U.S Equity Markets surged on the better-than-expected Consumer Price Index (“CPI”) figures. The headline figure rose just 0.2%, dragging the YoY figure to a 27-month low at 3%. This is the 12th straight month YoY declines, equalling the longest streak of declines in history since records began in 1921. Core CPI fell to 4.8% YoY which is the lowest rate since October 2021.The NASDAQ 100 led Wednesday’s gains closing higher by 1.24%, helping the VIX to close lower by 9% at a price of 13.74. With inflation data coming in softer than expected, it could raise doubts among policymakers at the Federal Reserve about the need for further interest rate hikes. Microsoft (MSFT) has made progress in its $69 billion bid for Activision Blizzard (ATVI), overcoming hurdles from U.S. regulators and the U.K. Competition and Markets Authority. The U.K. authority, which previously vetoed the deal, has now expressed willingness to consider proposals from Microsoft and has agreed to a stay in the companies’ appeal before the Competition Appeal Tribunal. This development brings Microsoft closer to finalising the largest gaming deal ever. Shares rose 1.42% on this news, The Bank of Canada raised rates by 0.25% to 5%, bringing borrowing cots to their highest level in 22 years. Most major commercial lenders in Canada believe that this rate hike will be the last in the current cycle. European Markets surged yesterday following a difficult past 10 days. NATO leaders met on Tuesday and refrained from providing Ukraine with a clear timeline or pathway for joining the alliance, while expressing intentions to extend an invitation in the future. This decision was met with criticism from Ukrainian President Volodymyr Zelensky, who described it as “unprecedented and absurd” given the ongoing conflict with Russia. Some NATO members, including the United States and Germany, have been hesitant to outline a timeline or checklist for Ukraine’s membership. British Prime Minister Rishi Sunak has emphasised that tackling inflation is of greater importance than implementing tax cuts in the U.K., suggesting that there is unlikely to be a significant pre-election giveaway for British voters. Sunak stated that reducing inflation and maintaining responsible government borrowing are the top economic priorities. Meanwhile, a report by Grant Thornton highlights that the cost-of-living crisis in Britain is expected to persist for nearly a year, with the average household projected to face a £2,300 decrease in their financial situation. In Asia, the Nikkei reversed some of last week’s losses, closing higher by 1.50% this morning. Elsewhere, Oil rose 1.23% while a much weaker Dollar saw Gold end Wednesday with a gain of 1.2%.
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For anyone following my Platinum Service it lost 263 points yesterday and is now ahead by 72 points for 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 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and 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 0.74% higher at a price of 4472.
The Dow Jones Industrial Average closed 86 points higher for a 0.25% gain at a price of 34,347.
The NASDAQ 100 closed 1.24% higher at a price of 15,307.
The Stoxx Europe 600 Index closed 1.52% higher.
This morning, the MSCI Asia Pacific closed 0.8% higher.
This morning, the Nikkei closed 1.49% higher at a price of 32,419.
Currencies
The Bloomberg Dollar Spot Index closed 1.2% lower.
The Euro closed 1.1% higher at $1.1131.
The British Pound closed 0.5% higher at 1.2996.
The Japanese Yen rose 1.0% closing at $138.70.
Bonds
Germany’s 10-year yield closed 8 basis points higher at 2.54%.
Britain’s 10-year yield closed 15 basis points lower at 4.52%.
U.S.10 Year Treasury closed 10 basis points lower at 3.85%
%.
Commodities
West Texas Intermediate crude closed 1.23% higher at $75.75 a barrel.
Gold closed 1.1% higher at $1958.10 an ounce.
This morning on the Economic Front we already had the release of U.K. May GDP which fell 0.1% versus -0.3% expected. Next, we have the Bank of England Credit Conditions Survey at 9.30 am, followed by Euro-Zone Industrial Production at 10.00 am. At the same the European Commission will release its Economic Growth Forecasts. At 12.30 pm we have the Minutes from the last ECB Meeting. This is followed at 1.30 pm by U.S. PPI and Weekly Jobless Claims. Finally, we have the Monthly Budget Statement at 7.00 pm.
