Risk sentiment took a breather after I posted yesterday morning, without going into reverse. Even so, the AUD took centre stage, trading at the door of 0.77 against the US Dollar, having tested above that figure during the New York trading session, after doing a lot of work in the lower 76’s yesterday. The AUD has now rallied nearly 12% over the past six weeks against the US Dollar.
To mark my 1050th 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 on bryan@tradernoble for details.
For anyone following my Platinum Service it made 125 points yesterday and is now ahead by 1072 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 23,000 points.
Appetite for the AUD has re-emerged again yesterday, thanks to the tailwinds already created this week by strong reports from the NAB Business Survey and yesterday’s Labour Market Report revealing a push back down in the Unemployment Rate. Commodity prices have also been adding to the risk-on move this week, with Iron ore for example pushing through the $60/t on Wednesday although it did close back below this level yesterday, to be still up 8.555% on this time last week.
Meanwhile US equities struggled for direction despite neutral risk sentiment, while the VIX again closed lower. The S&P and Dow basically closed flat having both made new highs for the year shortly after the US Markets opened. Gold closed 1.66% lower while oil prices were a little lower ahead of this weekend’s Doha Oil Producer talks. Yesterday’s release of the IEA’s April Oil Market Report was followed initially by a slight bid tone that was reversed later in the session. The IEA saw little impact on oil supply from a planned production freeze with inventories still rising.
The US Dollar was dealt a little on both sides from US economic reports, with CPI coming in 0.1% lower than expected, but Weekly Jobless Claims printing a very low 253K, equalling the March four week’s low and indicative of still low layoffs. The US Dollar eased for a time before steadying late in the session.
The Bank of England left Interest Rates on hold again – no surprises there – but the Old Lady weighed into the ‘Brexit’ debate with force, warnings on ‘Brexit’ that caught the market’s attention. Sterling was not unduly volatile as a result, with US Dollar trading at 1.4150. The BoE noted that ‘Brexit’ would result in an extended period of uncertainty with significant implications for asset prices, particularly Sterling. We wait further polls of course and the June 23 Referendum.
Overnight China released its latest GDP Report which came in as expected at 6.7% from last month’s 6.8% increase. China also released its latest Industrial which came in very strong at 6.8% versus 5.9% expected. Retail Sales were also better than expected at 10.50%. These strong numbers should underpin the stock market.
This morning on the economic front we have Euro-Zone Trade Balance at 10.00 am. This is followed at 1.30 pm by US Empire Manufacturing and Industrial Production. At 2.15 pm we have Capacity Utilization while at 3.00 pm we have the University of Michigan Consumer Sentiment. Finally just before the New York close at 9.00 pm we have the Total Net TIC Flows.
June S&P 500
The S&P just missed my 2082 sell level with a 2081.50 high print before having a nice 10 Handle sell-off and I am still flat. There is no doubt given the ongoing weakening economic situation which sees lower Real Estate prices across the board that prompted the meeting between Obama and Yellen earlier this week was a panic measure leading to the ECB, BoJ and Fed all buying the stock market in the past few days. I still believe that for this rare meeting to have taken place that there is a potential shock around the corner – whether it is a ‘Black Swan’ event or not – something led the Central Banks to be forced into this aggressive buying. Today I will again look to sell the S&P on any rally higher to 2086/2092 with a 2098 stop, especially with the market trading at the top of its Daily Bollinger Band and Williams Index. My only interest in buying this market is still on a dip lower to 2051/2057 which will close the ‘Open Gap’ from Tuesday/Wednesday with a 2045 stop.
EUR/USD
I am still flat the Euro having gotten stopped out of my latest long position at 1.1260 early yesterday morning. Today I will again look to buy the Euro on any dip lower to 1.1170/1.1210 with a 1.1130 tight stop. Despite the negative price action I do not want to be short the Euro at this time.
June Dollar Index
Thankfully after I posted the Dollar rallied higher to my initial 95.10 sell level before having a nice sell-off shortly after the US Markets opened which enabled me to cover this position at my 94.70 T/P level and I am now flat. Today I will again look to go short on any rally higher to 95.20/95.60 with a 95.90 tight stop.
June DAX
No change as I am still a small seller on any rally higher to 10180/10230 with a 10260 stop. Remember a break and close over 10200 will be at least short-term positive.
June FTSE
I am still flat the FTSE and today I will lower my sell level slightly to 6345/6380 with a 6410 stop. The 6350/6400 is strong resistance and the market should initially have trouble breaking this key level initially. Although with the Central Banks all active in the market – anything is possible as we have seen already this week.
Dow Rolling Contract
My Dow plan worked well with the Dow trading higher to my 17960 sell level with a 17965 high print before having a nice 50 point sell-off to 17910. Given the fact that I had so many ‘open’ positions at the time I emailed my Platinum Members to cut this position too early at 17940 as I had expected the S&P to trade into my sell range which of course did not happen. The only consolation was the Dow immediately dropped after I sent the email. Today I will again look to sell the Dow on any rally higher to 18010/18070 with an 18130 stop. In my opinion the Dow is too near the big round number of 18000 for the market not to at least it before trading lower.
June BUND
My Bund plan also worked well with the market trading lower to my 163.30 buy level with a 163.17 low print before trading higher to 163.65 which enabled me to T/P at 163.55 and I am now flat. There is no doubt the 163 level is huge and today I will again be a small buyer on any further dip lower to 163.80/163.10 with a 163.55 tight stop. I still do not want to be short the Bund at this time.
Gold Rolling Contract
My fear that Gold would trade lower certainly proved to be correct after thankfully exiting our long position at 1243 shortly before I posted yesterday morning. As I was already long Silver, I waited to buy Gold at 1224. As I did not want to be long Gold overnight I emailed my Platinum Members at 10.15 pm last evening to exit this position at 1228 and I am still flat. Gold has strong support from 1190/1200 and today I will be a small buyer in this area with an 1183 tight stop.
Silver Rolling Contract
No change as I am still long Silver at 16.05 from early yesterday morning with the same 15.55 stop.
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