to cover this position at my 2056 T/P level and I am now flat. This rally has continued overnight with the S&P trading at 2064 on the back of the 2.15% rally in the Nikkei and the firmer European markets on the open. Again I cannot emphasise how important the Daily Bollinger Band and Williams Index are in relation to putting on a trade as last Thursday/Friday these indicators were telling you not to be short the market despite the worsening economic situation. Today I will look to buy the S&P on any dip lower to 2052/2057 with a 2046 stop which is just below yesterday’s low print. My only interest in selling the S&P is on a rally to 2078/2084 with a 2089 stop.
EUR/USD
The Euro traded in a very narrow range yesterday and I am still flat. Today I will leave my buy level unchanged at 1.1310/1.1350 with the same 1.1275 stop. Despite the negative price action for the Euro since we hit a 1.1620 high print last Monday I still do not want to be short the Euro at this time.
June Dollar Index
I am still flat the Dollar which just missed my 94.40 sell level with a 94.28 high print. Today I will leave my sell level unchanged at 94.40/94.70 with the same 95.10 stop. I will also leave my buy level unchanged at 92.90/93.30 with the same 92.55 stop.
June DAX
Unfortunately just as I posted yesterday the DAX spiked to the upside as yet again the key 9800 area has held this market. Thankfully we had no sell levels yesterday and today I will now raise my buy level to 9930/9970 with a 9875 stop. I still do not want to be short the DAX at this time especially if the Euro falls further as this will put a further bid in the DAX market.
June FTSE
My FTSE plan worked well with the FTSE hitting my 6075 buy level yesterday afternoon. Finally early this morning the FTSE has followed the other markets higher which has enabled me to cover this position at my revised 6107 T/P level as outlined earlier to my Platinum Members and I am now flat. The FTSE is now trading higher but is continuing to be weighed down by Bank stocks and Mining stocks which had a very bad trading session yesterday. Today I will again look to buy the market on any dip lower to 6075/6105 with a tight 6045 stop. Despite the negative price action I still do not want to be short the market at this time.
Dow Rolling Contract
I was very unlucky with my Dow call yesterday as the market made a low at 17662 just missing my 17650 buy level which is frustrating when you see the Dow trading over 17800 this morning. Today I will raise my buy level to 17660/17720 with a 17610 tight stop. This move higher since last Friday’s post NFP low at 17540 again proves how effective both the Daily Bollinger Band and Williams Index are as technical signals.
June BUND
No change as the Bund continues to build value over the key 163.50 pivot point. Today I will raise my buy level slightly to 163.30/163.60 with a higher 163.05 stop.
Gold Rolling Contract
My Gold plan worked well yesterday with as expected Gold trading lower to 1258 before having a small rally this morning to a 1267.50 high print so far. As most members know at this stage I prefer to be long Silver rather than Gold as the market is less volatile while the points on the Gold market that the spread betting firms use can really distort your P&L on a particular day. After Gold traded lower to my 1263 buy level yesterday I emailed all my Platinum Members to exit this position at 1265 as I was already long Silver and I did not want double risk on board at that time and I am now flat. Today my only interest in buying Gold is on a dip lower to 1250/1258 with a 1243 stop.
Silver Rolling Contract
Shortly after lunch Silver traded lower to my 17.00 buy level with a 16.86 low print. I am still long and today I will now move my stop higher to 16.55.
Recent Comments