U.S. Indexes ended yesterday’s trading session the day in the red, amid broader risk-off sentiment, although sectors closed more mixed. Sentiment was soured through the duration of Tuesday but extended further after the Wall Street Journal reported that mediators see little progress in Iran-US talks, and Iran’s position to end the war has not changed much from earlier iterations that failed to yield progress towards a deal. Following this, the Dollar continued its ascent higher, to the detriment of G10 FX peers, as Antipodeans lagged on the aforementioned risk but also the selling of precious metals. Spot silver saw greater losses than its counterpart. The Canadian Dollar was the relative outperformer, and more-or-less flat versus the US Dollar, despite cooler-than-expected inflation metrics. The Treasury selloff continued as inflation concerns worsen, as the Middle-East conflict drags on. The crude complex was choppy, amid pretty tight ranges by recent standards, but rose to highs on a couple of WSJ reports into settlement. There was no tier 1 US data or Fed speak, as attention turns to FOMC Minutes and Nvidia earnings on Wednesday. Pending Home Sales rose 1.4% M/M in April (exp. 1.3%, prev. 1.5%), with M/M sales rising in the Northeast, Midwest and West, but declining in the South. NAR Chief Economist Dr. Lawrence Yun said that “buyers are coming out with cautious optimism despite increasing economic uncertainty and a slight rise in mortgage rates”. Despite the positive numbers Yun stressed, “Unless supply meaningfully increases, home price growth could outpace wage growth and further erode the homeownership rate. All efforts need to be focused on boosting housing supply.” Energy Markets continued to dictate rates price action as geopolitical uncertainty remained elevated despite President Trump holding off on a planned strike against Iran that was reportedly due to take place on Tuesday. Trump has continued to leave the door open for renewed military action should negotiations fail, warning of “another big hit” if Iran does not agree to a deal. As such, markets likely need to see clearer signs of tangible diplomatic progress before oil prices — and in turn yields — can sustainably move lower. Elsewhere, Fed speak was limited, although President Trump appeared to soften his rhetoric around Fed policy and incoming Chair nominee Warsh. Asked about the recent hawkish repricing in rates markets and whether he expects Warsh to deliver cuts, Trump said he would let Warsh “do what he wants” and that he believes he will “do a good job”. Globally, Canadian inflation data came in softer than expected, contrasting with the recent run of firm US inflation reports. In Japan, Treasury Secretary Bessent spoke with Bank of Japan Governor Ueda and said that excess FX volatility is undesirable, while Japanese Finance Minister Katayama warned authorities remain ready to take decisive FX action, helping support the Yen. Meanwhile, UK labour market data came in soft, while reports suggested Labour’s Burnham would not commit to maintaining existing manifesto tax pledges and had opened the door to future tax increases if he were to become Prime Minister, lending some support to Gilts. Elsewhere, Oil closed flat while Gold ended the day with a 1.8% loss.
To mark my 3375th 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 80 points yesterday and is now ahead by 1815 points for May having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 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 0.67% lower at a price of 7353.
The Dow Jones Industrial Average closed 322 points lower for a 0.65% loss at a price of 49,363.
The NASDAQ 100 closed 0.61% lower at a price of 28,818.
The Stoxx Europe 600 Index closed 0.19% higher.
This Morning, the MSCI Asia Pacific closed 0.3% lower.
This Morning, the Nikkei closed 1.34% lower at a price of 59,740.
Currencies
The Bloomberg Dollar Spot Index closed 0.15% lower.
The Euro closed 0.35% lower at $1.1604.
The British Pound closed 0.23% lower at $1.3400.
The Japanese Yen fell 0.13% closing at $159.12.
Bonds
U.K.’s 10-Year Gilt closed 1 basis points higher at 5.15%.
Germany’s 10-Year Bund Yield closed 3 basis points higher at 3.19%
U.S.10 Year Treasury closed 5 basis points higher at 4.66%.
Commodities
West Texas Intermediate crude closed 0.14% higher at $104.90 a barrel.
Gold closed 1.72% lower at $4488.10 an ounce.
