U.S. Equity Markets got slammed yesterday after yet another incredibly volatile trading session, led by the NASDAQ 100 which closed lower by 3.06%. It is strange that despite the aggressive two-way price movement, the VIX barely budged, closing down 1.3%. It is a long time since stocks sold aggressively while at the same time we saw selling in the VIX. The U.S. Bureau of Labour Statistics’ Consumer Price Index (“CPI”) data for April rose by 8.3% on an annual basis compared with Wall Street’s projected 8.1% increase and the month prior’s rise of 8.5%. Following the release of these numbers, it is likely we will see stocks come under greater pressure as the lack of noticeable slowing in inflation growth suggests the Federal Reserve may take more aggressive action to raise interest rates than what Wall Street is presently expecting. Within the S&P 500, eight of the 11 sectors finished higher. European Markets closed higher. The European Commission is anticipated to unveil a plan to help Ukraine export agricultural products via roads and rails to block a Russian naval blockade of its Black Sea ports. European Central Bank Vice President Luis de Guindos said it needs to begin normalising monetary policy sooner than later, implying a rate hike could happen as soon as July. Italian Prime Minister Mario Draghi encouraged the U.S. and its allies to seek a long-term peace solution for the conflict in Ukraine. Bank of France Governor François Villeroy de Galhau said the country needs an “ambitious” debt-reduction strategy to ensure sustainable economic growth. In Asia, Government officials in Shanghai declared that half of the city was COVID-19-free, boosting hopes that Beijing may soon ease lockdown measures. Chinese CPI figures for April rose more than expected due to COVID-19 lockdowns and higher fuel and food prices. Japan’s Chief Cabinet Secretary Hirokazu Matsuno said the government will support domestic companies hurt by China’s zero-tolerance COVID-19 policy. Australian Consumer Confidence data for May fell compared with April, hitting its lowest level since August 2020 due to household concerns around rising costs. Elsewhere, Oil rose 5.47% following news that Ukrainian forces halted major Russian energy shipments to Europe while Bitcoin declined 6.45%, closing below $30,000.
To mark my 2525th 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 212 points yesterday and is now ahead by 1107 points for 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, having made 2466 points in November, 1028 points in October, 2866 points in September, 1543 points in August, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, after ending March with an impressive gain of 3769 points. 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 1.65% lower at a price of 3935.
The Dow Jones Industrial Average closed 326 points lower for a 1.02% loss at a price of 31,834.
The NASDAQ 100 closed 3.06% lower at a price of 11,967.
The Stoxx Europe 600 Index closed 2.1% higher.
Yesterday, the MSCI Asia Pacific Index rose 0.3%.
Yesterday, the Nikkei closed 0.18% higher at a price of 26,213.
Currencies
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.1% lower at $1.0515.
The British Pound closed 0.6% lower at 1.2240.
The Japanese Yen rose 0.3%, closing at $130.02.
Bonds
Germany’s 10-year yield closed five basis points lower at 0.96%.
Britain’s 10-year yield closed three basis points lower at 1.82%.
US 10 Year Treasury closed five basis points lower at 2.93%.
Commodities
West Texas Intermediate crude closed 5.47% higher at $105.54 a barrel.
Gold closed 0.51% higher at $1851.10 an ounce.
This morning on the Economic Front we have U.K. GDP, Trade Balance, Index of Services and Industrial Production at 7.00 am. Finally, we have U.S. PPI and Weekly Jobless Claims at 1.30 pm.
