Oil prices remain the main driver for markets and as it has been the case this week the assessment of good news continue to prevail over bad ones. Oil prices took another leg higher yesterday following a US Energy Information Administration Report that showed a sharp decline in US distillate stockpiles. WTI and Brent Oil made new five month highs, jumping 3.8% and 3.4% respectively, notwithstanding news that crude stockpiles rose and that the Kuwait strike had ended. News of another oil producers meeting in May also hit the wires, but it is hard to believe this news had a meangiful impact on yesterday’s price action.
To mark my 1050th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2500 for my Platinum Service which includes 1/4 updated emails throughout the trading session. This offer is open to both new and existing members and if anyone is interested please email me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 105 points yesterday and is now ahead by 1365 points for April having made 2265 points in each of the previous two months, following a record 3365 points in January. Since I started this service last June it had made over 23,000 points.
Europe and US equity markets ended the day in positive territory with energy and financials stocks leading the way. That said not all sectors benefitted from the oil induced improvement in sentiment. Coca Cola shares were one of the notable losers, dropping 4.8% after it announced a decline in revenue and profits in Q1.
The risk on sentiment pushed core Global Yields higher with the move further boosted by better than expected US Housing data. March Existing Home Sales rose to 5.33M from 5.07M in February, confirming a rebound to trend after February’s drop. 10 Year Bund Yields ended the day +1.5bps while US Treasury Yields rose 8.5bps to 1.85%.
In currencies the US Dollar is stronger across the board barring the oil linked CAD and NOK. The strength in the US Dollar has not only been aided by a jump in US Bond Yields, EUR and JPY weakness have also played a hand. The EUR was weighed down by position squaring ahead of the ECB Meeting this afternoon, while the Yen appears to have been helped by the improvement in risk sentiment and the anticipation of further easing by the BoJ next week. Despite the fact that commodities had a good day with Iron ore in particular gaining another 3.8% to $64.80, the strength of the US Dollar was too much for the AUD which closed nearly 0.5% lower. The VIX closed back above 13 after at one stage making a new 8 month low at 12.5. Sterling closed down 0.5%, notwithstanding the latest poll on the forthcoming EU Referendum nudging in the direction of the UK remaining in the EU.
This morning on the economic front we have UK Retail Sales at 9.30 am. This is followed at 12.45 pm by the latest ECB Meeting, where in contrast to last month, this time no changes are expected in Interest Rates or QE. Following last month’s cut in rates and increase in Monthly Asset Purchases on top of the inclusion of Corporate Bonds in the bond buying programme the task now for the ECB lies more along the lines of promoting the effectiveness of these new expansionary policies and assertion that the ECB can do more if needed. At 1.30 pm we have the Dragi press conference and I have no doubt he will try and talk the Euro lower. At the same time the US will release its latest Weekly Jobless Claims, Philly Fed Business Outlook and the Chicago Fed National Activity Index. Next we have the US FHFA House Price Index at 2.00 pm. Finally we have the Euro-Zone Consumer Sentiment and US Leading Index at 3.00 pm.
June S&P 500
The S&P traded higher to a high of 2105 before selling off into the close. As I wanted to be flat ahead of the ECB today I emailed my Platinum Members that after I went short the S&P at 2100 to cut this position at 2098 and I am now flat. On nearly every indicator that I follow the S&P is overvalued while at the same time trading at the top of its Bollinger Band and Williams Index. At the same time despite the US Indices within touching distance of their all-time highs the internals as shown by the McClellan Oscillator continues to be weak. However after Monday’s upside Key Day Reversal it is difficult to be short the market for more than a few hours. Today I will again look to sell the S&P on any further rally higher to 2109/2115 with a 2120 stop. My Only interest in buying the market is on a dip lower to 2078/2083 with a 2073 tight stop as the 2080 area should be good initial support to any sell-off.
EUR/USD
Late in the New York trading session the Euro traded lower to my 1.1295 buy level. I am still long and as I want to be flat ahead of the ECB and Dragi I will look to cut this position at 1.1310 or higher – either way I will be out before 12.45 pm. Following the Dragi press conference I will look to buy the Euro on any dip lower to 1.1150/1.1190 with a 1.1115 stop. Despite the negative price action over the past week I do not want to be short the Euro at this time.
June Dollar Index
I am still flat the Dollar and today I will now raise my sell level to 95.20/95.50 with a 95.80 stop.
June DAX
Wow the DAX is now trading nearly 900 points higher off its low last Monday morning following the failure of the Doha talks. Thankfully we have not tried to sell this market this week as yet again this rally proves when we have an important event looming the markets always rally into these announcements. This move higher sees the DAX at extremely overbought levels and today I will use any further rally to 10550/10610 to go short with a 10670 stop. I do not want to be long the DAX at this time.
June FTSE
Just before the New York close the FTSE traded higher to my 6380 sell level. Even though the FTSE is the weakest of the main Indices that I cover I emailed my Platinum Members to exit this position at 6365 and I am now flat. Today I will again look to sell the FTSE on any rally higher to 6430/6470 with a 6505 stop. The price action is telling me not to go long the FTSE at this time.
Dow Rolling Contract
The Dow also rallied to my average sell level at 18145 and just like the S&P and FTSE I did not want to have a position ahead of today and I cut this position at my revised T/P level at 18110 and I am now flat. The Dow has strong resistance from 18200/18300 and today I will be a seller from 18210/18270 with an 18330 stop. Given how overbought the Dow is trading I do not want to be long the market at this time.
June BUND
My Bund plan worked well as yesterday the Bund traded higher to my 163.70 sell level before having a nice sell off which enabled me to cover this position at my 163.35 T/P level and I am now flat. Today I will again look to sell the Bund on any rally higher to 163.90/164.40 with a 164.75 wider stop. I still do not want to be long the Bund at this time.
Gold Rolling Contract
I must say I still do not trust this Gold rally. I am still flat and today I will lower my buy level slightly to 1223/1231 with a 1216 stop.
Silver Rolling Contract
No change as I am still a buyer on any dip lower to 16.40/16.70 with a 15.95 stop.
Recent Comments