This morning on the Economic Front we already had the release of U.K. CPI which rose 2.8% Y/Y versus +3.0% expected. Also released was German PPI which rose 1.2% versus +1.0% expected. Next, we have Euro-Zone CPI at 10.00 am and a German 10-year Bund Auction at 10.30 am. This is followed by speeches from Bank of England Governor Bailey at 2.15 pm and Fed Governor Barr at 2.20 pm. Finally, we have the FOMC Minutes at 7.00 pm and the earnings from NVIDIA after the close this evening.
Cash S&P 500
The S&P 500 closed Tuesday’s session lower by 0.65%. Yesterday’s sell-off saw the market close below its 10Day EMA at 4372. It is not a deal-breaker for the bulls, but it is notable, given that this level acted as strong resistance in May and solid support in April. One day does not make a trend, but another day or two below the moving average could. Rates rose again on Tuesday, with the 30-year Treasury yield easily closing at its highest level since 2007. One thing that stands out is that the yield is now trading above its upper Bollinger Band, while the RSI has climbed above 70. That suggests rates are becoming overextended and may be due for either a period of sideways consolidation or a pullback toward the 20-day moving average near 5%. That said, rates have been trading closely with oil, so if oil continues higher, it will be difficult for yields not to keep rising as well, even in an overbought condition. As of now, at least on a closing basis, it appears that oil has broken out of a symmetrical triangle/diamond pattern. The distance from the top to the bottom of the pattern measures roughly $30 per barrel, and when that range is projected from the breakout point, it suggests WTI could climb toward $130. All eyes will now turn to NVIDIA’s earnings after the close this evening with plenty of two-way volatility guaranteed after the results are released. The S&P has an ‘Open Gap’ from two weeks ago from 7257/7294. I will use any tag of the gap to close my 7097 average short position and reassess if triggered. Ahead of Nvidia, I will tighten my exit level depending on market conditions. If this view changes I will be back with a new update for my Platinum Members.
EUR/USD
I am still long the Euro from Friday at 1.1620 with the same 1.1680 T/P level. I will add to this position at 1.1540 while leaving my ‘Closing Stop’ unchanged at 1.1475. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
No Change: The Dollar has short-term resistance from 100.00/100.80 where I will be a seller with a tight 101.50 ‘Closing Stop’. If I am taken short, I will have a T/P level at 99.30. The Dollar has support below from 98.10/98.80 where I will again be a buyer with a 97.55 ‘Closing Stop’. If I am taken long, I will have a T/P level at 99.50. If any of these views change, I will be back with a new update for my Platinum Members.
Russell 2000
I am still flat. Today, I will lower my sell level to 2820/2890 with a lower 2955 ‘Closing Stop’. If I am taken short, I will have a T/P level at 2770. Given how overbought the Russell is trading I still do not want to be long the market at this time.
FTSE 100
Overnight the FTSE traded lower to my 10250-buy level. I am still long with a now lower 10320 T/P level. I will add to this position at 10170 with a now lower 10095 ‘Closing Stop’. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
I am still flat. Today, I will continue to be a buyer of the Dow on any dip lower to 48650/48950 with the same 48395 ‘Closing Stop’. If I am taken long, I will have a T/P level at 49280. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
Frustratingly, the NDX twice missed yesterday’s sell level before falling 300 points and I am still flat. Ahead of NVIDIA, I will now raise my sell range to 29150/29350 where I will again be a seller with a 29605 wider ‘Closing Stop’. If I am taken short, I will have a T/P level at 28730.
December BUND
I am still flat. With Bund Yields at 3.16% the market is now oversold and due a bounce. Today, I will continue to be a buyer on any dip lower to 123.00/123.70 with the same 122.35 ‘Closing Stop’. If I am taken long, I will have a T/P level at 124.50.
Gold Rolling Contract
I am still flat. Gold just missed Tuesday’s buy range before having a small rally into the New York close. I will not chase the price of Gold higher as I continue to be a buyer on any dip lower to 4320/4420 with a lower 4195 ‘Closing Stop’. If I am taken long, I will have a T/P level at 4590 If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
At one stage yesterday Silver was trading lower by over 6%. This sell-off saw my buy range hit for a 73.90 long position. To bank some points for Tuesday’s session, I have now exited this long position here at 74.70 and I am now flat. Silver has short-term support below from 70.50/73.50 where I will be an aggressive buyer with a lower 67.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 76.10.
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