Cash S&P 500
Yesterday was a wild ride for the S&P, hitting a post CPI low at 3952, before rallying 100 Handles mid-afternoon, before reversing all of these gains into the close, while at the same time making a new low for the year. No matter what way you look at it this was decisively bearish price action coming on the back of an already severely oversold market. Amazon led the decline lower, closing off 3.2% at a price of $2107 despite a $20 rally into the close. The 14-DAY RSI for Amazon is now at 22. I reiterate what I said yesterday Fund Managers and Retail are sitting on massive losses in Amazon and the same could be said for many of the other big names of 2021. This sell-off in Amazon shows the Weekly Chart having its lowest RSI ever, lower than the tech bubble in 2000 and the Global Financial Crisis of 2008/09. The good news yesterday was the continued fall in 10-year Treasuries, closing at 2.93% last night-30 basis points below Monday’s high. We need the 10-year to trade lower to at least 2.50% as this would help the NDX to recover some of the rout over the past six weeks. I am still long the S&P at 4050 with the market again missing my 4065 T/P level with a high of 4054. The S&P still has not fallen 20% from its high which comes in at a price of 3870. Maybe we need to go there first before attempting a more sustainable rally. The S&P is now down six consecutive weeks which is unprecedented. The S&P has support from 3870/3910 where I will again be a buyer with a 3970 T/P level. I am still long the S&P from Monday at 4050. I will again lower my T/P level to 4060 with no stop and if any of the above levels are hit I will be back with a new update for my Platinum Members.
EUR/USD
No Change. I am still long at 1.0565 with the same 1.0625 T/P level and 1.0485 stop. If I am stopped out of this position I will be an even more aggressive buyer from 1.0430/1.0480 with a 1.0365 stop. If I am taken long a second time I will have a T/P level at 1.0580.
March Dollar Index
The Dollar made a slight new high on Monday before having a small sell-off into the close. I am still short at 103.30 with the same 104.05 closing stop and 102.90 T/P level.
Cash DAX
The DAX rallied over 2% yesterday and I am still flat. I will now raise my buy level to 13320/13420 with a higher 13285 tight stop. I still have no interest in pressing the downside given how oversold the DAX is at this time.
Cash FTSE
No Change. The FTSE has support from 7090/7160 where I will be a small buyer with a 6995 wider stop.
Dow Rolling Contract
A frustrating day in the Dow as the market fell shy of my initial buy level before rebounding over 600 points. Subsequently the Dow followed the NDX lower, hitting my 31880 buy level. As I have enough exposure I emailed my Platinum Members to exit any long position at my revised 31965 T/P level and I am still flat. The Dow did rally above 32000 given members plenty of time to exit with a profit. I did not expect the Dow to close below 32000. With the Fear & Greed Index closing last night at 20 which is ‘’Extreme Fear’’ I will continue to be a buyer on dips despite the awful price action. We are now setting ourselves up for one of those rallies that you have to be in otherwise the market will not give you a chance to buy. We have support from 31450/31700 where I will again be an aggressive buyer with no stop.
Cash NASDAQ 100
No Change. The NDX got hammered yesterday, hitting my 12000 buy level before rallying to my revised 12062 T/P level. I continue to nurse last month’s 14327 long position which I have now carried into May. I will now lower my exit level on this position to 14100 which I am hopeful we will see this month. With the McClellan Oscillator closing at – 231 last night I will now look to add to my long position. The NDX has further support from 11650/11900 where I will be a buyer. If I am taken long I will have a T/P level at 12210. Falling Bond Yields should see some fresh buying coming into tech given how oversold this market is trading.
June BUND
Frustrating. The Bund made a low of 151.86, just above my 151.80 buy level before rallying 200 points helping the Yields to close below 1%. I am not going to chase the Bund higher, moving my buy level slightly to 152.00/152.80 with a tight 151.55 stop which is just below yesterday’s low print.
Gold Rolling Contract
Gold traded in a narrow range in the past 24 hours. As I wanted to bank some points for yesterday I emailed my Platinum Members to exit any long position at 1854.50 and I am now flat. Gold has support from 1810/1825 where I will again be a buyer with a tight 1797 stop. One level of concern is the last time the 10-Year was trading above 3%, Gold was much lower at $1300.
Silver Rolling Contract
No Change. I am still long at 22.15 with the same 22.50 T/P level and 20.95 tight stop. If I am stopped out of this position I will be an aggressive buyer from 20.10/20.80 with no stop and a T/P level at 21.50.
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