U.S. Equity Markets climbed back into bullish territory on optimism for another round of stimulus and an eventual move toward reopening the economy. Oil surged amid expectations for production cuts. The benchmark S&P 500 Index jumped 3.4%, sending the gauge more than 20% over its March 23 low, which tradition says signals a bull market. Real Estate, Energy and Utilities led the gains in all 11 market sectors. The Dow Jones Industrial and Nasdaq Composite Indexes also rose to almost four-week highs. Oil spiked a few minutes ahead of the close after Algeria confirmed that the OPEC+ emergency meeting will discuss an output cut of 10 million barrels per day. A spokeswoman for Russian Energy Ministry said the Nation will commit to cuts based on its proportion of the total production. Earlier, Anthony Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases, said the start of a turnaround in the fight against the Coronavirus could come after this week. President Donald Trump tweeted about reopening sooner rather than later. The Stoxx Europe 600 Index ended little changed after Euro-Area Finance Chiefs failed to agree on a $540 billion economic package to respond to the pandemic. While stocks are rallying, many investors remain reluctant to take big risks while forecasts are for the virus to grow rapidly in some of the biggest economies — the U.S., Japan, Germany, France and the U.K. They are also concerned that fiscal stimulus measures will be too late or not enough. Elsewhere, Italian Bonds took a hit and the Euro headed for its seventh drop in eight days against the US Dollar as the officials struggled to reconcile visions for how to recover from the virus. France’s First-Quarter output shrank the most since World War II, the latest indicator of the severity of the shock to the world’s biggest trading region.
To mark my 2050th 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 47 points yesterday and is now ahead by 1563 points for April, having made an incredible 9264 points in March, 2223 points in February, 2142 points in January, 818 points in December, 780 points in November, 1649 points in October, 1620 points in September and 2387 points in August 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
The S&P 500 Index closed 3.4% higher, at a price of 2750.
The Dow Jones Industrial Average rose 3.1%, closing at a price of 23,433.
The Stoxx Europe 600 Index was flat.
The MSCI Asia Pacific Index increased 1.9%, the highest level in four weeks.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index was little changed at 1256.
The Euro fell 0.3% to $1.0855.
The British Pound rose 0.4% to $1.2381.
The Japanese Yen strengthened 0.1% to 108.86 per dollar.
Bonds
The yield on 10-year Treasuries rose four basis points to 0.76%.
Germany’s 10-year yield increased one basis point to -0.30%.
Britain’s 10-year yield fell three basis points to 0.39%.
Commodities
Gold weakened 0.1% to $1,646.30 an ounce.
West Texas Intermediate crude gained 11.1% to $26.30 a barrel.
This morning on the Economic Front we already had the release of the UK Trade Balance which came in at -11.6 Billion versus +5 billion expected. UK GDP for February was also released coming at -0.1% versus +0.1% expected. At 12.30 pm we have the ECB Minutes from last month’s Meeting. This is followed at 1.30 pm by the U.S. Weekly Jobless Claims and PPI. Also, at the same time we have Canadian Unemployment and Average Earnings. Finally, at 3.00 pm we have the University of Michigan Consumer Sentiment and Wholesale Inventories.
June S&P 500
Headlines that a new Bull Market has started is exactly what we need to see as optimism returns and traders get bullish. Remember Bear Market rallies end on optimism, not pessimism, so yesterday’s headline is compatible with the progressing structure of this Phase 2 of the ongoing Bear Market. The S&P is trading at 2745 close to my optimum target of 2770/2810 where members who are still fully invested in their pensions in equities should reduce some of this risk and go to cash. The S&P is severely overbought after a massive 580 Handle rally since the low of 2170 on March 23. The McClellan Oscillator closed at +280 which is near record levels. Remember a reading of +250 in the MO is a warning sign for a bearish turn in the US Indices. In my opinion, it is going to take a lot of time to re-open the US Economy fully as the last thing we need to see is the virus increasing after social interaction returns. Remember we still have no vaccine and this will probably take 12 months before one is available to the general public. Given the volatility it is risky to have an overnight position. Just before the close the S&P traded higher to my initial 2740 sell level before selling off to an overnight low at 2721. I did not take this trade myself as I cancelled my sell levels in the US Indices per an updated email to my Platinum Members at 8.00 pm. Today I will be a seller from 2782/2815 with a 2832 stop. With the European Markets closed tomorrow and Monday it is difficult to have a position over the weekend. However, the US Markets although closed tomorrow will be open for a full session on Monday. My only interest in buying the S&P is from 2600/2640 with a 2575 stop. This may seem far away from current pricing but with long-term players in the market after March saw a close below the 55 Month EMA, Short-Term traders have a difficult time with the risk/reward, thus the added volatility. The VIX is still very high, only falling 7% yesterday to close at a price of 43.35.
EUR/USD
Frustratingly the Euro missed my 1.0915 sell level by 10 points before selling off to trade at 1.0860 this morning. Ahead of the ECB Minutes I will leave my 1.0915/1.0965 sell level unchanged with the same 1.1005 stop.
June Dollar Index
My Dollar plan worked well with the Dollar trading lower to my 100.00 buy level before rallying to my revised 100.22 T/P level and I am now flat. Today I will be a buyer of the Dollar from 99.10/99.60 with a 98.65 stop.
June DAX
The DAX just missed my 10150 buy level with a low of 10178 before the market rallied and is trading 340 points higher at 10518 this morning. If you did buy in front of my buy range and are still long I would take your gain here and go flat. Today I will be a small buyer on any dip lower to 10200/10280 with a 10995 stop. Ahead of the long week-end I do not want to be short the DAX at this time.
June FTSE
This morning the FTSE having just missed my 5560 buy level yesterday by a few points has rallied to my sell range this morning. I have gone short at 5780. I will add to this short position at 5860 with a tight 5915 stop. I will now raise my T/P level on this short position to 5710 and if any of above levels are triggered, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
The Dow did trade the whole of my sell range into last night’s close. For Members who did take this trade, which would have put you short at an average rate of 23450, the market fell to an overnight low at 23281 which hopefully gave you a nice gain. As mentioned in my S&P commentary above I did not take this trade myself and I am still flat. Ahead of the long-weekend I will try where possible to have no equity exposure and be flat in my five Indices. Today I will raise my Dow buy level to 22200/22500 with a 21985 stop. If I am taken long I will have a T/P level at 22750. The Dow has now closed its March 11, ‘’Open Gap’’ at 23553. We have small resistance from 23890/24150 where I will be a seller with a 24325 stop. If I am taken short I will have a T/P level at 23640.
June NASDAQ
I am still flat the NASDAQ which lagged the other main US Indices yesterday. The NASDAQ has strong resistance from 8450/8600 where I will be an aggressive seller with a 8720 stop. My only interest in buying the market is on a dip lower to 8030/8120 with a 7950 stop.
June BUND
Late yesterday the Bund traded lower to my 170.20 buy level before rallying this morning to my revised 170.45 T/P level and I am now flat. With the Bund closed this evening until Tuesday morning and the fact that the spread betting firms do not quote the Bund out of hours I am going to stand aside until the market reopens at 7.00 am on Tuesday.
Gold Rolling Contract
The Daily Sentiment Index has risen to over 90% bulls for Gold. It is no surprise that Gold is struggling to rally as mentioned in yesterday’s commentary. I will continue to stand aside until normal conditions return for the precious metal.
Silver Rolling Contract
No Change as I am still a seller from 15.75/16.25 with the same 16.65 stop.
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