Yesterday saw a sell-off in commodity currencies, with the Australian Dollar feeling the brunt of the selling closing down a hefty 1.30% versus the US Dollar to finish at the bottom of the G10 FX Leader board, in the face of weaker commodity prices, somewhat jittery equity markets and hints for a renewed appetite for the US Dollar as both the Euro and Sterling sold off in the wake of the Brussels terrorist attacks. Gold fell nearly 3.0% and is currently trading at $1216 well off its Tuesday high at $1260.
To mark my 1000th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2500 for my Platinum Daily Commentary which includes 1/4 updated emails throughout the trading day. 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 lost 30 points yesterday but is still ahead by 1935 points for March having made 2265 points in February and a record 3365 points in January. Since I started this service last June it has made over 21,500 points.
With the London markets closed tomorrow and Monday for the Easter Holidays, my next Daily Commentary will be on Tuesday morning. I would like to take this opportunity to wish all my members a happy and safe Easter break and to thank everyone for their continued support.
Commodity weakness was led by softness in oil prices yesterday in the wake of the Weekly US EIA Report data showing that US Crude Inventories rose a much larger than expected 9.36 million barrels last week. The forecast was only for a rise of 2.3 million barrels. WTI crude was trading at $41 a barrel before the release of the data, then fell back to close at $39.75, for a net decline of 4.1% on the day. This morning WTI is opening another 1% lower. Meanwhile the other Commodity set seemingly breaking a better patch of support of late was Iron ore and steel with the former closing over 1% lower at $57 to be well off its recent $67 high print. To compound the problem Dalian Iron Ore Futures closed a cool 5.2% lower yesterday while China’s steel rebar futures gave back over 3%. The LMEX Base Metals Index closed 1.7% with Copper off 2.30% and Nickel down 1.08%. There is no doubt this was a brutal sell-off on high volumes.
In other news, the St. Louis Fed President James Bullard did a Bloomberg TV interview, with one particular comment grabbing the market’s attention: ‘you get another strong jobs report, it looks like labour markets are improving, you could probably make a case for moving in April’. Of course he voted with the pack for no change. This gave the US Dollar some measure of support though pricing for a hike in April was not beefed up, held back by a soft equity market with bonds bid.
This trend is continuing with European markets opening weaker following the near 1% fall in the Nikkei to close again below its key 16900 pivot point despite USD/JPY trading at 113.
This morning on the economic front we have UK GDP and Mortgage Approvals at 9.30 am. At 10.00 am we have Euro-Zone CPI. This is followed at 12.30 pm by US Weekly Jobless Claims and Canadian GDP. Finally we have the ISM Milwaukee and the Chicago Purchasing Manager’s Survey at 1.00 pm and 1.45 pm respectively.
June S&P 500
After five straight weeks of gains we saw some semblance of reality as the stock market finally took a breather yesterday. This sell-of was pre-warned by the behaviour of the McClellan Oscillator which has seen the internals weaken over the past week despite the markets rising on narrow leadership and low volume. Interestingly the MO which was trading at +200 only a few days ago closed yesterday with a negative -3 print. My S&P plan worked well as no matter where you bought the market once it hit my buy level, twice you had at least a 5/6 Handle rally before the market sold off in the last 30 minutes of trading. As I had lost money in both Gold and Silver and was facing a bad trading day I emailed my Platinum members to cover their 2034 long S&P position at 2037 and I am still flat. There is no doubt that this market is the most overvalued and manipulated market that I have seen in my trading lifetime but the problem is we do not know when this party will end as the Central Banks have so much money invested in these markets. The S&P has very strong resistance at the 2040/2050 area while at the same time we have a large ‘Open Gap’ below from 1974/1989 in the June Contract. If the market trades lower over the coming days I would be a very aggressive buyer in this ‘Gap’ with a 1969 stop. Today I will look to sell the S&P on any rally higher to 2034/2040 with a 2046 stop. My only interest in buying the market today is on a further dip lower to 2007/2013 with a 2002 stop. If I am taken long and subsequently stopped out I will use my 5 Handle Rule’ to go long again with a stop below whatever new low is printed.
Finally I would like to apologise for the short commentary yesterday due to a severe migraine attack
EUR/USD
No change as I am still long the Euro from yesterday morning at 1.1180 with the same tight 1.1145 stop. If I am stopped out of this trade I will be a more aggressive buyer in front of 1.1110 with a 1.1065 stop. Despite the negative price action over the past few days I still do not want to be short the Euro following the series of upside Key Day Reversals over the past few months.
June Dollar Index
Overnight the Dollar traded higher to my 96.35 sell level. I am still short and this morning I will lower my stop on this position to 96.70.
June DAX
My DAX plan worked well yesterday with the market eventually hitting my 10010 buy level after lunch before having a nice rally to 10080 which enabled me to cover this position at 10050 as outlined earlier to my Platinum Members and I am now flat. This morning the DAX is following the other markets lower and today I will again look to buy the DAX on any further dip to 9840/9890 with a 9785 stop. If I am taken long the DAX and I am not stopped out or mange to cover for a gain I will cut and be flat over the long weekend especially given the ongoing terrorist risk which we unfortunately have to again factor into our trading equation.
June FTSE
The FTSE plan also worked well as just like the DAX above the FTSE also traded lower to my 6110 buy level after lunch before having a nice rally to 6143 which enabled me to cover this position at my 6135 T/P as emailed earlier to my Platinum Members and I am now flat. With the FTSE closing this evening until early Tuesday morning my only interest in the FTSE will be a Day trade by buying the market on any dip lower to 6010/6040 with a 5985 stop. Given the continued weakness of Sterling I still do not want to be short the market at this time.
Dow Rolling Contract
I am still flat the Dow which as mentioned in the S&P above is finally seeing some profit-taking after its near 2300 point run higher over the previous five weeks. Today I will lower my sell level to 17580/17640 with a 17710 wider stop. Naturally I still do not want to be long the Dow at this time despite the positive price action which has been completely manipulated in my opinion.
June BUND
I have waited to sell the Bund until this morning which I have just done so here at 163.15. I will leave a tight stop at 163.45 which is just above the contract high made post the ECB two weeks ago and from where we had the massive downside Key Day Reversal. If I am stopped out of this position I will be a more aggressive seller in front of 163.60 with a 164.05 stop. The incredible low pricing of the Yield for the Bund tells you how weak these European Economies are and certainly do not justify the high valuations currently prevailing in the stock market.
Gold Rolling Contract
Thankfully I had a tight stop on my long 1236 Gold position taken early yesterday morning as I was stopped out shortly after I posted at 1229 and I am now flat. While it is never nice to get stopped out of a position the fact that we are currently trading at 1216 having hit a 1210 low overnight certainly makes the pain less. I am still flat and today my only interest in buying Gold is in front of its next key support at 1185/1195 buy looking to buy the market from 1191/1199 with a 1183 stop. A break and close below 1180 could see an acceleration lower.
Silver Rolling Contract
Silver had a bad trading session yesterday by closing over 3% lower and in the process stopped me out of my latest 16.00 long position at 15.45. As I hate to be flat Silver I re-bought the market at 15.25. I am still long and I will leave a 14.80 stop on this position.
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