U.S. Equity Markets sold off as inflation fears ran rampant again, led by the Dow which closed lower by 1.36%. After the big jump in China’s PPI, there could be concerns that we could see similar spikes in inflation here in the U.S. Federal Reserve speakers tried to ease some of these fears yesterday afternoon. Fed Governor Lael Brainard reiterated the Central Bank’s position that any increases in inflation this year will be temporary. She added that these temporary spikes will not force a change of policy, implying continued easy money policies. Atlanta Fed President Raphael Bostic echoed these comments, saying patience is needed on the spikes in inflation. In terms of Economic Data, Job Openings hit an all-time high in March. This signals that businesses are ready to increase hiring. The tech-heavy Nasdaq recovered from the lows at the open (where it fell more than 2%) throughout the day, even turning positive in the afternoon. European Markets fell again. ZEW’s Euro-Zone indicator of Economic Sentiment for February hit the strongest level in 21 years as optimism gained with the rising pace of vaccinations. European Central Bank Governing Council member Isabel Schnabel said the central bank will not adjust its policy based on this year’s spike in inflation, which is thought to be temporary. Italy’s Industrial Production data for March were weaker than expected, meaning the recovery in the European Union’s third-largest economy remains uneven. In Asia, Technology stocks came under pressure on inflation and economic reopening concerns, as investors speculated that global central banks will be forced to tighten monetary policy once more. China’s Consumer Price Index data for April were weaker than expected, but rose versus March as the numbers lap easy comparisons versus last year. Japan’s household spending data for April were stronger than expected, as the Ministry of Internal Affairs said individuals spent more on computers, televisions, and entertainment. Elsewhere, Gold closed flat while bitcoin gained 2% as Palantir said that it is considering adding the cryptocurrency to its balance sheet.
To mark my 2300th 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 15 points yesterday and is now ahead by 44 points for May having closed April with a gain of 1244 points, having ended March with an impressive gain of 3769 points, having made 3286 points in February, 2077 points in January, 2273 points in December, 2025 points in November, 2779 points in October, 3042 points in September and 2383 points in August. 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 closed 0.87% lower at a price of 4152.
The Dow Jones Industrial Average closed 473 points lower for a 1.36% loss at a price of 34,263.
The NASDAQ 100 closed 0.06% lower at a price of 13,351.
The Stoxx Europe 600 Index closed 0.8% lower.
Yesterday, the MSCI Asia Pacific Index fell 0.5%.
Yesterday, the Nikkei closed 3.08% lower at a price of 28,608.
Currencies
The Bloomberg Dollar Spot Index closed 0.1% higher
The Euro closed 0.2% higher at $1.2148.
The British Pound closed 0.2% higher at 1.4145.
The Japanese Yen rose 0.1%, closing at $108.63.
Bonds
Germany’s 10-year yield closed four basis points higher at -0.16%.
Britain’s 10-year yield closed four basis points higher at 0.83%.
US 10 Year Treasury closed three basis points higher at 1.63%.
Commodities
West Texas Intermediate crude closed 0.68% higher at $65.97 a barrel.
Gold closed 0.04% higher at $1,837.10 an ounce.
This morning on the Economic Front we have German CPI and UK GDP and Industrial Production at 7.00 am. This is followed by Euro-Zone Industrial Production at 10.00 am and U.S MBA Mortgage Applications at 12.00 pm. Finally, at 1.30 pm we have CPI and a speech from Fed Member Clarida at 2.00 pm.
June S&P 500
The S&P hit a low of 4104 yesterday – 130 Handles lower than Monday’s 4237 all-time high. The S&P would have closed lower were not for the fact that the NASDAQ rallied 300 points off its early afternoon low print. I was stopped out of my 4188 buy level at 4169 before buying the S&P at an average rate of 4135. Subsequently I emailed my Platinum Members to exit this position at 4140 and I am now flat. So far the S&P and Dow are holding well above their respective 50 Day Moving Averages but with the VIX closing a further 9.50% higher yesterday it will not take much for the S&P to test this key level which comes in at 4040 today. The S&P has short-term support from 4090/4110 where I will again be a buyer with a 4078 ‘’Closing Stop’’. I will now lower my sell level to 4180/4195 with a 4211 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 4122. If I am taken short I will have a T/P level at 4165.
EUR/USD
My Euro plan worked well with the market trading higher to my 1.2180 sell level before trading lower to my 1.2145 T/P level and I am now flat. Today, I will again be a seller from 1.2185/1.2225 with a 1.2261 stop. I will continue to be a buyer on any dip lower to 1.2050/1.2090 with the same 1.1995 stop.
June Dollar Index
I am still long at 90.35 with a now lower 90.55 T/P level. I will leave my 89.75 stop unchanged and if any of the above levels are hit I will be back with a new update for my Platinum Members.
June DAX
The DAX fell shy of my sell range before accelerating lower into the close. So far the key 14900 support level is holding. I will now lower my sell level to 15240/15310 with a lower 15405 stop. I still do not want to be long the DAX at this time.
June FTSE
The FTSE traded the whole of yesterday’s range for a now 6940 average long position. I will lower my T/P level to 6960 while leaving my stop unchanged at 6865.
Dow Rolling Contract
Just like that, the Dow falls over 1000 points in less than 24 hours. However, for the market to turn bearish we need to break the key 50 Day Moving Average which comes in at a price of 33275 today. Yesterday’s move lower has me long at a price of 34320. I will now lower my T/P level to 34400 while leaving my 34225 ‘’Closing Stop’’ unchanged. If the market can get through today’s CPI data unscathed then we should recover some of yesterday’s losses.
June NASDAQ
My NASDAQ plan worked well with the market trading the whole of my buy range for a 13120 average long position before we rallied to my 13250 T/P level and I am now flat. The NASDAQ is oversold and due a bounce. We have support from 13100/13200 where I will again be a buyer with a 12995 ”Closing Stop”.
June BUND
I bought the Bund at 169.60 and I will add to this trade at 169.00 while leaving my stop unchanged at 168.85. I will now lower my T/P level to 169.85 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Still No Change. I am a buyer from 1788/1802 with the same 1779 stop.
Silver Rolling Contract
Silver traded in a narrow range yesterday and I am still flat. I will continue to be a buyer from 26.10/26.70 with the same 25.55 stop.
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