U.S. Equities tumbled the most in almost three weeks and Treasury Bonds rallied as turmoil in the Crude Oil Futures Market triggered a fresh bout of risk aversion. The S&P 500 fell 3.07%, with equity investors shrugging off a deal reached by the White House and Congressional leaders on fresh spending to combat the impact of the Coronavirus pandemic. The historic rout in crude rattled markets for a second day, with the June contract plunging almost 70% at one point after May contracts that expired Tuesday sank below zero for the first time in history. The benchmark 10-year Treasury yield dropped below 0.55%. The gut-wrenching oil debacle may signal the hit to the global economy will be far worse than anticipated by investors who sent the S&P 500 up 28% from its March lows. While major economies around the world take tentative steps toward reopening, signs the U.S. is close to bolstering spending did little to offset fresh concerns over the depth of the recession. President Donald Trump said his administration is working on a plan to make money available to the oil industry to prevent the loss of jobs after prices plunged. Corporate earnings add to woes. Deep profit declines often come with no company insight into the remainder of the year and mounting signs that capital investment is set to plunge. Meanwhile, reports that North Korea’s Kim Jong Un was in critical condition added to the uncertainty. Shares in the region slumped. The US Dollar climbed against most major currencies, with the Won and Ruble tumbling and the Yen edging higher. Elsewhere, the Kiwi slumped after Reserve Bank of New Zealand Governor Adrian Orr said he was open-minded on the idea of directly monetising sovereign debt.
To mark my 2050th 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 365 points yesterday and is now ahead by 3793 points for April, having made an incredible 9264 points in March, 2223 points in February, 2142 points in January, 818 points in December, 780 points in November, 1649 points in October, 1620 points in September and 2387 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 fell 3.1%, closing at a price of 2736.
The Dow Jones decreased 2.7%, closing at 23,019.
The NASDAQ 100 closed 3.7% lower at 8403.
The Stoxx Europe 600 Index decreased 3.5%.
The MSCI Asia Pacific Index fell 3.1%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index climbed 0.4% to 1258.
The Euro was little changed at $1.0861.
The British Pound weakened 1.1% to $1.2306.
The Japanese Yen weakened 0.1% to 107.75 per dollar.
Bonds
The yield on 10-year Treasuries fell five basis points to 0.57%, the weakest in six weeks.
Germany’s 10-year yield fell three basis points to -0.48%.
Britain’s 10-year yield fell four basis points to 0.30%.
Commodities
Interactive Brokers said customers incurred losses of $88 million in excess of equity in their accounts. As a result, Interactive had to fulfil required variation margin settlements with the respective Clearing Houses on behalf of its customers.
Gold fell 0.6% to 1685.20 an ounce.
West Texas Oil for June fell 35% to $13.20 a barrel.
Brent Crude fell 23% to $19.90 a barrel, the lowest on record, with the biggest fall on record.
This morning on the Economic Front we already had the release of UK CPI which came in as expected with a rise of 1.5% y/y. At 12.00 pm we have U.S. MBA Mortgage Applications. This is followed at 2.00 pm by the Housing Price Index. Finally, at 3.00 pm we have Euro-Zone Consumer Confidence.
June S&P 500
Monday’s price moves in oil was the equivalent of a massive underwater detonation, making it probable that some household name may soon float to the surface, belly up. We did see the bankruptcy of Oil-trading firm Hin Leong. Although, it is hardly a household name, 23 banks are exposed to the Singaporean company to the tune of US$3.85bn. That makes Hin Leong a pretty big fish but no whale. Instead, the Whale will like be a large oil company. Alternatively, it could be a financial player, because no bank control risk system will ever have envisaged a $58 spread between the first and second month Oil Futures Contracts. Nor would risk control systems have envisaged a negative price for WTI. The feeling that ‘’someone big’’ must be nursing some ‘’serious losses’’ as a result of Monday’s moves will keep financial markets on edge for a while. My S&P plan worked well yesterday, with the market trading the whole of my buy range for at 2760 average long position before rallying to my revised 2775 T/P level and I am now flat. So far the key 2700/2720 support area is hold but a break and close below here will likely lead to a test of the next major support from 2550/2600. Today I will be a buyer from 2695/2715 with a 2678 stop. The S&P has short-term resistance from 2782/2802 where I will be a small seller with a 2815 stop.
EUR/USD
After the Euro traded higher to my 1.0875 initial sell level, I emailed my Platinum Members to exit any short position at 1.0860 and I am still flat. The Euro has traded in a narrow range for most of April. I will leave my 1.0690/1.0750 buy level unchanged with the same 1.0645 stop. My only interest in selling the Euro today is from 1.0915/1.0965 with a 1.1005 stop.
June Dollar Index
I am still flat the Dollar and today I will raise my buy level to 99.25/99.75 with a higher 98.85 stop. I still do not want to be short the Dollar at this time.
June DAX
Late yesterday the DAX traded lower to my 10230 buy level before rallying to trade higher at 10370 this morning. As I did not want to hold a DAX position overnight, I exited this trade at my revised 10270 T/P level and I am still flat. Today I will again look to buy the DAX from 10080/10210 with a 9985 stop. As we are so close to key support I do not want to be short the market at this time.
June FTSE
I am still flat the FTSE. With Sterling weaker I will not chase this market lower and I will leave my 5770/5850 sell level unchanged with the same 5910 stop.
Dow Rolling Contract
With all three US Indices hitting my buy range I waited to buy the Dow which I did at 23120 before emailing my Platinum Members to exit any long position at my revised 23280 T/P level and I am now flat. Subsequently the Dow made a new low for the day at 22920 before rallying to trade at 23320 this morning. The Dow has short-term resistance from 23450/23650 where I will be a small seller with a 23875 stop. I will be a buyer from 22700/22875 with a 22595 stop. If I am taken long and subsequently stopped out of this position I will be an aggressive buyer from 22150/22450 with a wider 21975 stop.
June NASDAQ
My NASDAQ plan did not work well as after the market traded the whole of my buy range for a 8560 average long position I was stopped out of this trade at 8435 and I am still flat. Subsequently the NASDAQ found support at its 50 Day MA (8353) before rallying to trade at 8510 this morning. Today I will be an aggressive buyer on any dip lower to 8210/8360 with a 8135 stop. The NASDAQ has resistance from 8600/8700 where I will be a seller with a 8760 tight stop.
June BUND
My BUND plan worked well with the market trading higher to my 173.20 sell level before selling off to my 172.80 T/P level and I am now flat. The Bund is trading heavy which is no surprise given it has a negative yield. Today I will again look to sell the Bund from 172.85/173.35 with a 173.70 stop.
Gold Rolling Contract
My Gold plan also worked well with the market hitting my 1668 buy level before rallying to my 1676 T/P level and I am now flat. Gold has good support at 1650 and today my buy level will be from 1642/1655 with a 1633 tight stop.
Silver Rolling Contract
After Silver hit my 15.70 buy level I covered this position at 15.75 and I am now flat. This morning Silver is trading slightly higher at 14.90. I will be a small buyer from 14.20/14.60 with a 13.80 stop.
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