When the US after market opened for oil on Sunday evening, WTI and Brent were down over 6% on Friday’s close. These lows were in place when I posted at 7.30 am yesterday morning, but those prices proved to be the lows for the day with Oil now trading close to last Friday’s close, even without a Doha agreement. And that has been the pattern for the Commodity currencies that were sold early yesterday morning, but since recovered that lost ground. The AUD for example was trading at 0.7650 yesterday morning only to be trading back above 77. Incredibly both the S&P and Dow closed higher on the day to register upside Key Day Reversals as yet again the Central Banks bought this market to prevent another meltdown.
To mark my 1050th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2500 which includes 1/4 updated emails throughout the trading session. For example yesterday all Platinum Members received 4 updated emails with the last one going out at 10.15 pm. This offer is open to both new and existing members and if anyone is interested please email me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 14 points yesterday and is now ahead by 1110 points for April having made 2265 points in each of the previous two months after a record 3365 points in January. Since I started this service last June it has made over 23,000 points.
The turnaround in oil looks to have come from a labour strike in Kuwait that has side-lined 1.7mbpd reducing global over-supply, for now anyway. Workers have been protesting cuts to wages and benefits. While major producers had not planned to increase production anyway, Iran still likes it.
The push back up in the AUD was assisted by higher LME Base Metal prices at the start of the week, with the LMEX Index closing 0.75% higher led by Copper and Nickel. Gold closed little changed while Iron ore rose over 2.5% and is back trading above $60 a tonne. Yesterday was a quiet day for data with the US NAHB Housing Index steady at 58 with higher buyer traffic but lower current sales, signs that housing demand has lost a little of its stronger edge over recent months as reported by me over the past few weeks. My own view is still that the US property market is starting to get into trouble after a big pick-up over the previous two years.
The New York Fed’s President Bill Dudley who is a voter and close to the inner circle, gave remarks at the opening of an Economic Conference in New York yesterday afternoon. Dudley was speaking of more Monetary tightening but that they are likely to be gradual/cautious with the US facing significant uncertainties. A similar cautious tone came from Dudley’s Minneapolis Fed colleague President Neel Kashkari who is a non-voter. He said the US economy is still in ‘unchartered waters’ with the US Dollar a factor for the economy. On that score the Bloomberg Spot Dollar Index closed down 0.22% in what has been a very quiet past 10 days for currency trading.
This morning on the economic front we have Euro-Zone Current Account and the ECB Bank Lending Survey at 9.00 am. This is followed at 10.00 am by the German and ZEW Survey for Current Situations/Expectations. Finally at 1.30 pm we have US Housing Starts and Building Permits.
June S&P 500
Yesterday was a very frustrating trading session for me as I expected the S&P to close its large ‘Down Gap’ from Friday’s close but unfortunately I tried to be too clever when I posted looking to buy the S&P at 2057 or better. Unfortunately shortly after I posted the S&P only made a low at 2058.25 before going on to have a 30 Handle Rally and in the process have a significant upside Key Day Reversal. This rally saw me go short the S&P at 2081 but very late in the trading session at 10.15 pm I emailed my Platinum Members to exit this position at 2086 or better and as a result I am now flat. The S&P Cash Market is too near 2100 not to test this level despite both the Daily Bollinger Band and Williams Index overbought and trading at the top of their bands. I am now looking for a set-up to go more macro short if this rally continues and today I will again be a seller on any rally higher to 2093/2099 with a 2105. Despite the positive price action I do not want to be long the S&P at this time given how over extended we are to the upside. Yesterday again proved my point about how difficult it is to be short these markets for more than a few hours before buyers return in this manipulated and over-valued stock market.
EUR/USD
The Euro continues to trade in a very narrow range between 1.1220 and 1.1350 on small volume as the market waits for the key ECB Meeting and Dragi press conference on Thursday. I am still flat the Euro and today I will raise my buy level slightly to 1.1220/1.1260 with a 1.1180 stop. I still do not want to be short the Euro at this time.
June Dollar Index
No change as I am still a seller on any rally higher to 95.20/95.60 with the same 95.90 stop. I do not want to chase this market lower especially ahead of Dragi and the ECB on Thursday.
June DAX
It is very unusual that all my sell levels for my Indices get hit at the same time as I try to stair-step my sell or buy levels depending on the direction. After I went short the FTSE I covered this position (please see below) while I then went short the S&P at 2081. At this stage I emailed my Platinum Members to raise their sell level to 10150/10180 and having gone short on average at 10165 I cut this position at 10150 and I am still flat. As I have mentioned countless times this 10100/10200 is key resistance and this is why today’s ZEW Survey could be key to breaking this level. Today I will be a small buyer on any dip lower to 10050/10100 with a 9990 stop. I do not want to be short the market as I still reckon we will take out this resistance ahead of the ECB on Thursday.
June FTSE
As mentioned above soon after the FTSE hit my 6310 sell level I emailed my Platinum Members to cut this position at 6292 and I am now flat. Today I will again look to go short on any further rally higher to 6350/6380 with a 6410 stop. Remember the 6350/6400 is major resistance. I still do not want to be long the market at this time.
Dow Rolling Contract
Similar to the DAX above after I went short the S&P, I also raised my sell level in the Dow to 17990/18020 and after going short the Dow at 17995 I again emailed my Platinum Members to cover this position at 17970 due mainly to the huge upside Key Day Reversal and I am still flat. The Dow is now back to levels not seen since early last Summer following its rally of over 2600 points in just eight weeks. Given how overbought we are trading I will again look to go short on any further rally higher to 18050/18100 with a 18150 tight stop. I still do not want to be long the Dow at this time.
June Bund
The Bund traded lower to my 163.40 buy level but given the fact that it had a small reversal off its 164.10 high print earlier in the morning I decided to cover this position at 163.46 as emailed earlier to my Platinum Members and I am still flat. Today I will now look to sell the Bund on any rally higher to 163.70./164.00 with a 164.40 stop. I do not want to be long the Bund at this time.
Gold Rolling Contract
No change as I am still a buyer on any dip lower to 1200/1208 with the same 1991 stop.
Silver Rolling Contract
I am still flat Silver which came close to my buy level after I posted yesterday morning. Today I will lower my buy level slightly to 15.70/16.00 with a 15.35 stop.
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