Incoming US economic data continues to rule the roost, with yesterday’s batch encompassing the manufacturing ISM (strong), construction spending (very strong) personal income (strong), spending (weak) and the personal consumption deflators (weak). These collectively conspired to further support the nascent US Dollar recovery, push US bond yields higher and give a (mild) lift to US stocks.

Please not my new Platinum Service generated over 450 points yesterday. If anybody is interested in my new service please email me on bryan@tradernoble.com.

Meanwhile reports, courtesy of Market News International, that all the big guns involved in determining the conditions under which Greece will receive more aid – Merkel, Hollande, Juncker, Draghi and Lagarde – commenced talks last night to discuss a staff level agreement on Greece and crafted by the European Commission, is serving to keep the Euro ahead of most other major currencies bar the US Dollar. The ever-volatile Norwegian Crown – that on Friday was the world’s best performing currency after oil prices surged by almost $3, fell victim to a chronically weak purchasing managers’ survey last night and is off an alarming 2.35%. No other currency has lost more than 0.7% in the past 24 hours. Sterling sagged a bit, after its manufacturing PMI undershot expectations at 52.0 from 51.8 and 52.5 expected.

As for the data, it is the rise in the headline manufacturing ISM, to 52.8 from 51.5 and better than the 52.0 expected, that carried the day. This is despite suspicions that, just as Q1 GDP is now regarded as having been depressed not just by the weather but excessively tough seasonal adjustment factors, so the ISM has typically been flattered in the northern Spring months by favourable seasonal factors. The current penchant for ‘seasonally adjust – rinse – repeat’ until volatility in the business cycle is expunged (once thought to be in the exclusive purview of central bankers) is alive and kicking. The test now is whether hard activity (production) numbers will match up to positive signals from survey based data. Apparently less susceptible to seasonal quirks, a 2.2% surge in US April construction spending (and big upward revision to March) has many analysts leaping to upgrade their Q2 tracking estimates. These currently look to centre on the mid-two percents (The Atlanta Fed’s Q2 estimate is just 0.8%, but is not deemed reliable this early in the quarter).

The antidote to thoughts that the unfolding US economic calendar could yet bring the Fed into play as early as July, if not June, came in the form of the so called ‘core PCE deflator’. This is the Fed’s preferred measure of inflation and dipped to just 1.2% Y/Y in April down from 1.3% and an expected 1.4%. The disparity between this measure and core CPI – the latter dominated by rising implied housing rental cost – has rarely been wider. Until or unless this gap starts to close from below, the Fed is going nowhere.

This morning on the economic front we have German Unemployment at 8.55 am. This is followed at 9.30 am by UK Mortgage Approvals and Construction PMI. At 10.00 am we have Euro-Zone CPI. Finally after lunch the US will release its latest ISM New York and Factory Orders at 2.45 pm and 3.00 pm respectively.

June S&P 500

The S&P plan worked very well yesterday as shortly before lunch the S&P spiked higher to my 2115 sell level before having a nice 15 handle sell-off which enabled me to cover my position too early at 2109 and I am now flat. I was also too greedy with my 2099 buy level as the market having just missed this buy level then rallied by 16 handles back to 2116 before having a late sell-off. So yet again the 2095/2100 support zone has held the market and there is no doubt some big buying going on at this level to hold the market up. Today I will move my buy level slightly higher to 2098/2103 with a tight 2093 stop. If I am taken long and subsequently stopped out of this position I will use my ‘5 Handle Rule’ to go long again with a stop below whatever low is printed. I will also raise my sell level slightly to 2121/2127 with a 2131 stop. Remember the market has very strong resistance from 2120/2126 and a break and close over 2130 will be short-term positive and opens up the possibility of a move higher to 2180/2210.

EUR/USD

My Euro plan also worked well yesterday as by the time the European Markets opened the Euro was trading near the bottom of my buy range at 1.0910 before having a very nice rally which enabled me to cover this position as outlined in my Platinum Service at 1.0975 and I am now flat. Today I will again be a small buyer on any dip lower to 1.0870/1.0900 with a 1.0845 stop. If I am taken long and subsequently stopped out of any long position I will be a more aggressive buyer in front of 1.0820 with a 1.0780 stop. My only interest in selling the Euro is still on a rally higher to 1.1060/1.1100 with a 1.1160 stop.

June US Dollar Index

My short Dollar plan also worked well yesterday as shortly after the European Markets opened the Dollar was trading at my 97.40 sell level before having a nice sell-off which enabled me to cover this position at my 96.90 level as indicated earlier in my Platinum Service and I am now flat. Today I will again look to go short on any rally higher to 97.80/98.20 with a 98.50 stop.

June DAX

Unfortunately the DAX just missed my 11340 buy level by 4 points before having a 140 point rally and I am still flat. There is no doubt the DAX is been held back by last Friday’s surprising 2.25% fall and concerns as to what is going to happen with Greece. Today I will raise my buy level slightly to 11310/11360 with an 11260 stop. As I still believe that the Euro-Zone will cobble together some sort of Greek settlement I do not want to be short the DAX at this time despite the negative price action.

June FTSE

No change as I am still a small buyer on any further dip lower to 6880/6910 with the same 6855 stop.

Dow Rolling Contract

The Dow plan also worked very well yesterday as shortly before lunch the Dow rallied to my 18110 sell level before having a very nice sell-off which enabled me to cover this short position at 18040 as outlined in my Platinum Service and I am now flat. Today I will leave my buy level unchanged at 17870/17930 with the same 17830 stop. My only interest in selling the market today is on a rally higher to 18150/18200 with an 18260 stop.

June BUND

My suspicions of not to chase this BUND market proved to be correct yesterday as the BUND eventually had a nice sell-off from its 155.77 high to trade lower to my 154.60 buy level. I am still long and I will leave my stop the same at 154.25 on this position.

Gold Rolling Contract

Finally my long 1190 Gold position from last week worked out perfectly yesterday as Gold had a nice spike higher to over 1204 which enabled me to cover this position at 1202 as also outlined in my new service and I am now flat. Today I will again look to buy Gold on any further dip lower to 1175/1183 with a 1169 stop.

Silver Rolling Contract

Just like Gold above Silver finally had a decent rally which enabled me to cover my long 16.75 position from last week at 17.15 and this price level was also outlined to my new Platinum Members. Subsequently Silver got hit hard to the downside and I have bought this market again at 16.70. I will leave a 16.20 stop on this position.