Regardless of whether an agreement yesterday by major oil producers to freeze oil production would have had any meaningful impact on oil prices beyond the psychological boost it might have provided, the failure of the Doha talks to agree anything serves to underscore the ongoing supply/demand imbalance and which the fall off in US Shale oil output does little to correct. Oil opened last night 7% lower on the back of no agreement and this seeing all the equity market open substantially lower.
To mark my 1050th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2500 for my Platinum Service which includes 1/4 updated emails throughout the trading session. This offer is open to both new and existing members and if anyone is interested please email me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 25 points last Friday on what proved to be one of the quietest trading sessions of the year as practically all markets went on hold ahead of Doha. My Platinum Service is now ahead by 1097 points for April having made 2265 points in each of the previous two months following a record 3365 points in January. Since I started this service last June it has made over 23,000 points.
As a result of the weaker oil prices, the CAD, AUD and NZD have all opened nearly 1% lower versus the US Dollar compared to last Friday’s New York close. Later when the US Markets open the lower energy stock should finally see a rise in the VIX which has been close to average lows over the past few weeks.
On Friday markets were not put off by weaker US economic data. It is not clear whether this is because of the comfort it provides to risk markets as the Fed is not going to be lifting Interest Rates soon, or because of the likelihood of a much improved second Quarter. US Industrial Production fell by a much weaker than expected 0.6% versus -0.1% expected, while the University of Michigan Consumer Sentiment Index disappointed expectations of a 92 print dropping to 89.7 from an expected reading of 91. At least the Empire New York Manufacturing Index came in better than expected at 9.5 which was well above the 2.0 expected.
Also to note on the data front and sneaked out late Friday, China said its Q1 GDP was just 1.1% on a seasonally adjusted basis, well below the 1.5% expected, while Q4 2015 was revised down to 1.5% from 1.6%.
US stocks closed very slightly weaker on Friday though the VIX was flat, the US Dollar was softer while US Treasury Yields were lower but still very much in the middle of the 1.6% to 2.0% that has held the 10 Year Treasury Yield over the past two months. Oil slipped a little in front of the now failed Doha Meeting while Iron ore closed another $1.1 lower.
The US Dollar Index closed 0.22% lower while USD/JPY which had closed just under 109 opened near 108 last night as comments from US Treasury Secretary Jack Lew who said he does not support BoJ intervention to try and weaken the Yen. Interestingly on Friday the CFTC data for the Yen showed a record long position in the week ended last Tuesday.
The strengthening of the Yen hit the Nikkei overnight which closed 3.2% lower at 16275 and this has filtered through to Europe this morning with European markets opening 1.2% lower on average.
Today is extremely quiet on the economic front with no date releases due from either the Euro-Zone or the UK, while the only US data of note is the NAHB Housing Market Index at 3.00 pm. Meanwhile at the same time the Fed’s Dudley will give the opening remarks at an Economics Conference.
June S&P 500
I am still flat the S&P which is opening weaker this morning on the back of the failed Doha talks. I will leave my buy level unchanged at 2051/2057 with a 2046 stop. Again if I am taken long and subsequently stopped of this position I will be a more aggressive seller in front of 2042 with a 2035 stop. Despite the worsening economic data it is so difficult to be short the market especially with the Central Banks still in play. However the 2080 is now major resistance and today I will be a small seller on any rally higher to 2079/2085 with a 2091 stop.
EUR/USD
Friday’s weaker US economic data saw the US Dollar trade lower but unfortunately I am still flat having got stopped out at 1.1240 last week. Today I will raise my buy level to 1.1210/1.1240 with a 1.1170 stop. The price action is telling me not to be short the market at this time.
US Dollar Index
No change as I am still a seller on any rally higher to 95.20/95.60 with the same 95.90 tight stop. Not helping markets at this time is the low volatility but hopefully this will change going forward after the failed Doha talks.
June DAX
I am still flat the DAX and today I will lower my sell level to 10130/10180 with a 10240 stop. Remember a break and close over 10200 will be at least short-term bullish. I will also be a small buyer on any dip lower to 9840/9890 with a 9785 stop.
June FTSE
I am still flat the FTSE and today I will lower my sell level slightly to 6310/6350 with a 6380 stop. I still do not want to be long the market at this time especially as the FTSE has very strong resistance from 6350/6400.
Dow Rolling Contract
The Dow just missed my sell level on Friday and I am still flat. The price action continues to be positive but I am reluctant to buy the market given how overvalued this market is trading after a 2600 rally in just seven weeks. Today I will lower my sell level slightly to 17960/18020 with a 18070 stop.
June BUND
I am still flat the BUND which as expected had a nice rally on Friday as the market just missed my buy level by 17 points. Today I will raise my buy level to 163.00/163.40 with a 162.70 stop. Despite the incredibly low Bund yield I do not want to be short the market at this time.
Gold Rolling Contract
Gold is rebounding this morning after the failed Doha talks. I am still flat as I do not trust been long Gold at these levels. Today I will raise my buy level slightly to 1199/1208 with an 1191 stop.
Silver Rolling Contract
As I wanted to book some points on what was such a slow trading session on Friday I covered my latest long 16.05 Silver position at 16.30 and I am now flat. Today I will again look to buy Silver on any dip lower to 15.80/16.10 with a 15.40 stop.
Recent Comments