Cash S&P 500
The 3% CPI print was enough to send the S&P to new highs for the year helped by the further fall of 10 basis points in Treasury Yields. I know I have been saying the same tune how overbought technicals are as there are no bears left as the ‘’all clear’’ is again shouted from the rooftops. The $BPSPX RSI is now at 81, a reading that we have not seen since the pre-COVID crash. The RSI is more overbought than even during all the post COVID money printing when we had rates at zero. The S&P is now trading over 3% above the first-rate hike even started. This is as if nothing has actually happened. I know I have to respect the positive price action but history tells us not to be a buyer when the $NYSI is max overbought as it is now. In general, the charts continue to scream sell, but proper downside remains elusive as longs as the positive momentum continues. That said, new highs in recent weeks have been very marginal at best and the negative divergences and overbought readings keep building. Earnings reports and the reactions to them will get very interesting as there is little room for error to justify the ongoing multiple expansion. Shortly after I posted yesterday morning the S&P hit my second sell level at 4460 for a 4450 average short position. The S&P made a post CPI high at 4498 before falling 30 Handles. This move lower saw my 4471-stop triggered and I am now flat. As I mentioned yesterday the S&P has strong resistance at 4510. Today, I will be a seller from 4493/4513 with no stop for now. If triggered, I will have a T/P level at 4460.
EUR/USD
It looks like my 1.1200 target price for the Euro will hit much quicker than I expected. Short-term the Euro is overbought having risen over 250 points in the last week. We have strong resistance from 1.1180/1.1260 where I will be a seller with a 1.1315 ‘’Closing Stop’’. I will now raise my buy level to 1.0950/1.1030 with a 1.0895 ‘’Closing Stop’’.
June Dollar Index
Wrong! The Dollar crashed yesterday, stopping me out of my 101.98 average long position at 100.95 and I am still flat. This morning the Dollar is trading lower at 100.40. The Dollar is oversold. I will be a small buyer from 99.30/99.90 with a 98.65 ‘’Closing Stop’’. If triggered, I will have a T/P level at 100.70.
Cash DAX
The DAX has now risen 600 points off last Monday’s 15450 low print. Another insane move as investors continue to buy every dip in German Equities. This move higher has me short at 16030. I will add to this position at 16130 while leaving my 16205 ‘’Closing Stop’’ unchanged. I will have a 15970 T/P level on this position. If any of the above levels are hit, I will be back with a new update form my Platinum Members.
Cash FTSE
The FTSE surged yesterday finally playing some catchup with the DAX. The FTSE is now trading 2% higher from where I marked prices yesterday morning. Unfortunately, the FTSE missed my initial 7240 buy level by a few points before starting this aggressive rally. The FTSE has support from 7290/7350. I will move my buy level to this area with a higher 7235 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The Dow hit an afternoon high at 34600 – and incredible 1000 points higher from where we were last Monday morning. Subsequently the Dow fell 250 points off this post CPI high into the close. Despite yesterday’s reversal I cannot be a seller of the Dow given its relative underperformance to both the NDX and S&P. I will now raise my Dow buy level to 34000/34220 with a tight 33895 ‘’Closing Stop’’.
Cash NASDAQ 100
The NDX made a new high for the year following the 3% CPI print. This move higher saw my 15280 second sell level triggered for a now 15205 average short position. The latest move higher came with a strong negative divergence. I will raise my T/P level on this position to 15120 while leaving my 15405 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September BUND
I am still flat. The Bund rallied 100 points on the benign U.S. CPI Report and I still flat. Given how low Bund Yields are I am reluctant to chase the price of the Bund higher. Ahead of PPI I will only raise my buy level to 130.50/131.30 with a higher 129.85 ‘’Closing Stop’’.
Gold Rolling Contract
Just like the Euro above I have had the right view of buying the dip in Gold but I have not been able to get a long position on board. This morning Gold is trading higher at 1960. We have short-term support from 1918/1933. I will move my buy level to this area with a higher 1907 ‘’Closing Stop’’.
Silver Rolling Contract
Finally, Silver surged yesterday hitting my revised 24.13 T/P level on my 23.63 average long position and I am now flat. I am still looking for a big move higher in Silver over the coming months. Today. I will again be a buyer on any dip lower to 23.20/23.90 with no stop.
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