Following another volatile trading session, U.S. Equity Markets reversed earlier losses to close higher on the day, led by the 1.48% rise in the NASDAQ 100. This move higher saw the VIX close lower by 3%. In Minutes released from the U.S. Federal Reserve’s early-May meeting, officials said they would need to raise interest rates by 0.50% at their next two meetings. Central bank members also noted they may raise interest rates to high enough levels to purposely fuel a deceleration in economic growth to combat surging inflation – while also approving a plan to shrink the Fed’s $9 trillion portfolio starting June 1. The information comes shortly after Fed Chairman Jerome Powell said 0.5% increases would likely be needed at the next several meetings. He emphasised that to bring down prices, the Unemployment Rate may need to rise. This position was echoed within the Minutes, indicating there could be some economic pain in the months ahead to restore price stability and maintain strong labour market conditions. Within the S&P 500 Index, nine of the 11 sectors finished higher. European Markets closed higher. The European Central Bank’s Financial Stability Review said regional asset risks have risen due to rising inflation and the increased potential for credit default. European Central Bank Governing Council member Martins Kazaks said it should be open to considering a 0.5% interest-rate increase at the July meeting. Germany’s first-quarter private consumption unexpectedly contracted but is anticipated to rebound this quarter as recent data shows services sector activity is on the rise. The National Statistics Office of France’s Consumer Confidence Index for May was weaker than expected as households were less confident about their financial situation. Japanese department-store sales growth for April was stronger than anticipated thanks to the demand for clothing and household goods. The Reserve Bank of New Zealand raised its benchmark interest rate from 1.5% to 2% to combat inflation and promote price stability. In its monthly economic assessment for May, Japan’s Cabinet Office said activity is showing signs of picking up as labour conditions are improving. People’s Bank of China Governor Yi Gang called on the country’s major banks to increase the approval and delivery of loans to boost economic output. Elsewhere, Oil closed 0.98% lower after a volatile trading session following the Energy Information Administration’s crude inventory report, while Gold closed lower by 0.73% on a stronger Dollar.
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 made 320 points yesterday and is now ahead by 3364 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 0.95% higher at a price of 3978.
The Dow Jones Industrial Average closed 191 points higher for a 0.60% gain at a price of 32,120.
The NASDAQ 100 closed 1.48% higher at a price of 11,943.
The Stoxx Europe 600 Index closed 0.8% higher.
Yesterday, the MSCI Asia Pacific Index fell 0.5%.
Yesterday, the Nikkei closed 0.26% lower at a price of 26,677.
Currencies
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.5% lower at $1.0672.
The British Pound closed 0.3% higher at 1.2576.
The Japanese Yen fell 0.3%, closing at $127.28.
Bonds
Germany’s 10-year yield closed two basis points lower at 0.94%.
Britain’s 10-year yield closed three basis points higher at 1.91%.
US 10 Year Treasury closed two basis points lower at 2.74%.
Commodities
West Texas Intermediate crude closed 0.98% lower at $108.02 a barrel.
Gold closed 0.73% lower at $1852.10 an ounce.
This morning on the Economic Front we have no Euro-Zone or U.K data. At 1.30 pm we have U.S. GDP and Weekly Jobless Claims. Finally, we have Pending Home Sales at 3.00 pm and the Kansas City Fed Activity Index at 4.00 pm.
Cash S&P 500
After I posted earlier this morning, I spent some time reviewing the made Commodity Charts that I follow. In my opinion Inflation has now topped with all major Commodities below last year’s high with the exception of Crude which is still higher. Inflation is a lagging indicator and will probably take until July before wee headline inflation lower. Given the weak data both the S&P and NDX had every chance to make new lows this week but have not and to me this is positive. The S&P made a new high for the week at 3999 before selling off 20 Handles into the close. My S&P plan again worked well yesterday with the market trading lower to my 3920 buy level before rallying to my 3941 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 3925/3955 with a tight 3909 stop. The S&P has short-term resistance from 4015/4040 where I will be a small seller with a tight 4053 stop.
EUR/USD
The Euro just missed my 1.0640 buy level with a 1.0642 low print before rallying 50 points and I am still flat. I will now lower my buy level to 1.0560/1.0620 with a tight 1.0495 stop.
March Dollar Index
The Dollar traded higher to my initial 102.30 sell level. I am still short and I will add to this position at 103.00 with the same 103.65 stop. I will now raise my T/P level to 101.90 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Cash DAX
Frustratingly, the DAX missed my initial buy level by eight points before rallying over 160 points and I am still flat. I will now raise my buy level to 13810/13890 with a higher 13735 stop.
Cash FTSE
The FTSE traded in a narrow range yesterday and I am still flat. I will not chase the market higher, leaving 7390/7450 buy level unchanged with the same 7339 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
My Dow plan worked well with the market trading higher to my 32150 sell level before selling off to my 32040 revised T/P level and I am still flat. The fact that the Dow closed over 32100 is bullish. I no longer want to be short the Dow at this time. I will now raise my buy level to 31550/31850 with a tight 31395 stop. The Fear & Greed Index is still oversold, closing last night with a slightly higher print of 13 which is still a reading of ‘’Extreme Fear’’.
Cash NASDAQ 100
No Change. 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 13400 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
The Bund rallied yesterday, and I am still flat. I will now raise my buy level to 152.70/153.40 with a higher 151.95 stop.
Gold Rolling Contract
No Change. I am still a buyer on any dip lower to 1820/1837 with the same 1808 stop.
Silver Rolling Contract
Silver traded lower to my 21.80 buy level. I will add to this position at 21.20 with the same 20.55 stop. I will now lower my T/P level to 22.30.
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