U.S. Indices closed with slight gains on Monday, with the upside seen predominantly in the US session, paring weakness overnight in response to Trump’s 30% tariff letter to the EU and Mexico. Sectors were mixed, with Communication and Financial stocks outperforming, while Energy and Materials lagged. Energy’s underperformance tracked the move lower in crude prices after US President Trump announced a 100% tariff on Russia, and secondary sanctions on nations that buy Russian oil if a peace deal is not agreed to within 50 days. The 50-day period will allow time for negotiations and also denies any imminent action from the US against Russia, which is what sent crude prices lower. Also, Trump announced a military package for Ukraine via NATO after talks with Russia reached a standstill. The package marks a shift in the US’s military shipments to Ukraine, with weapons involved, including both attack and defence systems. T-notes ultimately settled flat in quiet trade with all eyes turning to the June CPI report on Tuesday, which will show whether or not Trump’s tariffs are having an impact on inflation. Fed speak after the data from Bowman, Barr, Barkin and Collins will also be eyed, particularly Bowman, to see if she continues to suggest a July rate cut is a possibility after the data. Fed speak today saw Hammack echo her hawkish tone, stating she does not see a need for near-term rate cuts and that she sees rates currently not far from neutral. In FX, the US Dollar outperformed while Antipodes and Sterling lagged, with Antipodes lightly weighed on by the lower-than-expected import data from China trade data, which saw a surge in exports led by the resumption of rare earths. Fed Member Hammack the Cleveland Fed President sees an economy that is really healthy, and when quizzed about a July rate cut, said she goes into every Fed meeting with an open mind. However, she acknowledged the Fed is hitting its goal on the employment side, but they are not there yet on inflation, and it is important to stay restrictive on monetary policy. She also noted they are pretty close to neutral, and she does not see an imminent need to cut rates. However, if the Fed sees the economy weaken, of course, the Fed will respond. Elsewhere, Oil closed lower by 2% while Gold ended Monday with 0.2% fall.
To mark my 3200th 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 lost 20 points yesterday and is now ahead by 1330 points for July after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 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 0.14% higher at a price of 6268.
The Dow Jones Industrial Average closed 88 points higher for a 0.2% gain at a price of 44,459.
The NASDAQ 100 closed 0.33% higher at a price of 22,855.
The Stoxx Europe 600 Index closed 1.01% lower.
This Morning, the MSCI Asia Pacific closed 0.6% higher.
This Morning, the Nikkei closed 0.55% higher at a price of 39,678.
Currencies
The Bloomberg Dollar Spot Index closed 0.25% higher.
The Euro closed 0.18% lower at $1.1666.
The British Pound closed 0.41% lower at $1.3426.
The Japanese Yen fell 0.21% closing at $147.73.
Bonds
U.K.’s 10-Year Gilt closed 4 basis points lower at 4.59%.
Germany’s 10-Year Bund Yield closed 4 basis points higher at 2.73%
U.S.10 Year Treasury closed 2 basis points higher at 4.44%.
Commodities
West Texas Intermediate crude closed 1.97% lower at $67.10 a barrel.
Gold closed 0.24% lower at $3346.10 an ounce.
This morning on the Economic front we have both German and ZEW Surveys’ at 10.00 am. Next, we have U.S. CPI and the New York State Manufacturing Index at 1.30 pm. Finally, we have speeches from Fed Members: Bowman, Barr, Collins and Logan at 4.15 pm, 6.45 pm, 7.45 pm and 12.30 pm respectively.
Cash S&P 500
It is not often that you get a clean sweep of bullishness across the board. Stocks, rates, the Dollar, implied volatility, implied correlations, VVIX, and CDX high-yield credit spreads all traded higher on the day. Even CPI swaps finished higher. The only issue, of course, is that when all of these indicators rise simultaneously, it typically is not associated—in my experience—with rising stock prices; one would expect stocks to decline. But this is what happens in a market where it took nearly the entire trading session for the S&P 500 e-mini futures to match the trading volume from 3 July—a half-day session. At the close only 864k contracts had traded, compared to 751k on 3 July. Declining volume, combined with an RSI that is now slipping from overbought territory, suggests to me that buyers are running out of momentum to push this market higher. When volume eventually returns—as it always does—prices will likely see a correction. Typically, when implied volatility begins to rise—as it did yesterday—alongside an increase in implied correlation, stocks tend to decline. It is an interesting dynamic: very low volumes in the futures market, combined with some unusual trading patterns across asset classes. It is hard to say precisely, but I don’t think this current trend is likely to persist. Either stocks will need to start falling, or spreads, volatility, and implied correlations will need to begin declining. Seasonally, it makes sense not only for implied correlations to stop falling but also to start rising again as we move through earnings season. Given this backdrop, I find it difficult to believe that implied correlations will continue declining from here. The $NSI Weekly reading will be released later this morning and will move to maximum overbought. While we can stay overbought for a few days this signal is reliable signal and given the present reading should lead to a decline especially as the last two weeks of July are historically a weak timeframe. Monday’s move higher has me short at an average rate of 6278 as emailed to my Platinum Members. I will raise my ‘’Closing Stop’’ to a price of 6305 and my T/P level to 6262. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
EUR/USD
I am still flat the Euro as I continue to be a small seller on any further rally to 1.1720/1.1800 with the same 1.1865 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1640. I still do not want to be long the Euro at this time.
Dollar Index
I am still long the Dollar at an average rate of 97.40 with the same 98.80 T/P level. I will leave my 96.35 ‘Closing Stop’ unchanged. The Dollar appears to have broken above its downtrend, and looks quite bullish at this stage. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
I have no interest in chasing the Russell higher especially as the market has risen 34% since the April 7 lows. I will continue to be a buyer of the Russell on any dip lower to 2100/2180 with the same 2065 ‘Closing Stop’. If I am taken long, I will have a T/P level at 2240.
FTSE 100
Wrong! I was stopped out of my latest 8905 short position at 9005 and I am now flat. I am going to stay flat today as I want to see if the FTSE is able to build momentum now that it is trading at new al-time highs above 9000. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Overnight the Dow hit Monday’s sell range for a now 44550 short position. As I am already short both the NDX and S&P, I have now exited my short Dow position here at 44470 and I am now flat. Today, I will look to sell the Dow from 44750/45000 with a higher 45205 ‘Closing Stop’. If I am taken short, I will have a T/P level at 44520. I still do not want to be long the Dow at this time.
Cash NASDAQ 100
Anyone short the NDX had to be quick to take their profit. Having hit an afternoon low at 22675 the market bounced in a straight line and is trading at 22960 this morning. This move higher has me short at an average rate of 22895 with the same 23105 ‘Closing Stop’. I will now raise my T/P level to 22760. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
I am still flat as I continue to be a buyer on any dip lower to 127.90/128.60 with the same 127.15 ‘Closing Stop’. If I am taken long, I will have a T/P level at 129.20. Despite the extremely low yields I still do not want to be short the Bund at this time.
Gold Rolling Contract
No Change: I am still flat and have no interest in chasing the price of Gold higher as I prefer to wait for a move lower before buying. Gold has support below from 3260/3280. I will now raise my buy level to this area with a higher 3245 ‘Closing Stop’. If I am taken long, I will have a T/P level at 3304.
Silver Rolling Contract
Silver traded lower to my 38.20 buy level. I am still long and I will add to this position on any further move lower to 37.20 with the same 35.95 ‘Closing Stop’. I will now lower my T/P level to 38.90. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Recent Comments