U.S. Equity Markets again closed flat on Monday as markets go ‘’on hold’’ ahead of this afternoon’s PPI and CPI data tomorrow. Equity futures ground higher in pre-market trade before selling off at the open with lows in stocks later seen in the US afternoon, seemingly on account of an underwhelming Open AI Spring Update, which announced Chat GPT-4o (which will be free), briefly weighing on chip names and Microsoft (MSFT), while Google (GOOGL) caught a bid on the lack of search engine announcement. The moves then pared to see the S&P at the unchanged level by market close. Treasuries also saw a bid throughout the morning with 10 Year finding resistance at 109-00 before paring ahead of New York Fed SCE, which ultimately saw inflation expectations in the 1 and 5-Year hotter than the prior, extending the selling pressure before chopping into settlement. Similar was seen with the Dollar, which moved off lows after the NY Fed inflation expectations although the Japanese Yen and Swiss Franc lagged while Antipodes and the Canadian Dollar were flat. Sterling outperformed ahead of key labour market data with Cable also back above the 200 Day Moving Average at 1.2540. Crude prices attempted to reverse some of the Friday downside while Gold prices completely pared Friday’s upside. Elsewhere, Meme stocks (GME, AMC) surged on the return of “TheRoaringKitty” on X (formerly Twitter). Aside from the NY Fed Survey, Fed’s Jefferson spoke but largely echoed Fed Chair Powell, there are a slew of Fed speakers scheduled for the week and plenty of tier 1 data, including US PPI on Tuesday, with US CPI and Retail Sales on Wednesday. Meanwhile Fed Vice-Chair Jefferson said that the economy has made a lot of progress and inflation has retreated; the labour market has been resilient. He views the economy as in a solid position, but noted the decline in inflation has attenuated and that inflation is a source of concern. Jefferson added he is focused even more so on inflation given the broader strength in price pressures, and that it is appropriate that the Fed maintains the policy rate in restrictive territory, noting it is important to look for more evidence that inflation is abating. Jefferson also stressed that it is appropriate to keep the policy rate restrictive until it is clear that inflation is ebbing. Elsewhere, Oil rose 0.97% while Gold ended Monday with a 1% loss.
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For anyone following my Platinum Service it made 160 points yesterday and is now ahead by 1332 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 0.02% lower at a price of 5221.
The Dow Jones Industrial Average closed 81 points lower for a 0.21% loss at a price of 39,431.
The NASDAQ 100 closed 0.21% higher at a price of 18,198.
The Stoxx Europe 600 Index closed 0.02% higher.
This Morning, the MSCI Asia Pacific closed 0.4% higher.
This Morning, the Nikkei closed 0.46% higher at a price of 38,356.
Currencies
The Bloomberg Dollar Spot Index closed 0.07% lower.
The Euro closed 0.1% higher at $1.0787.
The British Pound closed 0.2% higher at 1.2554.
The Japanese Yen fell 0.2% closing at $156.20.
Bonds
Germany’s 10-year yield closed 1basis points lower at 2.51%.
Britain’s 10-year yield closed 4 basis points higher at 4.21%.
U.S.10 Year Treasury closed 2 basis points lower at 4.48%.
Commodities
West Texas Intermediate crude closed 0.97% higher at $79.02 a barrel.
Gold closed 1% lower at $2337.10 an ounce.
This morning on the Economic Front we already had the release of German April final CPI which rose 2.2% as expected. Next, we have German and Euro-zone ZEW Surveys at 10.00 am. At we have the U.S. NFIB Small Business Optimism Index at 11.00 am, followed by PPI at 1.30 pm. Finally, we have a speech from Fed Member Cook at 2.10 pm and Fed Chair Powell at 3.00 pm.
