U.S. Equity Markets ended the week lower and Treasuries rose amid more signals that global growth is slowing. Despite a dovish turn by the Fed on Wednesday, the S&P 500 saw it’s biggest drop on Friday since January closing down by 1.90%. Financials and Materials lead the benchmark down as the yield on 10-year Treasuries, already at a14-month low, extended its decline. Growth fears also took its toll on Crude, and energy shares tumbled. Investors sought refuge in Utilities, while Gold had its best week since early February. Meanwhile the Yield on Germany’s 10-year Bund tumbled below zero, as it joined Japan in having a negative interest rate. The US Dollar advanced against most major currencies, while the three-month/10 – year yield curve inverted for the first time since 2007.
To mark my 1800th 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@tradernoblecom for details
For anyone following my Platinum Service it made 40 points on Friday and is now ahead by 709 points for March, having made 1013 points in February, 1671 points in January, 2803 points in December, 1541 points in November and 2094 points in October. 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
U.S. and European equity markets plummeted on Friday following the release of German and Euro-Zone PMI’s. The DAX fell 1.6% to a one month-low while the NASDAQ got hit for 2.50% to post one of its worst trading sessions since December. Meanwhile the MSCI Emerging Market Index dipped 1%, which is the largest dip in more than two weeks.
Currencies
The Euro fell 0.7% to close at 1.1297 getting hard after the release of the German PMI. This was the lowest close since the March 7 low of 1.1176. The Euro would have fallen further were it not for the fact that the U.S. Yield curve has inverted. Optimism on a positive outcome to Brexit saw sterling outperform with Cable and EUR/GBP closing higher at 1.3200 and 0.8550 respectively. Flight to safety saw the Japanese Yen rise 0.8% to 109.90 against the US Dollar.
Bonds
The U.S. Treasury Yield curve inverted for the first time since the last Global Financial Crisis in 2007, triggering the first reliable market signal of an impending recession and Interest Rate – Cutting Cycle. The gap between the three-month and 10-year yields vanished as a surge of buying pushed the latter to a 14-month low of 2.4160%. Inversion is considered a reliable harbinger of recession in the U.S., within roughly the next 18 months. It looks like the global slowdown worries have been confirmed and the market is beginning to price in a Fed easing. As I mentioned last week the last rate hike in December was a major mistake by the Fed. Weaker than expected European Factory Data that helped drive the German Bund yield zero to close a – 2 basis points also supported the down move in U.S. Treasuries.
Commodities
West Texas Crude Oil closed 1.8% lower at $58.91 on worries of a global slowdown. This helped Gold to rally small and closed 0.2% higher at $1313.
This morning on the Economic Front we have the German IFO Survey at 9.00 am. This is followed by the Fed’s Harker who is speaking at 10.30 am. At 12.30 pm we have U.S. Chicago Fed National Activity Index. Finally we have the Dallas Fed Business Activity Index at 2.30 pm.
June S&P 500
Initially my S&P plan worked well on Friday with the market trading the whole of my buy range for an average buy level of 2835 before rebounding to an intra-day high of 2844 which hopefully gave you a decent gain. Unfortunately as I was travelling to a funeral I was not able to exit my long position and got stopped at 2823. Subsequently the S&P made a new low of 2807 and I used my Five Handle Rule to buy the S&P again at a price of 2812 before emailing my Platinum Members to exit any long position at 2823 and I am now flat. The last 30 minutes saw another nasty sell-off with the S&P closing at 2807. The S&P has strong support from 2780/2795 and this area must hold or else we will see an acceleration lower to the 50 Day Moving Average of 2755 and the 200 Day MA which comes in at 2734. Today I will be a buyer from 2778/2790 with a 2771 tight stop. I will now lower my sell level to 2830/2842 with a 2851 stop.
EUR/USD
Just as I posted on Friday the Euro was trading at the bottom of my buy range at 1.1300 on the back of the much weaker than expected German PMI. I am still long and I will now lower my T/P level on this position to 1.1325 with the same 1.1255 stop.
June Dollar Index
I am still flat the Dollar and today I will now raise my buy level to 95.25/95.65 with a 94.85 stop. I still do not want to be short the Dollar at this time.
June DAX
Thankfully we had no buy level in the DAX on Friday with the market falling over 250 points from where I posted. The DAX has important support from 11180/11240 and today I will be a small buyer on any dip to this area with a 11135 tight stop.
June FTSE
A combination of a rising Pound and awful economic data saw the FTSE get hit for over 2% on Friday as thankfully we had no buy levels in this market and I am still flat. The FTSE is trading some 200 points lower than where I posted on Friday which is a huge move for this contract. The FTSE has strong support from 7000/7050 and today I will be a buyer on any dip to this area with a 6965 stop.
Dow Rolling Contract
After the Dow sold off to my 25810 buy level with an initial 25785 low the market rebounded to an intra-day high of 25860 before getting hit for 350 points. I used this small rally to exit my long position at my revised 25830 T/P level as emailed earlier to my Platinum Members and I am now flat. The 50 Day Moving Average is at 25300 while the 200 Day MA comes in at 25180 and these two levels must hold or else this decline could turn nasty. Today I will be a buyer from 25200/25350 with a 25125 stop. Given how close we are to long-term support I do not want to be short the Dow at this time.
June NASDAQ
Last Thursday the Daily Sentiment Index closed at 95% bulls for this market. There have only been two days when the DSI has closed higher, January 12, 2018 at 96% and January 22, 2018 at 97%. This was quickly followed by a 10% fall in the market. After closing a new year – to – date highs on Thursday the NASDAQ fell a hefty 2.50% on Friday with the market trading lower to my 7390 buy level before thankfully rallying back to my revised 7420 T/P level at 7.00 pm. Subsequently the market fell another 60 points into the close. The NASDAQ has support from 7220/7280 and today I will be a buyer on any further dip to this area with a 7180 tight stop.
June BUND
By the time you got to read my Daily Commentary the Bund was already trading in negative territory at my 165.35 sell level. I am still short and today I will add to this position on any further move higher to 165.95 with a now higher 166.25 stop. For now I will leave my T/P level unchanged at 165.22.
Gold Rolling Contract
I still do not trust this rally in Gold and today I will leave my 1291/1298 buy level unchanged with the same 1284 stop.
Silver Rolling Contract
I am still flat Silver and today I will again lower my buy level slightly to 14.85/15.25 with a 14.55 stop and a 15.41 T/P level if executed.
Recent Comments