A session which lacked fresh macro catalysts saw US equity futures lower, with higher yields once again acting as a headwind for stocks. The docket was quiet, but a 7 Year Treasury Auction catalysed another sell-off in Treasuries, resulting in the curve bear steepening again. Amid a lack of Fedspeak, attention is moving towards US PCE inflation data out on Friday; overnight, Australia saw higher than expected CPI metrics, while German HICP topped expectations (though has not diminished the prospects of an ECB rate cut next week); the US PCE data on Friday is expected to show a cooling, analysts have said, following signals from the PPI and CPI data for the month. The Fed’s Beige book was digested without much fanfare and noted that national economic activity expanded from early April to mid-May, with varying conditions across industries and Districts; most Districts reported slight or modest growth, while prices increased modestly. Traders will be looking to comments from the Fed’s Williams on Thursday, as well as an appearance from the Fed’s Logan; data-wise, a second look at Q2 GDP and Weekly Claims data will be released. After Tuesday’s weak 2 Year and 5 Year Auctions, the 7 Year experienced a similar dynamic, with front-end/belly buyers perhaps sat on the sidelines ahead of PCE on Friday. The 4.650% high yield tailed the when-issued yield by 1.3bps, a fatter tail than the prior auction which came in on the screws, and larger than the six-auction average tail of 0.5bps. The bid cover of 2.43x is softer than both the prior and six-auction average. On the breakdown, direct demand fell to 16.1% from 21.0%, similar to the 5 Year Auction on Wednesday, whereas indirect demand ticked higher slightly to 66.9% from 65.1%. The fall in direct demand resulted in dealers taking home 17% of the auction, a larger proportion of the prior 13.9%, but beneath the six-auction average of 21.3%. Elsewhere, Oil fell 0.94% while a strong Dollar saw Gold end Wednesday with a loss of 0.8%.
To mark my 3000th 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 140 points yesterday and is now ahead by 1721 points for May, having finished April with a gain of 4010 points after ending March with a gain of 2113 points. February closed with a gain of 1606 points, after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 points, after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 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 0.74% lower at a price of 5266.
The Dow Jones Industrial Average closed 411 points lower for a 1.06% loss at a price of 38,441.
The NASDAQ 100 closed 0.70% lower at a price of 18,736.
The Stoxx Europe 600 Index closed 1.08% lower.
Yesterday, the MSCI Asia Pacific closed 0.2% higher.
Yesterday, the Nikkei closed 0.77% lower at a price of 38,556.
Currencies
The Bloomberg Dollar Spot Index closed 0.48% higher.
The Euro closed 0.4% lower at $1.0809.
The British Pound closed 0.3% lower at 1.2701.
The Japanese Yen fell 0.3% closing at $157.65.
Bonds
Germany’s 10-year yield closed 8 basis points higher at 2.68%.
Britain’s 10-year yield closed 13 basis points higher at 4.41%.
U.S.10 Year Treasury closed 7 basis points higher at 4.61%.
Commodities
West Texas Intermediate crude closed 0.94% lower at $79.08 a barrel.
Gold closed 0.7% lower at $2339.10 an ounce.
This morning on the Economic Front we have Euro-Zone Economic Sentiment Indicator at 10.00 am. Next, we have U.S. Weekly Jobless Claims, GDP, Wholesale Inventories, Trade Balance and PCE at 1.30 pm. Finally, we have speeches from Fed Members Williams and Logan at 5.05 pm and 7.30 pm respectively.
