The torrid rally in U.S. Equities pushed the S&P 500 into the green for the year as easing lockdowns bolstered economic optimism. The US Dollar fell. A jump to a 15-week high on Monday extended the benchmark’s surge from its March low to almost 45%. Energy shares drove the advance as Occidental Petroleum Corp. soared after Bloomberg News reported the company is reviewing options for its Middle Eastern assets. The Nasdaq 100 rose to a record high, and Boeing Co. led gains in the Dow Jones Industrial Average. The US Dollar posted its longest slide in almost a decade, while Treasuries increased. Oil sank as Saudi Arabia said it would not continue its additional, deeper output curbs after June. U.S. Equities extended gains as many parts of the country came out of the shutdowns that brought the world’s largest economy to a standstill amid the Coronavirus pandemic. To Citigroup’s strategists including Tobias Levkovich, positioning may be overly extended, and investors may not be factoring all the potential risks. Meanwhile, Stan Druckenmiller — who last month warned about owning stocks — said on Monday that he now believes he was “far too cautious” during the current market rally. The US Dollar fell for an eighth straight day, down to the level before the Coronavirus crisis sparked a rush to haven assets. Where it goes from here mostly depends on the Federal Reserve, which will probably welcome all signs of recovery in its Statement at the conclusion of this week’s meeting, tomorrow evening. But policy makers may be wary of an unruly increase in borrowing costs that could add to strains on businesses and households, and raise the price tag of the government’s rescue efforts.
To mark my 2075th 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 5 points yesterday and is now ahead by 730 points for June, having made 2456 points in May, 4773 points in April, an incredible 9264 points in March, 2223 points in February, 2142 points in January and 818 points in December. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Equities
The S&P 500 increased 1.2%, closing at a price of 3232.
The Dow Jones Industrial Average rose 461 points for a gain of 1.70%, to close at a new recovery high at 27,572.
The NASDAQ 100 closed 0.80% higher at a new all-time high at 9901.
The Stoxx Europe 600 Index fell 0.3%.
The MSCI Asia Pacific Index climbed 1%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index fell 0.5%.
The Euro was little changed at $1.1293.
The Japanese Yen appreciated 1.1% to 108.40 per dollar.
Bonds
The yield on 10-year Treasuries decreased two basis points to 0.87%.
Germany’s 10-year yield decreased four basis points to -0.32%.
Britain’s 10-year yield declined two basis points to 0.334%.
Commodities
The Bloomberg Commodity Index decreased 0.1%.
West Texas Intermediate crude decreased 3.4% to $38.21 a barrel.
Gold surged 1.4% to $1,706.10 an ounce.
This morning on the Economic Front we have Euro-Zone GDP and the Employment Change at 10.00 am. This is followed at 11.00 am by the U.S NFIB Business Optimism. Finally, at 3.00 pm we have Wholesale Inventories and the JOLTS Job Openings.
June S&P 500
I myself, have been surprised by the vertical strength of the US Indices that keeps running from Gap to Gap. My variant take here which may turn out to be very wrong. The Fed is setting markets up for another crash. Why? Because they have set in motion a stock market mania we have not seen since the 2000 tech bubble. But this time while we are still in recession. It is a mania and it is important to recognise this. And like all manias it will end badly. The amount of ‘’evers’’ keep building up. We have the highest market valuations ever with market cap to GDP closing at 152% last night. We are seeing the highest amount of speculative Call Buying ever. We have the lowest Put Call Ratios ever, meaning everything is one-sided and complacent. We also have the highest Employment ever, at least since the post second World War. The highest Unemployment in post WWII period was 10.8% in 1982. And of course we are witnessing the largest deficit (approximately $4 trillion) and Monetary Intervention ever. We are also seeing the largest disconnect from corporate profits ever, even worse than during the 2000 bubble when the NASDAQ subsequently fell 78%. The S&P is now farther disconnected from its 50 Day Moving Average which comes in at 2858 this morning. On top of this the McClellan Oscillator closed at one of its highest ever readings with a print of +333 last night. Last Monday the S&P was trading at 3007. Yesterday, my S&P plan was again wrong as after the market hit my second sell level at 3202 for a 3192 average short-position I was stopped out of this trade near the close at 3215 and I am still flat. I am not going to chase this market higher and my only interest in buying the S&P is on a dip lower to 3110/3130 with a higher 3095 stop. The next resistance area for the S&P is from 3240/3255 where I will be a small seller with a 3265 stop.
EUR/USD
No Change as I am still a buyer on any dip lower to 1.1160/1.1220 with the same 1.1105 stop. I will now raise my sell level to 1.1380/1.1440 with a higher 1.1485 stop.
June Dollar Index
I am still long at 97.00 with the market just missing my 97.10 T/P level with a morning high at 97.06. I will leave my T/P level and stop unchanged at 96.55 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
June DAX
My DAX plan worked well with the market trading higher to my 12910 sell level before selling off to my revised 12845 T/P level and I am still flat. The DAX is severely overbought with further resistance from 12980/13100 where I will again look to go short with a tight 13155 stop. Meanwhile I will leave my 12500/12600 buy level unchanged with the same 12425 stop.
June FTSE
The FTSE continues to be the weakest of the major Indices. Remember this was the first market to top before Christmas ahead of the Feb/March Crash. Yesterday after the FTSE traded higher to my 6495 sell level I covered this position at my revised 6460 T/P level and I am still flat. This morning the FTSE is trading at the same 6460 area. I will be a small seller from 6505/6565 with a 6605 stop. I still do not want to be long the FTSE at this time.
Dow Rolling Contract
The Dow has now rallied almost 5000 points since its May 14 low at 22789. In points terms this is the largest rally in such a short-period of time ever. The cohort of Retail Traders opened approximately five million accounts in lockdown. Last week small traders bought an incredible 12.1 million calls. This post-peak surge in bets on an ever-higher stock market is a speculative intensity that is compatible with the end of Primary-degree second wave rally. The Dow has now left large ‘’Open Gaps’’ in the last two trading sessions which will be filled at some stage. Yesterday after the Dow hit my 27370 sell level I emailed my Platinum Members to exit any short position at 27280 and I am still flat. I did not see the Dow rallying to a new closing high at 27582 last night. This vertical move may continue but the odds are increasing for a meaningful pull back especially with the McClellan Oscillator closing at +333. The Dow has further resistance from 27800/28050 where I will be a seller with a 28225 stop. My only interest in buying the Dow is still on a purge lower to 26150/26400 with a 25985 stop.
June NASDAQ
The NASDAQ has been on a tear since May 14, closing higher on 13 out of the 17 trading sessions. This move higher saw the NASDAQ close at a new all-time high having risen almost 50% off it March 23 low. Thankfully the NASDAQ sold off to my 9775 T/P level on my latest 9820 short position before rallying to new highs late yesterday. The NASDAQ is severely overbought and this morning I have gone short here at 9895. I will add to this trade at 9995 with a tight 10055 stop. I will have a T/P level at 9775 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
September BUND
I have now rolled to the September Contract which trades at a price of 173.67. The BUND has support from 172.70/173.15 where I will be a buyer with a 172.35 stop.
Gold Rolling Contract
No Change as I am still a buyer from 1665/1675 with the same 1654 stop.
Silver Rolling Contract
I am still flat and today I will raise my buy level slightly to 16.90/17.30 with a higher 16.55 stop.
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