Cash S&P 500
Do you remember the “meme stock” mania from early 2021? That is when shares of companies like video-game chain GameStop (GME) and cinema operator AMC Entertainment (AMC) soared as retail investors squeezed Wall Street firms that were heavily short the stocks. Well, for another day at least, this story was back in full force. Yesterday, GameStop shares closed 75% higher, at around $30. They shot up by 110% in the first hour of trading, resulting in estimated unrealised losses totalling around $1 billion for short sellers. The catalyst? This is going to sound ridiculous, but it is the world we live in… It’s the “return” of Keith Gill, aka “Roaring Kitty,” to public life on the Internet. He is the guy and persona most responsible for orchestrating the GameStop short squeeze several years ago using the Reddit message board WallStreetBets. On Sunday night, Gill posted a sketch of a man “locking in” – as in getting ready to trade – on social media. This image has been viewed 19 million times on Twitter alone. That was it. That was apparently enough to send shares of GameStop and other vintage “meme stock” names like AMC up by double digits yesterday. Apart from ‘’meme stocks’’ it was a quiet session. The S&P rallied to my 5238 sell level before falling 20 Handles. This move lower saw my revised 5226 T/P level triggered and I am now flat. The S&P has resistance from 5245/5261 where I will again be a seller with a higher 5275 ‘’Closing Stop’’. I still do not want to be long the S&P at this time until we at least see a ‘’Tag’’ of some of the important Moving Averages.
EUR/USD
The Euro continues to trade in narrow ranges, and I am still flat. Today I will leave my 1.0650/1.0720 buy level unchanged with the same 1.0575 ‘’Closing Stop’’. I still do not want to be short the Euro. If this view changes, I will be back with a new update for my Platinum Members.
Dollar Index
I am still flat the Dollar. This morning the Dollar is trading unchanged at 105.30. The Dollar has short-term resistance from 105.70/106.40 where I will continue to be a seller on any rally to this range with the same 107.05 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 105.25.
Cash DAX
Shortly after I posted yesterday morning, I was stopped out of my 18710 average short position at 18750 and I am still flat. The DAX continues to trade close to Friday’s all-time high against a backdrop of a strong negative divergence. The DAX has resistance from 18820/18910 where I will again be a seller with the same 19005 ‘’Closing Stop’’. I still do not want to be long the DAX at this time.
Cash FTSE
The FTSE continues to trade near Friday’s latest all-time high, with its latest high coming at a price of 8455. This melt up in the FTSE has led to the highest Daily RSI since 2018 at a price of 82. I said in Thursday’s Daily Commentary that this is not sustainable without a major correction. I still stand by this view. I am still short at an average rate of 8380. I will continue to hold this position with no stop for now. If the FTSE continues to defy gravity and move higher, I will look to add to this position. I will also raise my T/P level slightly to 8320. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Just like on Friday, the Dow gapped higher at yesterday’s open. The difference between Friday’s higher gap and Monday’s is that by the end of yesterday’s session, the Index closed lower, and the entire day was an outside-down day. This occurs when the day has a higher high, lower low and a lower close than the previous day’s range. Outside -down days will at times signal exhaustion of the trend which in this case the rally from Mid-April has lost its upward momentum. I am still short the Dow from last week at an average rate of 39325. Ahead of tomorrow’s key CPI data I want to be flat where possible. As we have had a nice start to May, I will now raise my exit level on this Dow short position to a small loss at 39370. Meanwhile, I will leave my 39625 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
The NDX just missed yesterday’s sell range before falling 90 points and I am still flat. Ahead of this afternoon’s PPI, I will now raise my NDX sell level to 18280/18430 with a higher 18525 ‘’Closing Stop’’. I still do not want to be long the NDX at this time.
March BUND
No Change: I am still long from late Friday at a rate of 130.75. The Bund only traded in a 40-point range yesterday. I will continue to look to add to this position on any further move lower to 130.05 while leaving my 129.45 ‘’Closing Stop’’ unchanged. I will leave my 131.40 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
My Gold plan worked well as the market sold off to my 2334 buy level yesterday before rallying overnight to my revised 2342 T/P level as emailed to my Platinum Members and I am now flat. Today, I will again be a buyer on any dip lower to 2312/2327 with a lower 2299 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2339.
Silver Rolling Contract
I am still flat Silver, which is trading higher at 28.35 this morning. Silver has short-term support from 26.80/27.60 where I will be a small buyer with a higher 25.95 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 28.20.
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