U.S. Equity Markets finished yesterday’s session higher, led by the 2.18% gain in the NASDAQ 100. This move higher saw the VIX fall a further 2.5%, closing at a price of 26.08. Yesterday’s gains were driven by employment-related data. The Department of Labour’s Weekly Jobless-Claims figures showed unemployment is on the rise. In addition, numbers from executive-outplacement firm Challenger, Gray & Christmas indicated job cuts are up 59% compared with a year ago. All of that is important from a Federal Reserve policy perspective. The central bank has said it will keep raising interest rates until the labour supply-and-demand picture comes back into balance. When that change takes place it can lower aggressive interest rate hikes. Yesterday’s economic numbers lean in that direction. Within the S&P 500, 10 of the 11 sectors finished higher. European Markets closed higher. German Industrial Production figures for May were stronger than expected, driven by strength in manufacturing and construction activity. Signs of health for the region’s largest economy should bode well for the rest of the European Union. French Finance Minister Bruno Le Maire said the European Union must reconsider its debt rules, boosting the outlook for more fiscal spending. In Asia, China’s Ministry of Finance considered allowing local governments to raise $220 billion in bond sales later this year. The money would be used to invest in infrastructure projects and support economic growth. Boosting regional growth sentiment were trade figures from Australia. The Australian Bureau of Statistics reported export growth for May was stronger than anticipated as shipments to China, Japan, and South Korea rose. Early this morning, former Japanese Prime Minister Abe was shot while giving a campaign speech. Elsewhere, Oil rebounded, closing higher by 3.86% while Gold closed 0.17% lower.
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For anyone following my Platinum Service it was flat yesterday and is still ahead by 222 points for July after closing June with a gain of 3371 points June, while 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 1.5% higher at a price of 3902.
The Dow Jones Industrial Average closed 346 points higher for a 1.12% gain at a price of 31,384.
The NASDAQ 100 closed 2.16% higher at a price of 12,109.
The Stoxx Europe 600 Index closed 2.1% higher.
This morning, the MSCI Asia Pacific Index rose 0.7%.
This morning, the Nikkei closed 0.35% higher at a price of 26,582.
Currencies
The Bloomberg Dollar Spot Index closed 0.1% higher.
The Euro closed 0.2% lower at $1.0170.
The British Pound closed 0.5% higher at 1.2008.
The Japanese Yen fell 0.2% closing at $136.05.
Bonds
Germany’s 10-year yield closed 11 basis points higher at 1.26%.
Britain’s 10-year yield closed four basis points higher at 2.13%.
US 10 Year Treasury closed 9 basis points higher at 3.00%.
Commodities
West Texas Intermediate crude closed 3.86% higher at $102.42 a barrel.
Gold closed 0.17% lower at $1741.10 an ounce.
This morning on the Economic Front we have no data of note on either side of the Atlantic. However, at 12.55 pm we have a speech from ECB President Lagarde. This is followed at 1.30 pm by U.S. Non-Farm Payrolls, including the Unemployment Rate and Average Earnings. Finally, at 3.00 pm we have Wholesale Inventories, followed by a speech from Fed Member Williams at 4.00 pm.
Cash S&P 500
So far, the early July seasonality is working well aided by low volume which is the norm for summer trading. Yesterday’s rally saw the S&P close above its 20 Day Moving Average and the Weekly 5 EMA. This is short-term bullish especially if these levels hold this evening. The worst pain trade would be for the S&P to just keep squeezing higher like we saw in mid-March, ultimately forcing shorts and under invested Fund Managers to capitulate and drive this market higher. It was notable yesterday that the S&P again ignored all Fed speakers including higher Bond Yields and not much relief in terms of the U.S. Dollar. The potential Double-Bottom in Junk Bonds looks more promising after the rally in the S&P all week. The Weekly 5 EMA (3871) is really important as Bulls have failed time and time again with a couple of exceptions to close above this level all-year. Obviously, we have to get through NFP this afternoon but a solid close over 3900 this evening will see follow-through next week to the next key resistance level at 4000. I am still flat the S&P as the market fell shy of yesterday’s buy range. I will now raise my buy level to 3855/3875 where I will be a small buyer with a 3839 ‘’Closing Stop’’. I still do not want to be short the S&P at this time.
EUR/USD
No Change. I am still long the Euro sold from Wednesday at 1.0210 with the same 1.0260 T/P level and 1.0135 stop. If any of the above levels are hit I will be back with a new update for my Platinum Members.
March Dollar Index
The Dollar traded in a narrow range over the past 24 hours. I am still short at 106.90. I will add to this position at 107.50 with the same 108.15 stop. I will now raise my T/P level to 106.50 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Cash DAX
The DAX saw nice follow through to Wednesday’s gains and is back trading above 12800 after a successful test of the 12500 post-invasion low print. I am still flat. I will now raise my buy level 12580/12680 with a 12495 higher stop.
Cash FTSE
It did not take long for Boris to do the inevitable and resign blaming everyone else but himself. Sterling and the FTSE liked the news with both having solid gains since his announcement. The FTSE just missed my 7130 initial buy level by a few points before rallying to sit at 7180 this morning. Ahead of the weekend I am not going to chase the FTSE higher, leaving my 7070/7130 buy level unchanged with the same 6995 stop.
Dow Rolling Contract
The Dow never came close to yesterday’s buy range and I am still flat. The break and close over 31200 is bullish and I would not be surprised to see the Dow rally to the 50-Day Moving Average (31965) over the coming days. Internally the market was strong with the McClellan Oscillator closing at +105 last night. This reading will not be overbought until we see a sold print above +250. Sentiment is still on the floor as shown by the ‘’Fear & Greed ‘’ Index which only improved slightly last night, closing at 28. The Dow has support from 30850/31150 where I will be a buyer with a 30695 ‘’Closing Stop’’.
Cash NASDAQ 100
As expected, the NDX broke higher, finally having a solid close over the key 12,000 inflection point. The 11800/12000 area should now act as strong support on any test. Today, I will be an aggressive buyer in this range with a 11695 stop. If I am taken long I will have a T/P level at 12210. Lower Treasury Yields should support the NDX in Q3 and is the main reason why I continue to hold my April long position at 14327. I will leave my exit level unchanged at 12900 on this position.
September BUND
I am still flat the Bund as the market never came close to yesterday’s sell range. I am not going to chase the Bund lower, leaving my 151.70/152.50 sell level unchanged with the same 153.15 ‘’Closing Stop’’.
Gold Rolling Contract
Gold traded lower to my 1739 buy level. I am still long and I will add to this trade at 1724 while leaving my 1709 stop unchanged. Meanwhile ahead of the NFP this afternoon, I will now lower my T/P level to 1751.
Silver Rolling Contract
No Change. I am still long at 19.40 with the same 20.10 T/P level. Meanwhile, I will leave my 18.35 stop unchanged.
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