US Indices were little changed on Tuesday (SPX +0.2%, NDX +0.1%, DJIA +0.2%, Russell -0.2%) with sectors mixed; Nvidia (NVDA) (+0.4%) saw marginal upside ahead of earnings of Wednesday. In FX, the Dollar Index was flat and within very tight ranges as both the Canadian and New Zealand Dollar underperforming, with the former after cooler-than-expected inflation data, with the latter awaiting RBNZ overnight. The crude complex was slightly lower, albeit off session lows, amid little geopolitical escalation and ahead of private inventory data after-hours. Treasuries were slightly firmer in choppy trade, as initially saw some spillover strength from Canadian CPI, before two-way action on Fed’s Waller. Waller stuck to his line from March that “several more months of good inflation data” is still needed to support an easing in policy despite the recent CPI data, while he noted a further increase in policy rate probably unnecessary. While markets have been treading water in the first couple of days this week, the risk events come thick and fast on Wednesday, beginning with UK inflation and concluding with Nvidia earnings, with FOMC Minutes and US 20 Year auction sandwiched in the middle. Fed Member Waller (voter) spoke yesterday where he stuck to his line from March that “several more months of good inflation data” is still needed to support an easing in policy despite the recent CPI data, while he noted a further increase in policy rate probably unnecessary. Within this, unlike some of his colleagues, he is not flagging the potential for hikes if it required, and additionally, his views may be more reflective of what we may see in the FOMC Minutes on Wednesday. In later remarks, Waller noted the data is not looking like the Fed need to raise rates. Meanwhile the Fed’s Bostic also a voter repeated his recent remarks noting he is “not in a hurry” to cut rates and businesses are confident in underlying strength of the economy and next year or two should forecast continued solid performance. Elsewhere, Oil fell 0.93% while Gold ended Tuesday flat following a quiet trading session.
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For anyone following my Platinum Service it made 48 points yesterday and is now ahead by 1383 points for May, having finished April with a gain of 4010 points after ending March with a gain of 2113 points. February closed with a gain of 1606 points, after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 points, after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. 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 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 0.25% higher at a price of 5321.
The Dow Jones Industrial Average closed 66 points higher for a 0.17% gain at a price of 39,873.
The NASDAQ 100 closed 0.21% higher at a price of 18,713.
The Stoxx Europe 600 Index closed 0.18% lower.
This Morning, the MSCI Asia Pacific closed 0.3% lower.
This Morning, the Nikkei closed 0.88% lower at a price of 38,604.
Currencies
The Bloomberg Dollar Spot Index closed 0.10% higher.
The Euro closed 0.02% lower at $1.0855.
The British Pound closed 0.04% higher at 1.2713.
The Japanese Yen rose 0.1% closing at $156.14.
Bonds
Germany’s 10-year yield closed 4 basis points lower at 2.50%.
Britain’s 10-year yield closed 5 basis points lower at 4.13%.
U.S.10 Year Treasury closed 3 basis points lower at 4.41%.
Commodities
West Texas Intermediate crude closed 0.93% lower at $79.06 a barrel.
Gold closed 0.1% lower at $2424.10 an ounce.
This morning on the Economic Front we already had the release of U.K. CPI for April which rose 2.3% versus +2.1% expected. Next, we have a speech from ECB President Lagarde at 9.00 am followed by the German Bundesbank Economic Report at 11.00. This is followed by U.S. MBA Mortgage Applications at 12.00 pm and Existing Home Sales at 3.00 pm. Finally, we have a 20 Year Treasury Auction at 6.00 pm and the FOMC Minutes at 7.00 pm. Please remember that after the close we have the earnings from NVIDIA which will be another binary event.
