U.S. Equity Markets suffered their worst loss in nearly two years as across the board selling saw most Indices fall by more than 4%. This move higher saw the VIX close with a gain of 18% at a price of 30.96. Several major retailers – including Target (TGT) – reported a hit to profits due to increased overhead, a deceleration in sales, and ongoing supply-chain disruptions. This helped exacerbate money managers’ fears that the global economy may be entering a recession, rippling across other stocks and riskier assets as investors continue to focus on inflation and rate hikes by the Federal Reserve. And with consumers shifting their spending habits, the trend is expected to continue to impact upcoming earnings – further clouding Wall Street’s outlook alongside the Russia-Ukraine war and China’s ongoing COVID-19 lockdowns. Still, it remains to be seen whether American markets ultimately grow or contract. The central bank has made it clear that it will do whatever it can to ease inflation and support the economy. So, while this could slow economic activity, it may also bring the market down to cheap enough levels for investors to buy in once more. Within the S&P 500, all 11 sectors finished lower. European Markets closed mixed. European Central Bank Governing Council Member Klass Knot said a 0.25% interest-rate hike in July should be expected, with a 0.50% increase also not out of the question. The European Union and the U.S. reportedly discussed implementing tariffs on Russian energy imports to limit the country’s revenue potential. Euro-Zone final Consumer Price Index (“CPI”) growth for April was steady with March’s record high, fuelled by rising food and energy costs. U.K. CPI data for April hit its highest level since 1982, supporting additional Bank of England rate hikes. In Asia, China’s New Home price data for April showed values continued to decline, reducing the likelihood of a quick economic recovery. Chinese government revenue tumbled 41% compared with the same period last year due to COVID-19 lockdowns weighing on economic activity. Japan’s Preliminary First-Quarter Gross Domestic Product figures contracted less than expected as business and consumer spending remained unexpectedly resilient. South Korean Finance Minister Choo Kyung-ho said the government has no plans for a large extra budget unless the economy were to experience large shocks. Elsewhere, Oil fell 2.82% as the European Union continued to deliberate on ending its reliance on Russian energy supplies, while Bitcoin fell 5% on continued cryptocurrency volatility.
To mark my 2550th 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 lost 850 points yesterday and is now ahead by 1394 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 4.04% lower at a price of 3923.
The Dow Jones Industrial Average closed 1164 points lower for a 3.57% loss at a price of 31,490.
The NASDAQ 100 closed 5.06% lower at a price of 11,928.
The Stoxx Europe 600 Index closed 0.3% higher.
Yesterday, the MSCI Asia Pacific Index fell 0.3%.
Yesterday, the Nikkei closed 0.94% higher at a price of 26,911.
Currencies
The Bloomberg Dollar Spot Index closed 0.6% higher.
The Euro closed 0.8% lower at $1.0465.
The British Pound closed 1.3% lower at 1.2344.
The Japanese Yen rose 0.9%, closing at $128.21.
Bonds
Germany’s 10-year yield closed three basis points lower at 1.02%.
Britain’s 10-year yield closed two basis points lower at 1.86%.
US 10 Year Treasury closed ten basis points lower at 2.88%.
Commodities
West Texas Intermediate crude closed 2.82% lower at $109.79 a barrel.
Gold closed 0.11% higher at $1817.10 an ounce.
This morning on the Economic Front we have Euro-Zone Construction Output and the ECB Minutes from last Month’s Meeting at 10.00 am and 12.30 pm respectively. This is followed by U.S. Weekly Jobless Claims and the Philly Fed Manufacturing Survey at 1.30 pm. Finally, we have Existing Home Sales at 3.00 pm.
Cash S&P 500
The only word to describe yesterday’s bloodbath in the American Indexes is ‘’Carnage’’ as the S&P had is biggest daily loss in nearly two years. The only saving grace from yesterday was having tight stops on any long positions and not buying anymore of the S&P or other Equity markets as the sell-off gathered pace right from the U.S. Open. The trigger for yesterday’s sell-off was the huge miss in retail giant Target resulting in its share price closing 30% lower wiping out nearly two years of gains in just one day. Walmart fell over 11% on Tuesday and another 7% yesterday due to higher costs, inventory and supply-chain issues. Given how oversold the signal charts are, at some stage the market will want to look through rate hikes and a short-term economic slowdown and start bargain hunting. Junk Bonds got slammed yesterday while the Dollar reversed some of yesterday’s rally as I patiently wait for my trifecta to kick in. If the market keeps selling off there is no chance of sustained rate rises as the Fed will then not risk a major recession but possibly a depression given the fact that we have $25 Trillion of Global Debt. I bought the S&P at an average rate of 4040 before getting stopped at 3999 and I am now flat. The S&P has support at last Thursday’s 3858 low print which has got to hold. Today, I will be a buyer from 3860/3890 with no stop for now. If I am taken long I will have a T/P level at 3938.
EUR/USD
The Euro reversed some of Tuesday’s rally as a late sell-off saw the whole of my buy range filled for a now 1.0490 average long position. I will leave my 1.0405 ‘’Closing Stop’’ unchanged while lowering my T/P level to 1.0540. If any of the above levels are hit I will be back with a new update for my Platinum Members.
March Dollar Index
The 0.9% rally in the Japanese Yen ensured the Dollar only rose 0.7% yesterday This move higher saw the Dollar hit my 103.90 sell level. I will add to this position at 104.60 with a now higher 105.25 stop. I will now raise my T/P level on this position to 103.40.
Cash DAX
As I had already bought four Indexes, I did not buy the DAX as I had enough exposure. Anyway, the DAX only sold off after the Cash Markets closed and I am still flat. I would not short the DAX as the market seems reluctant to have a meaningful sell-off. The DAX is trading at 13855 as I go to press. We have strong support from 13600/13700 where I will be an aggressive buyer with a wider 13495 stop.
Cash FTSE
The FTSE traded the whole of yesterday’s buy range and I am now long at an average rate of 7440. I will leave my 7345 ‘’Closing Stop’’ unchanged while lowering my T/P level to 7485. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Dow Rolling Contract
I cannot remember the last day that the Dow lost almost 1200 points in a single day as one long position after another got slammed. This is the eighth consecutive week of losses for the Dow as the market was not helped by Junk Bonds and Transports both making new lows for the year. This move lower saw me buy the Dow at an average rate of 32430 before thankfully getting stopped at 32145 and I am still flat. The Dow is trading at 31400 as I go to press. We have strong support from 30900/31250 where I will be an aggressive buyer with no stop for now. If I am taken long I will have a T/P level at 31630. Sentiment is still on the floor as shown by the Fear & Greed Index got hit hard yesterday, closing at 9 which is a reading of ‘’Extreme Fear’’
Cash NASDAQ 100
My NDX plan did not work well as I waited to buy the market at the bottom of my buy range at a price of 12150 before quickly getting stopped at 11995. 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 13800 which I am hopeful we will see this month. Despite how oversold the NDX is trading I will not add to my existing long position. If this changes I will be back with a new update for my Platinum Members.
June BUND
No Change. I am still long the Bund at 152.80 with the same 153.10 T/P level and same 151.65 wider stop.
Gold Rolling Contract
Gold had a quiet trading session yesterday and I am still flat. I am not crazy about the current price action as I believe a lot of Funds and Investors are trapped long above the market. I will leave 1801/1786 buy level unchanged with the same wider 1769 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. Silver has support from 20.50/21.10 where I will continue to be a buyer with a 19.95 stop.
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