U.S. Equity Markets closed mixed on Friday in a session that finally witnessed some two-way price action. Most Indices finished with mild gains but with choppy price actions amid headwinds from a plunge in the University of Michigan Consumer Sentiment and a rise in inflation expectations. Treasury Yields were higher as the complex pressured pre-market after the latest UK GDP data exceeded expectations. Fed Member Bowman (voter) said on Friday that if the Fed forecasts unexpected shocks, that would be a case for Interest Rate cuts, but she does not see rate cuts warranted this year. Bowman also said it will probably be a number of Fed Meetings before she is ready to endorse cuts and wants to see a number of months of better inflation data. Meanwhile, Fed Member Goolsbee (non-voter) said on Friday that the 2% inflation target acts as an anchor on expectations and short-run expectations are not what matters, while Goolsbee reiterated data dependence and said given the uptick in inflation, the Fed has to wait and see on Policy. Finally, Kashkari who is also a non-voter said that the bar is high for another rate hike, but it cannot be ruled out, while he is cautious about restrictive Monetary Policy is and is in wait-and-see mode regarding the future of Monetary Policy. According to Bloomberg, Apple is reportedly closing in on a deal with OpenAI to put ChatGBT on the iPhone. It is also reported that an Apple store in New Jersey voted against unionising, while an Apple store in Maryland voted to hold a strike with the date to be determined. Elsewhere, Oil closed flat while Gold surged, ending Friday with a gain of 1.5%.
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For anyone following my Platinum Service it made 185 points on Friday and is now ahead by 1172 points for May, having finished April with a gain of 4010 points after ending March with a gain of 2113 points. February closed with a gain of 1606 points, after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 points, after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. 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 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 0.16% higher at a price of 5222.
The Dow Jones Industrial Average closed 125 points higher for a 0.32% gain at a price of 39,512.
The NASDAQ 100 closed 0.26% higher at a price of 18,161.
The Stoxx Europe 600 Index closed 0.77% higher.
This Morning, the MSCI Asia Pacific closed 0.3% lower.
This Morning, the Nikkei closed 0.13% lower at a price of 38,179.
Currencies
The Bloomberg Dollar Spot Index closed 0.08% higher.
The Euro closed 0.2% higher at $1.0771.
The British Pound closed 0.2% higher at 1.2524.
The Japanese Yen fell 0.1% closing at $155.79.
Bonds
Germany’s 10-year yield closed 5 basis points higher at 2.52%.
Britain’s 10-year yield closed 2 basis points higher at 4.17%.
U.S.10 Year Treasury closed 1 basis points higher at 4.50%.
Commodities
West Texas Intermediate crude closed 0.14% lower at $78.40 a barrel.
Gold closed 1.6% higher at $2360.10 an ounce.
This morning on the Economic Front we have no Economic data of note. The only American news of potential interest are speeches from Fed Members Jefferson and Mester at 2.00 pm and 2.10 pm respectively.
Cash S&P 500e
My view at the moment is to try and fade rallies and definitely not a time to initiate new longs. I know that U.S. Charts are not structurally overbought but the melt-up in European Indices is a major warning for me. This latest rally came against a backdrop of the lowest two-day volume on back-to-back days since 2000. This is an incredible statistic when you consider markets are so much larger now. On top of this we have just witnessed one of the most vicious VIX crushes in history. The chart is so compressed with no buyer or sellers, yet the S&P keeps drifting higher. This smells of a major pullback but I cannot say when and from where. Thus, my idea to fade rallies continues. I expected to see some weakness in the first two weeks of May but so far this has not happened. On Friday, the S&P traded the whole of my sell range for a 5231.50 average short position before falling 20 Handles. This move lower saw my revised 5220 T/P level triggered and I am still flat. The S&P has further resistance from 5238/5254 where I will again be a seller with a higher 5267 ‘’Closing Stop’’. I no longer want to be long the S&P at this time. If this view changes, I will be back with a new update for my Platinum Members
EUR/USD
The Euro continues to trade in narrow ranges, and I am still flat. I will now raise my buy level to 1.0650/1.0720 with a higher 1.0575 ‘’Closing Stop’’. I still do not want to be short the Euro. If this view changes, I will be back with a new update for my Platinum Members.
Dollar Index
I am still flat the Dollar. This morning the Dollar is trading lower at 105.30. The Dollar has short-term resistance from 105.70/106.40 where I will now lower my sell level to this range while lowering my ‘’Closing Stop’’ slightly to 107.05. If I am taken short, I will have a T/P level at 105.25.
Cash DAX
Just like the FTSE, below, the DAX continues to make one new high after another. This move higher comes following a market that has rallied for eight consecutive trading sessions despite a pronounced negative RSI divergence on the Daily Chart. At one stage on Friday morning I was short all five equity Indexes before thankfully the U.S. Indices sold off in the afternoon. I am now short the DAX at an average rate of 18710. To reduce my risk further, I will now look to exit this short DAX position at a price of 18750. If I exit this position, I will look to sell the market again on any further rally to 18820/18910 with a higher 19005 ‘’Closing Stop’’. If I am taken short at this higher range, I will have a T/P level at 18740. Given the size of the negative divergence, I no longer want to be long the DAX at this time.
Cash FTSE
The FTSE continues to make new all-time highs, with its latest high coming at a price of 8455 on Friday morning. This melt up in the FTSE has led to the highest Daily RSI since 2018 at a price of 82. I said in Thursday’s Daily Commentary that this is not sustainable without a major correction. I still stand by this view. After the FTSE hit my second sell level at 8410, I am now short at an average rate of 8380. I will continue to hold this position with no stop for now. If the FTSE continues to defy gravity and move higher, I will look to add to this position. I will also raise my T/P level slightly to 8320. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Much to my frustration the Dow continues to rally and is now within 400 points of its all-time high. Friday’s 39,580 high print meant that the ‘’Open Gap’’ from April 1 has now been filled. I am now short the Dow at an average rate of 39325. I will leave my 39605 ‘’Closing Stop’’ unchanged while raising my T/P level to 39290. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
My NDX plan worked well as the market rallied to my 18200-sell level before selling off to my 18130 T/P level and I am now flat. Today, I will again be a seller on any further rally to 18250/18400 with a higher 18505 ‘’Closing Stop’’. I still do not want to be long the NDX at this time.
March BUND
Late on Friday, the Bund traded lower to my latest buy level at 130.75. I am still long, and I will continue to look to add to this position on any further move lower to 130.05 while leaving my 129.45 ‘’Closing Stop’’ unchanged. I will leave my 131.40 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold surged on Friday as it continues to build momentum off its 2278 intra-day low from May 3. This morning Gold is opening slightly lower in Europe at a price of 2348. We have short-term support from 2330/2336. I will now raise my buy level to this area with a higher 2319 tight ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2348.
Silver Rolling Contract
Unfortunately, I cut my Silber position too early last Wednesday at 27.45 with the market trading at 28.10 this morning. Given the recent price action I am reluctant to chase the market higher. Silver has short-term support from 26.80/27.60 where I will be a small buyer with a higher 25.95 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 28.20.
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