U.S. Equity Markets closed mixed after a quiet session as traders are forced to wait for the debt ceiling show to sort itself out. Following a moment of positivity surrounding a debt deal last week, sentiment quickly returned to uncertainty as congressional leaders and President Biden struck hard-lined positions over the weekend. The supposed “deadline” of June 1 that was first reported by U.S. Treasury Secretary Janet Yellen is now only ten days away. With each day that passes, market volatility will increase, creating an undesirable scenario for many investors. President Biden and House Speaker McCarthy are scheduled to meet overnight. Investors will be watching for any clues this week as the Federal Reserve’s next interest rate decision comes into focus. In addition to several policy makers set to speak this week, traders will be closely watching Friday’s latest release of the PCE Price Index, a closely monitored inflation gauge by Fed Chair Jerome Powell. Another round of major retailers will report earnings this week. Results from major names like Dollar Tree (DLTR), Costco (COST), and BJ’s (BJ) will provide investors with a more thorough look at the state of the consumer. Walmart’s (WMT) recent results provided some hope to discount retailers looking to cash in on the trade-down effect of consumers facing tighter budgets. European Markets closed mixed on what turned out to be a quiet session. In Asia, Tensions between China and the U.S. took another turn as China announced that it is banning local companies from doing business with U.S. semiconductor firm, Micron Technology (MU). (The decision cited that Micron did not pass a cybersecurity review). This escalation brings new uncertainty to other U.S. chipmakers who could soon face a similar reality. Elsewhere, Oil closed 0.54% higher while Gold fell 0.20% after a quiet session.
To mark my 2800th 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 175 points yesterday and is now ahead by 2205 points for May. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and 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% higher at a price of 4193.
The Dow Jones Industrial Average closed 140 points lower for a 0.42% loss at a price of 33,286.
The NASDAQ 100 closed 0.34% higher at a price of 13,849.
The Stoxx Europe 600 Index closed 0.011% higher.
Yesterday, the MSCI Asia Pacific closed 0.40% higher.
Yesterday, the Nikkei closed 0.90% higher at a price of 31,086.
Currencies
The Bloomberg Dollar Spot Index closed 0.29% higher.
The Euro closed 0.1% higher at $1.0816.
The British Pound closed 0.1% lower at 1.2435.
The Japanese Yen fell 0.4% closing at $138.51.
Bonds
Germany’s 10-year yield closed 1 basis points lower at 2.45%.
Britain’s 10-year yield closed 8 basis points higher at 4.07%.
U.S.10 Year Treasury closed 3 basis points higher at 3.71%.
Commodities
West Texas Intermediate crude closed 0.54% higher at $71.99 a barrel.
Gold closed 0.20% lower at $1972.10 an ounce.
This morning on the Economic Front we have a speech from the ECB’s De Guindos at 8.15 am. This is followed by German, Euro-Zone, U.K. and U.S. Manufacturing PMI at 8.30 am, 9.00 am, 9.30 am and 2.45 pm respectively. Finally, we have New Home Sales and the Richmond Fed Manufacturing Index at 3.00 pm. The only Fed speaker this afternoon is Logan at 2.00 pm.
Cash S&P 500
A nothing session as the S&P had one of smallest ranges for the year. The scary thing from the bears point of view is how oversold the broad market is as shown by the $NYSI and $BPSPX which are close to being maximum oversold. I have never known a market where just seven stocks are responsible for all of the 2023 gains in both the NASDAQ 100 and S&P. I still believe that if and when we do get a debt deal that the market is a sell given how overbought both the NDX and S&P are. Ahead of any overnight spikes in the S&P I have now raised my S&P sell level to 4222/4237 with a higher 4251 ‘’Closing Stop’’. I still do not want to be long the S&P at this time.
EUR/USD
No Change. I am still a strong buyer on any dip lower to 1.0700/1.0770 with the same 1.0635 ‘’Closing Stop’’.
June Dollar Index
I am still flat as the Dollar again traded in a narrow range. I will continue to be a seller from 103.60/104.20 with the same 104.85 ‘’Closing Stop’’. I still do not want to be long the Dollar at this time.
Cash DAX
Apart from large Tech Stocks this is the one market that baffles me and my analysis. The DAX hit another new all-time high on Friday on negative divergence. The DAX is now higher for five consecutive months and 7 of the last 8 months despite awful economic data, with Germany close to a recession. European stocks are partying like 2021 while the Japanese Nikkei also hit a new 30-year high yesterday morning, continuing to fly above its Monthly Bollinger Band. I am still short the DAX from Friday at 16270. The only positive about this short position is the DAX did not make a new high yesterday. I will add to this position at 16400 with the same 16505 ‘’Closing Stop’’. I will have a 16140 T/P level on this position and if any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash FTSE
I am still flat the FTSE. With Gilt Yields back above 4% I have no interest in chasing the FTSE higher. Therefore, I will continue to be a buyer on any dip lower to 7640/7710 with the same 7585 ‘’Closing Stop. Despite rising rates and a slowing economy I still do not want to be short the FTSE at this time.
Dow Rolling Contract
My Dow plan worked well as the market traded lower to my initial 33200 buy level before rallying to my 33375 revised T/P level and I am now flat. The price action for the Dow all of May has been bearish. Any rally has been reversed in contrast to the S&P and NDX. Today, I will again be a strong buyer from 32850/33100 with a lower 32695 ‘’Closing Stop’’.
Cash NASDAQ 100
The NDX continues to probe new highs for 2023 against a background where the 14-Day RSI is at 72. History tells us that this overbought RSI reading is not sustainable. I am still short and wrong from last week at 13495 with the same 13850 ‘’Closing Stop’’. I expect to be stopped out of this position and if I am I will again look to sell for all of the reasons above. I will now raise my exit level on this trade to a small loss at 13625. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
June BUND
No Change. The Bund traded in a narrow range yesterday and I am still flat. I will continue to be a buyer on any dip lower to 132.80/133.50 with the same 132.35 ‘’Closing Stop’’.
Gold Rolling Contract
Gold hit an afternoon low at 1968 before having a small rally into the close. I am still flat as I continue to be a strong buyer on any further dip to 1945/1960 with the same 1933 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I am still long at 23.40 with the same no stop. I will continue to look to add to this position on any further dip lower to 22.70. I will leave my 24.20 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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