Cash S&P 500
The last seven days have seen little or no movement in the S&P as both volatility and volume are practically non-existent. Morgan Stanley’s Mike Wilson was the latest so called Wall Street ‘’Guru’’ to throw in the towel looking for lower prices. He now sees the S&P rising 2% by June 2025, which is a major about turn from his view that the benchmark will tumble 15% by December. The strategist – whose bearish 2023 outlook failed to materialise as markets kept rallying – finally gave in and boosted his target for the S&P 500 to 5400 from 4500. That catapults his forecast from among the lowest on Wall Street to one that projects a fresh record for the Index. This is a painful about turn but this is what happens when you use fundamental principles for an outlook getting totally overwhelmed by the liquidity machinations we have been witnessing. How can we have a rate hike cycle when financial conditions are as loose as before they started raising interest rates. A Market Cap to GDP ratio of 188.3% for the U.S. stock market is extremely high by historical standards and seems at odds with the Fed’s stated restrictive monetary policy stance aimed at cooling inflation. While tech stocks made new highs over the past two days new highs to new lows is much weaker this time around. This has also been the trend in $BPNDX all-year. We have so many large ‘’Open Gaps’’ below the market making it extremely difficult to be long the S&P for any length of time. Despite the surge in the S&P, volatility is non-existent. The lowest volatility year on record is 2017 and 2024 is now giving this year a run for its money. With NVIDIA reporting after the close this evening anything can happen. I will try where possible to be flat the S&P ahead of this key binary event. Meanwhile, I will continue to be a buyer on any dip lower to 5255/5270 with the same 5239 ‘’Closing Stop’’. The S&P has resistance from 5334/5350 where I will be a small seller with a higher 5363 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 5318. If I am taken long, I will have a T/P level at 5288.
EUR/USD
Currency Markets continue to trade in narrow ranges, and I am still flat. Today, I will continue to be a buyer of the Euro on any dip lower to 1.0760/1.0830 with the same 1.0695 ‘’Closing Stop’’. I still do not want to be short the Euro. If this view changes, I will be back with a new update for my Platinum Members.
Dollar Index
I am still flat the Dollar. This morning the Dollar is trading higher at 104.65. The Dollar is oversold now. We have short-term support from 103.45/104.15. I will now raise my buy level to this area with a higher 102.85 ‘’Closing Stop’’. I still do not want to be short the Dollar at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash DAX
My DAX plan worked well as the market traded lower to my 18660-buy level before rallying 80 points. This move higher saw my revised 18698 T/P level triggered and I am now flat. Today, I will again be a buyer on any dip lower to 18550/18630 with a lower 18475 ‘’Closing Stop’’. I still do not want to be short the market at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash FTSE
No Change: For the past week the FTSE has sat between 8390 and 8450 as the market tries to work off some of its overbought conditions. I am still short at an average rate of 8380 with a now higher 8340 T/P level. I will continue to look to add to this position again on any further rally to 8500 with the same no stop policy for now. 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 the Dow as the market goes on hold ahead of this Evening’s FOMC Minutes and NVIDIA earnings report. The Dow is overbought on a short-term basis. Given the valuations it is hard to be a buyer at these levels as outlined by JP Morgan CEO Dimon on Monday. The Dow has resistance from 40000/40250 where I will again be a seller with the same 40405 ‘’Closing Stop’’. I still do not want to be long the Dow at this time.
Cash NASDAQ 100
No Change: I am still short the NDX at an average rate of 18385 with the same no stop policy. With the NDX having risen over 10% in three weeks, I have decided to hold this short position for now. I will have a T/P level on this position at 18320. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
March BUND
No Change: I am still long the Bund at an average rate of 130.95. I will leave my 131.20 T/P level unchanged while leaving my 129.85 ‘’Closing Stop’’ at the same price. If any of the Above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Despite plenty of two-way price action in Precious Metals yesterday, I am reluctant to chase the price of Gold higher especially as the market is so close to all-time-highs. Gold has support below from 2382/2397 where I will continue to be a buyer with the same 2369 ‘’Closing Stop’’.
Silver Rolling Contract
Silver just missed yesterday’s buy range before rallying to close above $32. I will now raise my buy level to 30.50/31.30 with a higher 29.75 ‘’Closing Stop’’. Despite Silver been overbought, I have no interest in short the market under any circumstances given how undervalued in comparison to Gold this precious metal is. If I am taken long, I will have a T/P level at 32.10.
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