U.S. Equity Markets closed lower across-the board despite the late rally in the last hour of trading. Surprisingly, the VIX only closed higher by 2%, closing with a 13 Handle. This week, a close eye will remain on multiple Federal Reserve speakers and most notably Fed Chair Jerome Powell who is set to testify before Congress this afternoon and again tomorrow. Powell’s semi-annual testimony should provide further insight into the state of monetary policy and comes after the recent meeting of the Federal Open Market Committee (“FOMC”), where policymakers decided to maintain interest rates after a series of ten consecutive hikes aimed at controlling inflation. Although inflation has significantly decreased from its peak last summer, the Fed’s latest dot plot indicates that if inflation remains high, officials may raise the benchmark Fed Funds rate twice more this year, potentially reaching 5.6%. Monitoring Powell’s testimony will provide valuable information on the Fed’s stance and its potential actions regarding interest rates in response to inflation trends. Investors should pay attention to the latest developments in the housing market. While the market has cooled down from its rapid pace during the pandemic, it continues to show resilience with historically low supply levels. The latest inflation data has proven that housing remains a crucial factor in preventing significant decreases in core inflation. The recent release of the Housing Market Index by the National Association of Home Builders (NAHB) is worth noting, as it reveals a positive shift in homebuilders’ confidence after 11 months of negativity. Additionally, the U.S. Census Bureau is set to report on May’s housing starts and building permits today, providing insight into home construction and overall supply levels. European Markets closed lower. Investors are anticipating another rate hike from the Bank of England on Thursday, driven by persistent inflation and increasing wages in the U.K. While the market consensus leans towards a 25 basis point rate increase, there is also speculation about a potential 50 basis point hike. It is worth noting that unlike the Federal Reserve, the BOE may continue raising rates into the fourth quarter of the year, even though Gilt yields have already reached their highest level in 15 years. This suggests a more aggressive approach by the BOE to address inflationary pressures and stabilise the economy. Elsewhere, Oil fell 1.17%, while Gold closed lower by 0.90% following another volatile session.
To mark my 2800th 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 was made 560 points yesterday and is now ahead by 1505 points for June. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 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 0.47% lower at a price of 4388.
The Dow Jones Industrial Average closed 1245 points lower for a 0.72% loss at a price of 34,053.
The NASDAQ 100 closed 0.09% lower at a price of 15,070.
The Stoxx Europe 600 Index closed 0.56% lower.
Yesterday, the MSCI Asia Pacific closed 0.2% higher.
Yesterday, the Nikkei closed 0.06% higher at a price of 33,388.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% higher.
The Euro closed 0.1% higher at $1.0917.
The British Pound closed 0.1% lower at 1.2760.
The Japanese Yen rose 0.3% closing at $141.44.
Bonds
Germany’s 10-year yield closed 10 basis points lower at 2.41%.
Britain’s 10-year yield closed 15 basis points lower at 4.34%.
U.S.10 Year Treasury closed 5 basis points lower at 3.72%.
Commodities
West Texas Intermediate crude closed 1.17% lower at $70.94 a barrel.
Gold closed 0.9% lower at $1937.10 an ounce.
This morning on the Economic Front we have U.K. CPI, PPI and RPI at 7.00 am, followed by a speech from ECB Member Panetta at 10.15 am. Next, we have U.S. MBA Mortgage Applications at 12.00 pm. Finally, Fed Chair Powell will testify to Congress on the Economy at 3.00 pm.
Cash S&P 500
Yesterday’s price action showed that neither the NDX or S&P are going to roll over easy. Following a 2% decline to 4367 from Friday’s 2023 high, the S&P promptly rallied 20 Handles into the close. This recovery saw the S&P regain its 5 EMA while the $SPBPX eased off a bit from its 75 RSI. Once again, we are faced with a market that is weakening underneath. Fed Chair Powell is on tap this afternoon as well as over a dozen Fed speakers through the rest of the week. The S&P hit my 4385 T/P level on last Thursday’s 4400 average short position and I am now flat. Today, I will again be a seller from 4406/4421 with a 4433 ‘’Closing Stop’’. The S&P has short-term support from 4330/4345 where I will be a strong buyer with a 4314 ‘’Closing Stop’’.
EUR/USD
No Change. I am still flat as the market has traded in a narrow range over the past 24 hours. Today, I will continue to be a seller from 1.1020/1.1100 with the same 1.1155 ‘’Closing Stop’’. The Euro has short term support from 1.0810/1.0880 where I will be a buyer with a 1.0745 wider ‘’Closing Stop’’.
June Dollar Index
No Change. The Dollar has short-term support from 101.30/101.90. I will now raise my buy level to this area with a higher 100.75 ‘’Closing Stop’’.
Cash DAX
The DAX never came close to yesterday’s sell range and I am still flat. I will now lower my sell level to 16250/16350 with a lower 16455 ‘’Closing Stop’’. I still do not want to be long the DAX at this time.
Cash FTSE
Gilt Yields fell 15 basis points yesterday. Despite the fall the FTSE again traded heavy. I am still flat and I will continue to be a buyer from 7460/7530 with the same 7395 ‘’Closing Stop’’.
Dow Rolling Contract
My Dow plan worked well as the market traded lower to my 33980-buy level before rallying to my 34160 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 33650/33900 with a lower 33495 ‘’Closing Stop’’. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
My NDX plan worked well as the market rallied to my 15120-sell level before selling off to my 15010 T/P level and I am now flat. The NDX hit an intra-day low at 14950 before rallying 120 points off this low into the close. Today, I will again be a seller from 15180/15330 with the same 15405 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 15040.
September BUND
Finally, a rally in the Bund as the market traded higher to my 133.75 T/P level on my latest 133.35 average long position. Today, I will again be a buyer from 132.50/133.20 with a lower 131.85 ‘’Closing Stop’’.
Gold Rolling Contract
Gold traded lower to my 1930 buy level before rallying to my revised 1938 T/P level as emailed to my Platinum Members and I am now flat. Today, I will again be a buyer from 1907/1922 with a lower 1889 ‘’Closing Stop’’.
Silver Rolling Contract
Silver fell 2% yesterday. This move lower saw my 23.30 second buy level hit overnight for a now 23.63 average long position. I have no stop on this position. I will now lower my TP level to 24.40. If this changes I will be back with anew update for my Platinum Members.
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