The party continues as yet again morning dips were aggressively bought across the board. The Dow led yesterday’s gains closing higher by 1.26% following a 600-point rally off its 33855 low print. Yet the VIX also closed higher making the rally even harder to fathom. After 15 months of consecutive interest rate hikes, Federal Reserve officials decided to pause at their recent meeting. However, they indicated that they are likely to resume tightening measures in the future to address concerns about inflation. In a statement released by the Federal Open Market Committee, they mentioned that keeping the target range steady during this meeting allows them to evaluate additional information and its impact on monetary policy. The U.S. Federal Reserve is scheduled to release the results of its annual stress tests on June 28. These tests assess the ability of banks to withstand various crises and challenging scenarios. This year’s exams have gained significant attention, given that three U.S. banks have failed since March, raising concerns about the resilience of other institutions in the face of extreme stress. The stress tests were implemented after the 2008 financial crisis to ensure the stability and strength of the US banking system during tumultuous periods. The Biden administration is preparing to establish a framework that would allow large companies to purchase tax credits related to clean energy, thereby creating a new market that aligns with the goals of last year’s climate law. This system aims to attract additional funding for projects involved in generating renewable energy from sources such as wind, solar power, clean hydrogen, and batteries, among others. The Biden administration believes that utilising tax credits to increase the number of investors in clean energy projects is a crucial step toward achieving the United States’ emissions-reductions targets. European Markets closed higher despite the European Central Bank (“ECB”) announcing its latest 25- basis point rate hike. In her press conference following the rate increase ECB President said it was likely we will see another 25-basis point increase in July. This will happen against a background of a slowing economy. This would bring the total tightening since July of the previous year to 425 basis points. In Asia, China’s economic recovery showed signs of weakening in May, with a slowdown in growth observed in both industrial output and retail sales. To stimulate the economy, the People’s Bank of China recently lowered the interest rate on its one-year policy loans by 10 basis points to 2.65%. The country’s economy is facing several challenges, including low business and consumer confidence, a sluggish property market, and a decline in global demand for exports. Elsewhere, Oil closed 3.38% higher while after a volatile session, Gold reversed earlier losses to close higher by 1%
To mark my 2800th issue of TraderNoble Daily Commentary I am offering a special 2-Year Rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day to demonstrate this value, a 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 245 points yesterday and is now ahead by 795 points for June. 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 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and 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 1.22% higher at a price of 4425.
The Dow Jones Industrial Average closed 428 points higher for a 1.26% gain at a price of 34,408.
The NASDAQ 100 closed 1.20% higher at a price of 15,185.
The Stoxx Europe 600 Index closed 0.12% lower.
Yesterday, the MSCI Asia Pacific closed 0.6% higher.
Yesterday, the Nikkei closed 0.05% lower at a price of 33,485.
Currencies
The Bloomberg Dollar Spot Index closed 1% lower.
The Euro closed 0.9% higher at $1.0946.
The British Pound closed 1% higher at 1.2785.
The Japanese Yen fell 0.1% closing at $140.25.
Bonds
Germany’s 10-year yield closed 3 basis points higher at 2.50%.
Britain’s 10-year yield closed 1 basis points lower at 4.39%.
U.S.10 Year Treasury closed 9 basis points lower at 3.71%.
Commodities
West Texas Intermediate crude closed 3.38% higher at $70.62 a barrel.
Gold closed 1% higher at $1957.10 an ounce.
This morning on the Economic Front the Fed’s Bullard is speaking at 8.00 am. Next, we have U.K. Consumer Inflation Expectations at 9.30 am and Euro-Zone CPI at 10.00 am. Next, we have Euro-Zone Trade Balance at 10.00 am. This is followed by a speech from Fed Member Waller at 12.45 pm. Finally, at 3.00 pm we have the University of Michigan Consumer Sentiment Index at 3.00 pm.
Cash S&P 500
There are times in markets when you are wrong. In my experience it is always when markets go wild to the upside as they seem to defy all reason, discipline and measures. Did I anticipate this level of mania in 2023? Absolutely not. The reckless piling into tech stocks irrespective of anything but a narrative? No. However even I have to respect the extraordinary strength. For example, Tesla has gained 45% in 15 trading days resulting in the 14-Day RSI at 88. We are witnessing berserk melt ups in the highest market cap stocks on the planet. Remember at some point these market caps have to be backed up by earnings. Even with very generous forecast estimates you are seeing very expensive stocks getting ever more expensive every day. The fact is a lot of forward perfection has been priced into these 10 stocks in a matter of weeks. The ECB raised rates by 25 basis points and the Dollar tanked while European Equity Markets soared despite rising bond yields. The Fear & Greed Index has now reached 82 (Extreme Fear). This is the level reached in February before the market fell hard. The 14-Day RSI for the S&P is at 77 and the NDX at 79. You can only be a seller against this background no matter what the news wires say in my opinion. The net result of an 8-hour rally with no two-way price action or price discovery is I am now short at an average rate of 4300 with no stop or T/P level for now. Once we get the June Expiration out of the way I will have a stop and profit target. If this changes I will come back with an update for my Platinum Members.
EUR/USD
The Euro surged yesterday and I am still flat as thankfully we had no sell level in the market. The Euro has resistance from 1.1020/1.1100 where I will be a small seller with a 1.1155 ‘’Closing Stop’’. I do not want to be long the Euro at this time.
June Dollar Index
The Dollar fell 1% yesterday and I am still flat. The Dollar is oversold, trading at 102.15 as I go to press. The Dollar has short-term support from 101.00/101.60 where I will be a buyer with a 100.45 ‘’Closing Stop’’.
Cash DAX
No Change. I am still flat the DAX. The DAX is trading close to all-time highs despite the latest 25 basis point rate rise by the ECB and the hawkish press conference. I will stay flat until I feel I have a better edge. I am short both the S&P and NDX which is enough skin in the game for now.
Cash FTSE
The FTSE continues to trade heavy, and I am still flat. The FTSE has strong support from 7500/7570. I will now raise my buy level to this area with a higher 7445 ‘’Closing Stop’’.
Dow Rolling Contract
Frustratingly, the Dow missed my initial 33800 buy level with a 33855 low print before rallying a huge 600 points off this low. I will now raise my buy level to 33900/34150 with a tight 33795 ‘’Closing Stop’’.
Cash NASDAQ 100
In my opinion the Fed has zero credibility. Nobody believes them. The Committee seems to be so far removed from market reality it is embarrassing. How can you have a hawkish statement only to be qualified by Fed Chair Powell would somehow tame this incredible beast of a market. This is the very beast that they have soaked with market liquidity. There is no chance of core inflation falling with the onset of the next liquidity bubble. Today, and for the next two weeks we have to listen to the dribble from the Fed speakers, the very ones that were trying to play hardball only to cave in with the bank failures. I exited my 14955 short NDX position at 15200. At the same time I emailed my Platinum Members to go short at this level again with no stop or T/P level. Vertical Markets always end badly. I will be back with a new update for my Platinum Members following today’s June Expiration.
September BUND
No Change. I am still long at an average rate of 133.35 with the same 133.75 T/P level and 132.35 ‘’Closing Stop’’. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
I am still flat as Gold missed yesterday’s buy level with a 1925 low before rallying $35 into the New York close. I will now raise my buy level to 1915/1930 with a higher 1899 ‘’Closing Stop’’.
Silver Rolling Contract
Unfortunately, Silver missed my 23.20 second buy level by one point before following Gold higher on the weaker Dollar. I am still long at 23.93 and I will continue to look to add to this position at 23.20 with no stop. I will now raise my T/P level on this position to 24.90.
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