U.S. Equity Markets started the week on a positive note, following across the board buying, led by the Dow which ended yesterday with a 2% gain. Federal Reserve Bank of St. Louis Chairman James Bullard said he anticipates a potential rate cut as early as next year. He told Fox Business that the central bank has a “pretty good plan” to bring inflation under control, stating that the market’s steady drop this year is largely due to investors repricing the Fed’s rate hikes… as well as the economic recovery from the pandemic lows. Bullard noted that while this resulted in the sharp drop we are currently seeing, the economy rebounded more than initially expected – driving present inflation. However, he added that if the Fed increases rates by 0.5% over the next several meetings, it should help interest rates settle at around 3.5%… while also reducing prices in the process. And once the Fed is done with its aggressive policy, it could start cutting rates in 2023 and 2024 to rebalance the market and economy. Within the S&P 500, all the 11 sectors finished higher. European Markets closed higher. Russia halted gas supplies to Finland while saying it would establish new military bases on its western border in response to Sweden and Finland’s decision to apply for NATO membership. Ukraine’s government said it would not agree to a ceasefire with Russia while also ruling out any deal that would involve ceding control of territory to Moscow. Investors await preliminary Purchase Managers’ Index data for May later this week for clues on the health of the global economic growth outlook. European Central Bank President Christine Lagarde suggested the first interest-rate hike could happen as soon as July, but she downplayed the chances of a 0.5% increase. In Asia, Reserve Bank of Australia Assistant Governor Chris Kent said it has no intentions of selling bonds it holds in its portfolio, easing some fears about increasing support for higher yields. Bank of Japan Governor Haruhiko Kuroda said it will continue with current easy-money policies until the central bank sees inflation sustainably above its 2% target. South Korea’s preliminary export growth for May increased versus April, as demand for semiconductors and shipments to the U.S. remained resilient. Shanghai Health Commission Deputy Head Zhao Dandan said it will begin categorising city districts as low, medium, and high risk in an effort to return to normalcy. Elsewhere, Oil fell 0.31% despite ongoing geopolitical tensions. While Gold closed 0.41% higher on further Dollar weakness.
To mark my 2550th 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 was flat yesterday and is still ahead by 2609 points for May having made 762 points in April, following a gain of 5883 points in March. The Platinum Service made an impressive 5324 points in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss, having made 2466 points in November, 1028 points in October, 2866 points in September, 1543 points in August, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, after ending March with an impressive gain of 3769 points. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 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 1.86% higher at a price of 3973.
The Dow Jones Industrial Average closed 619 points higher for a 1.98% gain at a price of 31,880.
The NASDAQ 100 closed 1.68% higher at a price of 12,034.
The Stoxx Europe 600 Index closed 1.1% higher.
Yesterday, the MSCI Asia Pacific Index rose 0.8%.
Yesterday, the Nikkei closed 0.98% higher at a price of 27,001.
Currencies
The Bloomberg Dollar Spot Index closed 0.8% lower.
The Euro closed 1.2% higher at $1.0685.
The British Pound closed 0.7% higher at 1.2583.
The Japanese Yen rose 0.1%, closing at $127.84.
Bonds
Germany’s 10-year yield closed six basis points higher at 1.01%.
Britain’s 10-year yield closed eight basis points higher at 1.97%.
US 10 Year Treasury closed seven basis points higher at 2.86%.
Commodities
West Texas Intermediate crude closed 0.31% lower at $111.20 a barrel.
Gold closed 0.41% higher at $1853.10 an ounce.
This morning on the Economic Front we have U.K Public Sector Borrowing Requirement at 7.00 am. This is followed by German, Euro-Zone, U.K and U.S. Global Markit Manufacturing PMI at 8.30 am, 9.00 am, 9.30 am and 2.45 pm respectively. Finally, we have New Home Sales at 3.00 pm and a speech from Fed Chair Powell at 5.20 pm.
Cash S&P 500
Last week’s marginal lows in the S&P saw the market close above the previous week’s lows, resulting in follow through yesterday, as speculated with the S&P now trading 180 Handles above Friday’s 3811 low print. I was unlucky yesterday as the S&P missed my 3895 buy level with a 3909. The Fed have only done two rate hikes so far and already Bullard is out talking about rate cuts in 2023 and 2024. You cannot make this stuff up as the Fed will do everything in their power to prevent an all-out crash in the market. Today, we will have suffer more talk from Fed Chair Powell who in my opinion should never have been re-elected. We are still doing QE in an inflationary environment which is just plain madness. One worry about yesterday’s rally was the fact that the VIX only closed lower by 3%. The S&P has resistance from 4005/4035 where I will be a small seller with a tight 4061 stop. After the close SNAP reported weaker than expected earnings resulting in their shares off by 20% as I go to press. As a result the S&P is now trading lower at a price of 3948. am reluctant to chase the S&P higher as the two times I did this in the last few weeks resulted in large loses. The S&P has support from 3895/3925 and I will move my buy level to this range with a tight 3879 stop.
EUR/USD
The Euro continues to rally as expected. The Euro is trading at 1.0685 as I go to press – 340 points higher than last week’s low print. I will now raise my buy level to 1.0550/1.0610 with a 1.0475 tight stop.
March Dollar Index
The Weekly Reversal in the Dollar suggests that at the very least we have seen a meaningful top in the Dollar. I am still flat the Dollar as the market just missed my 103.10 sell level. I will now lower my sell level to 102.50/103.10 with a 103.65 tight stop.
Cash DAX
The DAX never came close to yesterday’s buy range and I am still flat. The price action in the DAX is bullish and I certainly would not be short the market at this time. The DAX had every opportunity to test its Feb lows over the past two weeks but each time all sell-offs were met by strong buying. I will now raise my buy level to 13880/13970 with a tight 13785 stop.
Cash FTSE
The FTSE rallied yesterday and I am still flat. I will now raise my buy level to 7340/7410 with a higher 7285 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The Dow is trading now 1300 points higher than where we were on Friday afternoon. Bear Markets are notorious for vicious rallies and this is no exception. Even though Sentiment is still on the floor as shown by the Fear & Greed Index which improved yesterday to close at 14 which is still a reading of ‘’Extreme Fear’’, I am reluctant to chase the market higher as I would like to see the Dow build value above 32100 first. The Dow has short-term support from 31240/31540 where I will be a small buyer with a 31095 stop.
Cash NASDAQ 100
No Change. I continue to nurse last month’s 14327 long position which I have now carried into May. I will now lower my exit level on this position to 13600 which I am hopeful we will see this month. Despite how oversold the NDX is trading I will not add to my existing long position. If this changes I will be back with a new update for my Platinum Members.
June BUND
The rally in Equity Markets saw the Bund have a small selloff to my buy range yesterday. I am now long at a price of 153.10 and I will add to this trade at 152.40 with a now lower 151.65 stop. I will lower my T/P level to 153.70 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
No Change. I will not chase the price of Gold higher, leaving my1822/1808 buy level unchanged with the same tight 1797 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. Silver has support from 20.70/21.30 where I will continue to be a buyer with the same 19.95 stop.
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