Cash S&P 500
So far, the S&P has not confirmed the Dow’s aggressive decline with prices still above the May 26 low at 5257. However, Breadth was weak yesterday, with the NYSE Advance/Decline Ratio of negative 5 to 1 as 82.2% of the Big Board Volumes occurring as down volume. After the Cash Market closed, selling continuing with the S&P now trading at a price of 5251 as I go to press. The main reason why the Dow is stronger that either the NDX or S&P is because of one stock NVIDIA which is not one of the Dow’s 30 Members. The $2.8 trillion Market Cap on this one stock is larger than the entire Market Cap of the German Stock Market. Nvidia accounts for approximately 39% of the S&P 500’s gain year to date. Since last Thursday’s earnings Nvidia has tagged on an extra $1/2 trillion in market cap. Despite all three American Indexes closing lower yesterday, Nvidia still managed to close Wednesday with a 1% gain. My S&P plan worked well as the market traded lower to my 5267-buy level before thankfully rallying to my 5281 T/P level as emailed to my Platinum Members and I am now flat. The S&P has strong support from 5212/5227 where I will be an aggressive buyer with a tight 5198 ‘’Closing Stop’’. A number of key Moving Averages come in between 5200 and 5220 and I would expect any initial tag to attract strong buying. I no longer want to be short the S&P at this time as Month-End is tomorrow ahead of the seasonally strong first week of June. If this view changes, I will be back with a new update for my Platinum Members.
EUR/USD
The strong Dollar saw the Euro hit my 1.0810 buy level. I am still long with a now lower 1.0860 T/P level. I will add to this position on any further move lower to 1.0740 with the same 1.0695 ‘’Closing Stop’’.
Dollar Index
I am still flat the Dollar. This morning the Dollar is trading higher at 1.0510. I will continue to be a small buyer on any dip lower to 103.60/104.30 with the same 103.15 tight ‘’Closing Stop’’. I still do not want to be short the Dollar at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash DAX
European Equity Markets got hit hard yesterday following the higher-than-expected German CPI. This move lower saw the whole of my buy range triggered for a now 18490 average long position. The DAX is short-term oversold. I will now lower my T/P level to 18550 while leaving my 18375 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash FTSE
The FTSE traded in a narrow range albeit at lower prices. Yesterday’s move lower saw my 8190-buy level triggered. I am still long with a now lower 8240 T/P level. I will add to this position at 8130 while leaving my 8075 ‘’Closing Stop’’ unchanged.
Dow Rolling Contract
The fractured behaviour of U.S. Stock Indexes remains intact as the Dow Jones Transportation Average just made a new low for the year. Yesterday’s move lower saw my second buy level at 38550 triggered for a now 38665 average long position. Although the Dow closed at 38440 last night, we are now trading 250 points lower at 38180 as I go to press. The Dow is even more oversold given yesterdays and this morning’s sell-off. I continue to hold my Dow long position against my short NDX position. I will leave my 38395 ‘’Closing Stop’’ unchanged for now and see how today’s trading unfolds. I will now lower my T/P level on this position to 38750. If any of the above trades are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
No Change: Despite the aggressive sell-off in the Dow, the NDX reversed Thursday’s sell-off, by closing 1% higher on Friday at a price of 18808. With the NDX having rallied almost 11% in just three weeks I just cannot be a buyer of the market at these levels. I am still short at an average rate of 18385. I don’t normally add to a position that is ‘’offside’’ but I will look to sell the NDX again on any further move higher to 18980 with the same no stop policy for now. I will leave my T/P level on this position unchanged at 18320. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
March BUND
Higher Treasury Yields saw the Bund fall 80 points yesterday from Tuesday’s close. This move lower saw the whole of my buy range triggered for a now 129.15 average long position. I will leave my 127.95 ‘’Closing Stop’’ unchanged while lowering my T/P level to 129.80.m If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
I am still flat Gold, refusing to chase the market higher. Ahead of today’s key Economic data, I will now lower my Gold buy level to 2303/2318 where I will be a buyer with a lower 2289 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2332.
Silver Rolling Contract
I am still flat Silver. As a result of the stronger Dollar, I will not chase the market higher leaving my 30.00/31.00 buy level unchanged with the same 29.15 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 31.80.
Please Note. As Monday is a bank holiday in Ireland, my next Daily Commentary will be on Tuesday June 4. Any of my calls that are not hit today and are subsequently triggered either tomorrow or Monday will see me return with updated emails for my Platinum Members.
Recent Comments