It is interesting that not a single stock market anywhere in the World which closed in positive territory on Monday, although the US Market had a nice rally in the last hour of trading but still fell short of a positive return. The Eurostoxx 50 ended yesterday down 0.75% while the S&P closed just 0.18% lower. Not helping sentiment was the sell-off in USD/JPY and the weaker than expected German IFO Survey.
To mark my 1050th issue of Tradernoble Daily Commentary I am offering a special 2 year rate of Euro 2500 for my Platinum Service which includes 1/4 updated emails throughout the trading day. This offer is open to 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 265 points yesterday and is now ahead by 1795 points for April having made 2265 points in each of the previous two months following a record 3365 points in January. Since I started this service last June it has made over 23,500 points.
US Bond Yields continue to grind higher with the 10 Year Treasury firming another 2.5bps to over 1.90%. This is not with any assistance from incoming US economic data as following the disappointing Manufacturing PMI data on Friday, New Home Sales fell by 1.05% instead of the 1.6% rise expected, while the Dallas Fed Manufacturing Activity Survey fell to -13.9 from -13.6 against the rise to -10 expected. As mentioned in my opening paragraph, Germany’s latest IFO Survey was a drag factor in Europe. Its Business Climate reading dipping to 106.7 from 107.1 expected even though Expectations rose to 100.5 from 100.0 as they were expected to print at 100.9.
Crude Oil closed marginally lower which is surprising given the news flow with the surprise that the falls were not bigger. Saudi Arabia announced it will complete an expansion of its major Shaybah Oil Field by the end of May, allowing the country to maintain output capacity at 12 million barrels a day. Iran has announced it has boosted output by 1m b/d since January, while Kuwait has emerged from its recent strike to announce plans for record output. Meanwhile Crude Inventories at Cushing built by a further 1.5mn barrels last week.
In currencies the USD/JPY has given back some of Friday’s gains following a Bloomberg Story that the Bank of Japan were contemplating paying banks to borrow from it just like the ECB announced last month. Comments from Abe advisor Etsuro Honda that while Japan may have to take additional measures, this BoJ action might not happen until June and this was responsible for the fall in the Nikkei yesterday.
Sterling continues to strengthen on a diminishing fear that the UK will vote to leave the EU with EUR/STG now back trading with a 0.77 handle.
This morning we have no data of note due from either the Euro-Zone or the UK. At 1.30 pm we have the ever volatile Durable Goods Orders. This is followed by the S&P/Case Shiller US HPI and Markit Services PMI at 2.00 pm and 2.45 pm respectively. Finally at 3.00 pm we have the Consumer Confidence Index and the Richmond Fed Manufacturing Index.
June S&P 500
My S&P plan worked very well yesterday as shortly after I posted very early at 4.00 am the market got hit hard down to an initial low of 2074 which enabled me to buy the S&P at an average rate of 2079.50 before we saw a nice rally to north of 2086 which enabled me to cover this position at my revised 2083 T/P level. Subsequently I emailed all my Platinum Member to buy the market again at 2073.50 before we were able to T/P on this position at 2076.50 before the market rallied back to 2084 and I am now flat. The main reason that I got my Platinum Members to re-buy both the S&P and the Dow is the fact that I saw very little downside ahead of the FOMC Meeting and announcement at 7.00 pm tomorrow. For this reason I will again look to buy the S&P on any dip lower to 2076/2081 with a 2070 stop which is just below yesterday’s low print. Again if I am taken long and subsequently stopped out I will use and further sell-off to 2065 to go long again with a 2059 stop. Naturally I still do not want to be short the S&P at this time.
EUR/USD
Unfortunately the Euro just missed my 1.1200 buy level and I am still flat. Today I will now raise my buy level slightly to 1.1180/1.1220 with a 1.1145 tight 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 95.30/95.60 with the ssame 96.00 stop.
June DAX
By the time the European markets opened the DAX just went into free fall. This move was not helped by the weak IFO Survey and this sell-off enabled me to buy the market at an average rate of 10290. Subsequently the DAX rallied back above 10360 and this rally enabled me to cover this position at my revised 10350 T/P level and I am now flat. Today I will again look to buy the DAX on any dip lower to 10260/10310 with a 10210 tight stop. Again the price action is telling me not to be short the market at this time.
June FTSE
The FTSE also got slammed yesterday with the market hitting my 6240 average buy level. Luckily the market just missed my 6195 stop and today I will now lower my T/P level on this position to 6260. If I manage to get out of this position I will then stay flat until tomorrow as I want to observe the price action before taking another trade.
Dow Rolling Contract
The Dow plan worked really well yesterday as initially the Dow hit my 17900 buy level before having a nice rally before lunch which enabled me to cover this position at my 17960 T/P level. Subsequently just like the S&P above I emailed my Platinum Members to re-buy the Dow at 17870 before the market again rallied which enabled me to cover this position at my 17950 T/P level and I am now flat. Today given the FOMC Meeting tomorrow I will again look to buy any dip lower to 17860/17920 with a 17820 tight stop. Naturally I do not want to be short the Dow ahead of tomorrow.
June Bund
The Bund had a very weak trading session yesterday and I am still flat. Today I will lower my sell level to 162.70/163.10 with a 163.40 stop.
Gold Rolling Contract
The weaker equity markets saw Gold trade higher for most of yesterday’s trading session. I am still flat and today I will raise my buy level to 1219/1226 with a 1212 stop.
Silver Rolling Contract
Silver traded lower to my 116.80 buy level with a 16.79 low print. I am still long and today I will now raise my stop to 16.30 on this position.
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