Equity Markets on both sides of the Atlantic closed lower as investors worried about the latest reports of fresh outbreaks of the Coronavirus in the U.S and China. Initial Jobless Claims came in worst than expected with a further 1.51 million losing their jobs last week. This brings the total to over 45 million since the U.S Economy was shut down in March. The 67% fall in the share price of German Payments Firm Wirecard AG weighed on both the DAX and the Stoxx Europe 600 Indexes. At its Monthly Meeting, the Bank of England left Interest Rates unchanged at 0.10%. It announced that it would expand its QE Programme by a further £100 Billion. This was less than the market expected and the Pound weakened. Both the DAX and FTSE closed lower by 0.7% and 0.6% respectively. Despite an increase in Covid 19 in China, Germany and the U.S. coupled with the weaker than expected Jobless Claims, the S&P reversed earlier losses to closed unchanged at 3115 on weak volume. Markets rallied into the close on optimistic comments from White House Economic Advisor Larry Kudlow. On a positive note, the Philly Fed’s Business Survey for June was much stronger than expected. Both Treasuries and the US Dollar rallied while Crude reversed yesterday’s loss to close with a gain of 2.3%.Normal trading should resume next week after the June Equity Futures and Options Contracts expire at various times today.
To mark my 2100th 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 made 224 points yesterday and is now ahead by 1894 points for June, having made 2456 points in May, 4773 points in April, an incredible 9264 points in March, 2223 points in February, 2142 points in January and 818 points in December. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Equities
The S&P 500 closed basically unchanged at a price of 3115 on low volume.
The Dow Jones Industrial Average fell 40 points for a 0.13% loss to close at 26,080.
The NASDAQ 100 rose 0.30% to close at 10012.
Stoxx Europe 600 Index fell 0.6%.
The MSCI Asia Pacific Index declined 0.1% to 527.51.
This morning the Nikkei closed 0.55% higher at 22,478.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Euro decreased 0.4% to $1.1204.
The Japanese Yen closed little changed at 107.00 per Dollar.
The British Pound fell 1.1% to 1.2442 per Dollar.
Bonds
The yield on 10-year Treasuries fell three basis points to 0.70%.
Germany’s 10-year yield declined two basis points to -0.41%.
Britain’s 10-year yield closed three basis points higher at 0.24%.
Commodities
West Texas Intermediate crude rose 2.3%% to $38.85 a barrel.
Gold closed unchanged at $1724.
This morning on the Economic Front we already had the release of UK GFK Consumer Confidence for June which came in at -30 versus -36 last month. The Public Sector Borrowing Requirement was also released at £54.5 billion versus £49.3 billion expected. German PPI was released at 7.00 am coming in at -0.4% versus -0.3% expected. The only other data of note to be released on either side of the Atlantic is Euro-Zone Current Account at 9.00 am. However this afternoon we have speeches from Fed Member Quarles at 5.00 pm ahead of Fed Chairman Powell at 6.00 pm.
September S&P 500
When I ran the Off-Balance – Sheet Desk in Banque National de Paris in Dublin back in the early 90s, I was brought up on the mantra that never fight the Central Banks. They may loose a few battles but they will always win the war. This could not be more true given the actions taken by all Central Banks and especially the Fed over the past 10 weeks. I am amazed to see the level of key Wall Street Hedge Fund Managers who are now short the US Indices given the extended valuations but as we saw last Monday when the S&P had fallen 10% in 72 hours, the Fed reacted by buying Corporate Bonds and 2/3 thirds of these losses have now been recovered. However, the rare Island Reversals in both the Dow and S&P have to be broken before we can say that we are out of the woods technically. For this to happen the S&P needs to break and close over 3200. Today is Quadruple Expiration for the June Contracts with the June S&P expiring at 2.35 pm and the Options at 9.00 pm. This is the 17th of the last 21 Quarters that have seen big rallies into expiration. The real test of this market will come on Monday when we have the June Contracts expired. Yesterday my S&P plan worked well with the market trading lower to my 3085 buy level before rallying to my revised 3094 T/P level and I am still flat. This morning we are higher at 3115. I will continue to be a buyer on any dip lower to 3080/3095 with a 3069 stop. My only interest in selling the S&P is still on a rally higher to 3155/3170 with the same 3183 stop.
EUR/USD
My Euro plan worked well with the market trading lower to my 1.1190 buy level before bouncing to trade higher at 1.1220 this morning. I covered this position at my revised 1.1204 T/P level and I am still flat. Today I will again look to buy the Euro from 1.1150/1.1190 with the same 1.1105 stop. Meanwhile, I will leave my 1.1380/1.1420 sell level unchanged with the same 1.1455 tight stop.
September Dollar Index
The Dollar rallied to my 97.40 sell level. I am still short and I will now raise my T/P level to 97.15 with a now lower 97.85 stop.
September DAX
After the DAX traded lower to my 12190 buy level I had too much risk on board at that time and I covered this position at my revised 12220 T/P level and I am still flat. If you did hold on to this position then that worked well as the market is now trading at 12335. The June Contract expires this morning, so it will be interesting to see how the September Contract reacts later today. Ahead of the weekend I still do not want to be short the market. I will be a small buyer from 12170/12240 with a 12095 stop.
September FTSE
I am still flat the FTSE and today I will raise my buy level to 6090/6150 with a 6045 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
After the Dow traded lower to my 25900 buy level, I covered this position too early at 25990 and I am still flat. This morning the Dow is trading higher at 26200. I will continue to be a small seller from 26650/26850 with the same 27010 stop. To negate last weeks Island Reversal the Dow needs to break and close over 27000. The Dow has support from 25780/25980 where I will be a buyer with a 25645 stop.
September NASDAQ
This morning the NASDAQ has rallied to my 10070 initial sell level with a high so far at 10074. I am still short and I will now raise my T/P level on this position to 10040. I will continue to add to this trade at 10200. I will also leave my stop unchanged at 10275. If any of the above levels are hit I will be back with a new update for my Platinum Members.
September BUND
I am still flat and today I will again raise my buy level slightly to 174.65/175.05 with a higher 174.20 stop.
Gold Rolling Contract
For the third consecutive trading session, Gold closed unchanged. I will now raise my buy level slightly to 1690/1700 with a higher 1681 stop.
Silver Rolling Contract
Silver just missed my 17.10 buy level with a 17.17 low print before having a small rally. Given how high the DSI is I will not chase this market and I will leave my 16.70/17.10 buy level unchanged with the same 16.35 stop.
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