U.S. Equity Markets got crushed yesterday led by the 4% fall in the NASDAQ 100 after the Swiss National Bank announced a surprise 50 basis point rate hike while exiting some of its large holdings of American Equities. The U.S. Department of Labour reported that another 229,000 individuals filed Initial Jobless Claims in the week ending June 4. This figure was lower than last week’s upwardly revised 232,000 and Wall Street’s estimated 217,000. This could indicate that while job openings remain near record highs, hiring could be starting to slow – potentially resulting in a broader deceleration in economic activity. And if this trend were to continue, it could help to reduce wage-driven inflationary pressures. But if Jobless Claims remain below 2019’s average, it may signal further supply-and-demand imbalances in the labour market. Within the S&P 500, all 11 sectors finished lower. European Markets closed lower. The European Central Bank said it will introduce new monetary-policy tools to help stabilise rising sovereign bond yields. Italy’s final Consumer Price Index data for May was in line with the initial reading, driven by energy, transportation, and food costs. Euro-Zone’s first-quarter labour-cost growth rose compared with the fourth quarter, hitting its highest level since early 2020. The Bank of England raised its interest rates by 0.25% while lowering its economic growth outlook, saying it’s increasingly worried about the pace of inflation expansion. In Asia, The Melbourne Institute’s Index of Consumer Inflation expectations hit its highest level since 2008 as individuals worry wage gains won’t keep up with rising costs. Japanese Prime Minister Fumio Kishida said the government will continue with its wage and investment support while endorsing the Bank of Japan’s policy efforts to stoke inflation. The Chinese National Bureau of Statistics’ new home-price data for May showed costs fell at a slower rate than in April, following a rebound in Guangzhou and Shenzhen. The Japanese Ministry of Finance’s import-growth figures for May hit their highest level on record, as a weaker yen boosted the cost of oil and coal shipments. Elsewhere, Oil rose 1.5% on continued market volatility while Gold gained 1.16% on further Dollar weakness.
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For anyone following my Platinum Service it made 292 points yesterday and is now ahead by 2886 points for June after making 3651 points in May, having made 762 points in April, following a gain of 5883 points in March. The Platinum Service made an impressive 5324 points in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 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 3.36% lower at a price of 3668.
The Dow Jones Industrial Average closed 741 points lower for a 2.42% loss at a price of 29.927.
The NASDAQ 100 closed 4.02% lower at a price of 11,127.
The Stoxx Europe 600 Index closed 2.2% lower.
This morning, the MSCI Asia Pacific Index fell 1.1%.
This morning, the Nikkei closed 1.77% lower at a price of 25,963
Currencies
The Bloomberg Dollar Spot Index closed 1.1% lower.
The Euro closed 1.2% higher at $1.0564.
The British Pound closed 1.3% higher at 1.2296.
The Japanese Yen rose 0.4% closing at $133.82.
Bonds
Germany’s 10-year yield closed seven basis points higher at 1.71%.
Britain’s 10-year yield closed five basis points higher at 2.52%.
US 10 Year Treasury closed six basis points lower at 3.25%.
Commodities
West Texas Intermediate crude closed 1.5% higher at $117.33 a barrel.
Gold closed 1.16% higher at $1848.10 an ounce.
This morning on the Economic Front we have Euro-Zone CPI at 10.00 am, followed by Bank of England Quarterly Bulletin at 12.00 pm. Next, we have a speech from Fed Chair Powell at 1.45 pm. Finally, we have U.S. Industrial Production and Capacity Utilisation at 2.15 pm.
