Yesterday’s trading was marked by a very solid session for commodity prices. Oil prices pushed higher, to levels not seen since it was on the way back down in 2014 from the surge then in US tight oil supplies. WTI and Brent oil are both up over 3% and up $2.30/$2.25/bbl, this time from the weekly US DoE report showing declines in US inventories of crude and refined products across the board. Stricter compliance from OPEC also seems to be playing out with OPEC meeting at the end of the week. The global/US growth story has very likely been a contributing factor, with both oil prices and US supply continuing to rise without any noticeable change in US inventories. Meanwhile Silver surged 2.5% on strong volumes.
To mark my 1550th 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 28 points yesterday and is now ahead by 1186 points for April, having made 1760 points in March, 2256 points in February, 879 points in January, 946 points in December, and 823 points in November Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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While the rise in oil was chunky, price gains of 3% looked modest next to the price action on the LME and Dalian iron ore futures yesterday. Much of the talk attributes the gains to spill-over effects from the Russian sanctions. Aluminum prices rose 5.49%, while nickel jumped an eye-glazing 7.46% as traders scrambled to cover positions. Nickel was up a rather pedestrian 2.11%, pushing up through $7,000/t, nickel to $15275/t (+1,060 on the day!). After having tracked lower in recent weeks, Dalian iron ore jumped 4.26% yesterday, supported also by Chinese steel rebar futures, up 1.16%. Be aware also that iron ore and coal markets are no longer the strictly over-the-counter markets they were some years back but are now very active in the derivative space with speculation from the likes of everyday/retail Chinese investors. Not to be left out, gold has also edged higher.
The AUD/USD has been only somewhat higher and I expect that if this morning’s NZ CPI and AU employment numbers play out as I expect (lower NZ inflation; strong AU employment), it should be supportive for the AUD/USD and the AUD/NZD over the course of the day.
As expected, the Bank of Canada left Interest Rates on hold at 1.25%, but short term Canadian yields eased back on reduced expectations for higher rates at upcoming meetings. Governor Poloz spoke of headwinds preventing a full recovery (e.g. resolution of NAFTA uncertainties stymying business confidence) and the market took back three points from the expected pricing for the 30 May meeting from a 56% chance to a 44% chance.
While front line commodity price inflation news has been in the ascendancy, UK’s CPI in March came in less than expected for both headline and core, headline coming in at 2.5% y/y and core at 2.3%, both missing by two tenths on lower goods inflation as the Pound’s previous fall dissipates from importers and High Street cost lines. Meanwhile, the House of Lords voted in a Bill to keep the UK in a Customs Union even as the UK leaves the EU, a defeat for the Government which will now likely kick this rather crumped can even further down the road.
There was no key US data. (That is apart from the weekly oil inventory report.) The Fed released its Beige Book, it company anecdote and regional reporting ahead of the 2 May FOMC meeting. While all Fed districts reported ‘’moderate’’ or ‘’modest’’ and positive economic growth, there were understandable concerns on the trade/tariff front from manufacturers, from agriculture and transportation contacts. Jumps in steel and aluminum prices were cited and reported rises seemed well beyond what might have been expected just from tariff effects, one manufacturer reporting pointedly to higher aluminum prices as ‘’threats to American jobs and businesses’’. You do not have to think too long about where those reports were aimed at. Higher fuel costs also had a run in the commentary. Businesses reported tight labour markets and various responses, including increasing pay, overtime, retraining, and automation. The Book did not seem to be the horror story at the retail price level, prices rises reported as ‘’scattered’’.
This morning on the Economic Front we have Euro-Zone Current Account at 8.00 am and this is followed at 9.30 am by UK Retail Sales. At 1.30 pm we have US Weekly Jobless Claims and the Philly Fed Manufacturing Survey.
Finally the Fed’s Brainard and Quarles are speaking at 1.00 pm and 2.30 pm respectively.
June S&P
Unfortunately the S&P just missed my 2720 sell level with a 2718.50 high print before trading to a subsequent 2704 low print and I am still flat. The market was quiet yesterday after reaching my 2700/2720 target price and is overbought. On top of this we have the strong resistance level at 2744 which is the high from the post-FOMC Meeting last month. Today I will still be a seller on any rally higher to 2723/2732 with the same 2737 stop. If I am taken long and subsequently stopped out of this position I will be a more aggressive seller from 2742/2752 with a wider 2759 stop. My only interest in buying the S&P is still on a dip lower to 2685/2695 with a 2678 stop.
EUR/USD
For the second consecutive trading session the Euro just missed my 1.2340 buy level before rallying and I am still flat. Today I will lower my buy level slightly to 1.2295/1.2335 with a 1.2260 stop. I still do not want to be short the Euro at this time.
June Dollar Index
No change as I am still a seller on any rally higher to 89.80/90.20 with a 90.55 stop.
June DAX
The DAX came close to its 200 Day Moving Average before selling off as expected. I am still flat and today I will leave my sell range unchanged from 12690/12750 with the same 12795 stop. I will still be a buyer on any dip lower to 12320/12390 with a 12260 stop.
June FTSE
The weakness in Sterling helped the FTSE to play catchup with the other Indices having underperformed over the past week. I am still flat and today I will now raise my buy level to 7130/7175 with a 7095 stop. The FTSE has strong resistance at the 7315/7320 area which is the late February high and today I will be a small seller from 7310/7350 with a 7385 stop.
Dow Rolling Contract
Twice the Dow came within 20 points of hitting my 24700 buy level before having a strong rally each time and I am now flat. I will now narrow my buy range to 24540/24700 with a 24455 stop. My only interest in selling the Dow is still on a rally higher to 25050/25200 with a 25280 same stop.As I have mentioned countless times that all ”Open Gaps” get filled and we have two massive gaps above in the Dow at 25972 and 26416 so maybe we trade back to these highs before we have a proper crash in the US stock market. This one of the main reasons why I have been a buyer on dips over the past two months.
June NASDAQ
Once the NASDAQ broke and closed over 6700 it has continued to rally as the market has not weakened enough to give traders a chance to cover their short positions. I am still flat and today I will raise my buy level slightly to 6725/6775 with a 6675 wider stop.
June BUND
The BUND finally had a small sell-off yesterday to close at the 159.00 level. I am still flat and today I will now lower my buy level to 158.00/158.45 with a 157.70 stop.
Gold Rolling Contract
Gold continues to underperform Silver as the market trades below the key 1366/1376 resistance level and I am still flat. Today I will leave my buy level unchanged from 1323/1332 with a 1314 stop which is just below the 100 Day Moving Average at 1318.
Silver Rolling Contract
The beauty of my Platinum Service is my updated emails. After Silver failed to hit my 16.70 buy level yesterday morning I emailed my Platinum Members at 12.30 pm to buy Silver at 16.97. The market subsequently traded around this level for 30 minutes before having a strong rally and I used this move higher to cover my long position at 17.25. Again I emailed my Platinum Members to buy Silver at 17.15. I am still long and I will leave my stop unchanged at 16.55. Meanwhile my T/P level is also unchanged at 17.40.
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