Relief spread through the Global Financial Markets after France’s Election left a Centrist on track for the Presidency, easing concerns that the country will leave the Euro Currency Bloc. US Stocks followed Europe higher while Treasuries and Gold fell as volatility gauges plunged with the VIX closing down a whopping 21%. Meanwhile European shares surged to a 17-month high after Emmanuel Macron advanced as favourite in run-off over Nationalist Marine Le Pen. The results of the weekend vote put Macron, a committed globalist, in position to win the second round on May 7 over le Pen, who wants to take France out of the Euro and clamp down on immigration. A snap Ipsos Survey early yesterday morning suggested he would win by 62 percent to 38 percent for Le Pen.
To mark my 1300th 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. This offer is open to both new and existing members and if anyone is interested can you please email me on bryan@tradernoble.com for details.
For anyone following my Platinum Service it made 32 points yesterday and is now ahead by 1162 points for April, having made 1335 points in March, 1481 in February and 1734 in January. The previous seven months saw gains of 1351, 1971, 1582, 1142, 1782, 1682 and 2550 points respectively. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1750 points.
The spotlight returns to North Korea today, as the world awaits to see if Kim Jong Un marks the 85th anniversary of the Korean People’s Army with another provocation. Yesterday the Japanese Yen weakened with USD/JPY closing above 110. We also saw a lot of economists re-evaluating their EUR/USD forecasts higher with most agreeing the Euro will be close to 1.15 by year end. My own view as you know is that the Euro bull market is only beginning and will become clearer as the US economy weakens towards the end of this year.
In Commodities, Oil closed below $50 while both Gold and Silver stabilised from early morning lows. The market will probably go on hold ahead of the Trump Tax cuts which will finally be announced tomorrow.
In other news, PBOC Deputy Governor Yi Gang was speaking in New York yesterday afternoon and some of the highlights from his speech were as follows
China to prevent systematic risk
To control asset bubble
Non- performing loans have stabilised
To cut red tape for Yuan transactions
Capital Outflow pressure has alleviated
To maintain growth and work on deleveraging
Finally, China is determined to further open up financial sector.
His speech was well received by the US stock market and helped to propel the market higher.
In other news, an opinion poll over the weekend suggests that despite very low approval ratings, if the US Presidential Election were re-held today, Trump would probably win again versus Clinton.
Meanwhile in rates the European and US Treasuries firmed on the back of the French election result with the market subsequently going on hold ahead of tomorrow and the ECB Meeting on Thursday. Dragi’s press conference promises to be a lively affair especially if the Euro can manage to hold on to its gains since Sunday night.
This morning on the economic front we have no economic data due from either the UK or the Euro-Zone. At 3.00 pm we have the US Home Sales, Consumer Confidence Index and the Richmond Fed Manufacturing Index.
June S&P 500
The S&P held most of it’s ‘’Open Gap’’ with a Chicago low print at 2366 compared to Friday’s close at 2346. I am not going to chase this market higher despite the bullish close and as you know all ‘’Open Gap’s’’ get filled. With the Trump Tax announcement tomorrow the market will probably stay firm until we see what the outcome is. If the result is negative, then all of the weekend gains in the S&P will evaporate just as quickly. Today I will move my buy level slightly higher to 2357/2364 with a 2352 stop. I am tempted to look to go short into this rally but I will hold fire until tomorrow. As mentioned yesterday a break above the 5 week high at 2378 targets 2390/2392 ahead of the March 1 all-time high at 2400, which will be difficult to break.
EUR/USD
No change as I am still a buyer on any dip lower to 1.0800/1.0840 with a 1.0765 stop. Given the amount of monies flowing into the European stock market over the past 48 hours I still do not want to be short the Euro at this time. A break and close over 1.0950 will be bullish opening up the possibility of a move higher to 1.11 ahead of the Trump post election victory 1.1340 high.
June Dollar Index
The Dollar just missed my 98.75 buy level and I am still flat. Today I will lower my buy level slightly to 98.20/98.60 with a 97.85 stop. Given how oversold the Dollar is trading I still do not want to be short the Dollar at this time.
June DAX
After the DAX hit my initial sell range at 12420 I emailed my Platinum Members to exit this position as I did not like how easily the April highs at 12400 was broken and as a result I covered this short position at 12410 and I am now flat. This morning the DAX is trading 100 points above this level with the market now trading outside the top of its Bollinger Band and Williams Index. Given the extent of the opening yesterday I will now raise my buy level in the DAX to 12370/12425 with a 12325 tight stop. With the ECB Meeting on Thursday I do not want to be short the market at this time.A push higher in the DAX from here has a target price at 12595 ahead of very strong resistance at 12690.
June FTSE
Initially the FTSE traded higher to my 7190 sell level. I was surprised how easily the 7180 Head & Shoulders level was broken yesterday as when you look at the Daily Chart this should not have happened. In the same email that I said to exit any short DAX position to my Platinum Members I said to only add to my FTSE short position on a move higher to 7220 which happened after lunch and I am now short at an average rate of 7205. Given the bullishness of the other major Indices I am not comfortable with this short position and as a result I will leave my stop at the same 7240 price level thus not risking too many points on this trade. If I am stopped out of this trade I will be a more aggressive seller on any further rally higher to 7270/7300 with a 7330 stop. Given the fact that the FTSE closed back above 7180, I will now look to buy the market on any dip lower to 7150/7180 with a 7125 stop.
Dow Rolling Contract
The Dow did close above the key 20660 resistance level after another large opening gap for the market following the announcement of the Trump Tax cut tomorrow. Of course if the Tax cut does not match market expectations then the Dow will quickly break back below this key 20600/20600 support level. However for today I would not be short and will now look to buy the Dow on any dip lower to 20635/20695 with a 20585 stop.
June BUND
I am still flat the Bund which is trying to stabilise above yesterday’s 160.93 low print. With the ECB Meeting tomorrow any hint that Dragi is going to maintain QE should see the Bund rally and the Euro trade lower. Today I will now look to buy the Bund from 160.80/161.15 with a 160.55 tight stop. I certainly do not want to be short the Bund at this time despite the insane low yield.
Gold Rolling Contract
Yesterday’s move lower in Gold was the largest setback since the move lower from February 27 to March 10, However as long as Gold can stay above its important pivot point at 1260, then I am happy to look to continue to ‘’buy the dip’’. For these reasons as I am still a buyer on any dip lower to 1257/1264 with the same 1251 stop.
Silver Rolling Contract
My long 17.65 Silver position worked well with the market trading to a 18.00 high print overnight. As I wanted to bank some points for yesterday’s trading session I covered this Silver position at my revised 17.87 T/P level and I am now flat. Today I will again look to buy Silver on any dip lower to 17.40/17.70 with a 17.15 tight stop. Silver needs to break and close over 18.60 for the market to look to break higher.
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