Major U.S. Indexes rose to all-time highs in thin trading ahead of the Four of July holiday helped by the rally in global bonds as investors weighed the prospect of more dovish appointees to two of the world’s major central banks. The Dow Jones Industrial Average notched its first record since October, while the S&P 500 climbed a fifth day to extend its high. Futures on the broader Index briefly topped 3,000 for the first time. The Nasdaq Indexes rose past closing records set in early May. Stock investors piled into high dividend-yielding sectors like utilities and REITs after 10-year Treasury yields dipped to the lowest since November 2016 on rising market bets that the Federal Reserve will cut rates this month. The US Dollar fell after Jobless Claims came in broadly as forecast and private hiring numbers missed expectations. A reading on the services sector fell to the lowest since 2017, but Wednesday’s batch of data did little to move markets, with jobs numbers coming tomorrow. The Euro erased a small drop as purchasing manager data for the region was revised slightly higher. Europe’s leaders have nominated Christine Lagarde to take the helm of the ECB later this year, where most economic analysts anticipate will take up departing President Mario Draghi’s mantle in providing stimulus. And U.S. President Donald Trump said he’s planning to nominate Christopher Waller and Judy Shelton to serve on the Fed Board, candidates both seen as likely to advocate lower interest rates.
To mark my 1850th 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@tradernoblecom for details
For anyone following my Platinum Service it made 86 points yesterday and is now ahead by 298 points for July, having made 1346 points in June,1722 points in May, 955 points in April, 1027 points in March, 1013 points in February and 1671 points in January. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Equities
We have seen continued doubt and worry over this bull market for a decade now, yet it continues to defy all skeptics. The bottom line is the dual benefit of both fiscal and monetary policy should help extend this business cycle potentially much longer than many expect. The S&P 500 Index closed 0.8% higher at 2995, hitting the highest on record with its fifth straight advance. The Dow rose 0.7% for its first record since Oct. 3. In Europe, the Stoxx Europe 600 Index jumped 0.8%, reaching the highest in almost 13 months on its fifth consecutive advance and the biggest increase in more than two weeks. The FTSE closed 0.5% higher to hit it highest level in 12 months.
Currencies
Here is a summary of the main changes in F.X. Markets:
The Bloomberg Dollar Spot Index decreased 0.1%, the biggest dip in more than a week.
The Euro increased less than 0.05% to $1.1282.
The Japanese yen climbed 0.1% to 107.82 per dollar, the strongest in more than a week.
Bonds
The yield difference between Italian 10-year government bonds and the equivalent German securities fell to below 200bps for the first time since May 2018 after the European Commission deciding not to penalize Italy for breaking government spending limits. An absence of inflation, the shortages of ‘safe’ positive yielding bonds that is a legacy of QE, geopolitical concerns and a dovish monetary policy bias almost everywhere are seeing the bond rally go on, and on. The yield on 10-year Treasuries declined two basis points to 1.95%, the lowest in more than two years. In Europe, Italy’s 10-year rate fell 25 basis points to 1.58%, while Germany’s 10-year yield dipped two basis points to -0.38%, hitting the lowest on record with its fifth straight decline.
Commodities
Oil rebounded after tumbling Tuesday, with West Texas Intermediate crude gaining 1% to $56.82 a barrel. Gold futures increased 0.8% to $1,419.30 an ounce, the highest in more than a week. Meanwhile the price action in Bitcoin is insane with the market trading at $9600 yesterday when I posted before rallying $2100 to sit at $11700 this morning.
This morning on the Economic Front we have Euro-Zone Retail Sales at 10.00 am. With the U.S. Markets closed for Independence day we have no other data of note as the market waits for the Non-Farm Payrolls tomorrow.
September S&P 500
The S&P traded to a high of 3006 overnight. I am now short at an average rate of 3000 as the market traded the whole of my 2995/3005 sell range as outlined in yesterday’s commentary. We are getting closer to my 3020/3070 target level for the S&P as first mentioned here 18 months ago. Momentum for the rally is waning as shown by the fact that percentage of S&P stocks making new 52-week highs has registered a succession of lower highs relative to the Index itself over the past month. The Daily Sentiment Index closed at 88% bulls last night close to the 90%+ required to say that we are close to at least a temporary top. Against all of this the U.S Markets are closed today and trading desks will be lightly manned tomorrow despite the fact that it is NFP Day. There is every chance the S&P could rally further given the lack of liquidity. I have now covered my short position here at 2998 and I am now flat. I will look to sell the S&P from 3012/3025 with a 3034 stop. The S&P has initial support from 2970/2980 and I will be a buyer on any dip to this area with a 2962 tight stop.
EUR/USD
No Change as I am still a buyer on any dip lower to 1.1210/1.1250 with the same 1.1170 stop.
September Dollar Index
No Change as I am still a buyer from 95.50/95.90 with a now lower 95.15 stop.
September DAX
With Bund Yields at -38 basis points investors have no choice but to put funds to work in the German Stock Market as they have to chase a dividend. Despite the much weaker economy it is hard to see the logic. However until the DAX breaks and closes below 12400 the market will continue to be a buy on dips. I am still flat the DAX and today I will raise my buy level to 12480/12540 with a 12425 stop.
September FTSE
After the FTSE traded higher to my initial 7550 sell level I emailed my Platinum Members to exit this short position at 7539 and I am now flat. The FTSE is severely overbought and today I will again look to sell the market from 7585/7635 with a 7665 stop.
Dow Rolling Contract
The Dow finally broke above its October 3, 2018 high of 26951 to close at 26966 in yesterday’s shortened pre-holiday trading session. The October closing high was much lower at 26800 so finally the negative divergence between the Dow and S&P is broken. The drop in the 10-year Treasury to 1.95% saw investors pile into the stock market again. I am still flat the Dow which has strong resistance from 27180/27350 where I will be a seller with a 27430 stop. Despite the Dow making new highs I no longer want to be a buyer of the market at this time.
September NASDAQ
My NASDAQ plan worked well with the market trading higher to my 7870 sell level before selling off to my 7840 T/P level and I am now flat. Back on June 3, the DSI for the NASDAQ was at 9%, signalling the huge rally we have seen over the past five weeks. Last night the DSI closed at 90%, thus indicating that this rally is close to being over. Today I will again look to sell the market from 7930/7970 with a 8010 stop.
September BUND
My latest 173.80 short position worked well with the Bund trading lower to my 173.55 T/P level and I am now flat. Today I will again look to sell the Bund from 173.90/174.30 with a 174.65 stop.
Gold Rolling Contract
I am still flat Gold and today I will now lower my buy level to 1395/1405 with a 1388 stop.
Silver Rolling Contract
Silver traded lower to my 15.25 buy level as the market continues to underperform the rally in Gold. I will now raise my stop on this position to 14.90. I will also lower my T/P level on this position to 15.40.
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