Cash S&P 500
Shortly after I posted yesterday morning the Swiss National Bank announced a surprise 50 basis point rate rise while at the same time announcing it was reducing its extremely large holdings of U.S. Stocks. This led to a new low in the S&P for the year as the market ended the day with a hefty 3.36% loss. Unless something dramatic happens this evening the S&P will have now closed lower for 10 of the past 11 weeks which has never happened before. I am encouraged that despite the aggressive sell-off, the Dollar which you would have expected to rally, instead fell over 1% while 10-yesr Treasuries are now trading 25 basis points lower since the Fed announced its 0.75% rate hike. Every signal that I follow is telling me not to be short while the McClellan Oscillator got hit hard yesterday, closing at -242 which is another reason to be a buyer. The ‘’Fear & Greed’’ Index closed lower at 13 which is extremely oversold. Yesterday the S&P traded the whole of my second buy level for a 3701 long position. I am still long with a now lower 3725 T/P level. I will leave my 3669 ‘’Closing Stop’’ unchanged. I am expecting plenty of two-way volatility today while don’t forget Powell is speaking at 1.45 pm. I am still long from last Friday at 3985 and given the points made this week, I will now lower my exit level on this position to 3935.
EUR/USD
My Euro plan worked well with the market trading lower to my 1.0370 buy level before rallying to my too tight 104.15 T/P level and I am now flat. The Euro rallied to a high of 1.06 before selling off overnight and is now trading at 1.0500. The Euro has support from 1.0430/1.0480 where I will again be a buyer with a 1.0375 stop.
March Dollar Index
My Dollar plan worked well with the market rallying to my 105.20 sell level before selling off to my 104.80 T/P level and I am now flat. This morning the Dollar is trading lower at 1.0420. We have resistance from 104.70/105.30 where I will again be a seller with a 105.75 stop.
Cash DAX
The DAX got crushed yesterday, trading the whole of my buy range for a 13150 average long position. Given the insane volatility in the Bund, I no longer wanted to be long the DAX and I emailed my Platinum Members to exit any long position at 13160 and I am still flat. This morning, the DAX is trading lower at 13050. We have support from 12830/12930 where I will be an aggressive buyer with a 12695 wider stop.
Cash FTSE
My FTSE plan did not work well. I bought the market at an average rate of 7135, before getting stopped out of this trade at 7045 and I am still flat. I am still flat. The FTSE has support before from 6900/6960 where I will be a strong buyer with a wider 6835 stop.
Dow Rolling Contract
The volatility in the Dow is not for the faint hearted with plenty of two- way price action. In contrast to the other Indexes my Dow plan has worked well over the past few weeks. Yesterday after the Dow traded lower to my 30100 buy level we rallied to my 30227 revised T/P level before emailing my Platinum Members to buy the Dow again at 29900. This morning we exited this position at 30055 and are now flat. The Dow is severely oversold. We have support from 29550/29850 where I will again be a buyer with a 29375 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 30180.
Cash NASDAQ 100
The NDX led the decline yesterday with a 4% loss, bringing the loss for the year to a whopping 36%. The Swiss National Bank are big holders of Tech stocks and their selling certainly drove the market lower. Monday is a holiday in the States making holding any positions over the weekend very uncomfortable given the back drop. Yesterday after the NDX hit my 11280 buy level we rallied to my revised 11370 T/P level. Subsequently, the market got hit for a further 300 points. This morning the NDX is trading at 11235. We have strong support from 10750/10950 where I will be an aggressive buyer with a 10495 wider stop. If I am taken long I will have a T/P level at 11210. Meanwhile I will leave my 14327 long position unchanged with the same 13400 exit level
September BUND
I have never seen such volatility in the Bund with the market trading in a 450 point range yesterday. The Emergency Meeting by the ECB on Wednesday has done nothing to calm the bond markets which is a massive worry for the ECB given the amount of bonds that they own. They are sitting on massive losses but of course will not be held accountable. I have lost all edge in the Bund and after losing a further 85 points yesterday in the Bund I am going to stay flat until this market calms down.
Gold Rolling Contract
Gold just missed my 1812 buy level with a 1815 low print before rallying $40 and I am still flat. I will now raise my buy level to 1810/1825 with a higher 1799 ‘’Closing Stop’’.
Silver Rolling Contract
I am still flat. I will now raise my buy level to 21.00/21.60 with a higher 20.35 stop.
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