U.S. stocks climbed the most since January as Federal Reserve Chairman Jerome Powell signalled an openness to lower Interest Rates and Mexican officials said they expect to avoid Trump Administration Tariffs. US Large banks surged while Treasury yields rose from multiyear lows as Powell stopped short of signalling an imminent move. Car makers and chip manufacturers rallied as Mexico’s president said he hopes to reach a deal with the U.S. before next week’s deadline, with his Foreign Minister seeing 80% odds to negotiate a solution. The Peso jumped has a result. Later in day, the Washington Post reported that Republican senators warned the Trump administration officials they were ready to block efforts to impose duties on Mexican imports. Economists see U.S. tariffs on those goods denting growth and adding to headwinds that could prompt both countries to cut interest rates in the next year.
To mark my 1850th 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 lost 147 points yesterday and is now down by 52 points for June, having made 1722 points in May, 955 points in April, 1027 points in March, 1013 points in February and 1671 points in January. 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
Given the ongoing uncertainty on both the interest rate and trade front, any clarity will likely be welcomed by the market. A lot of market-watchers will be reading the tea leaves from this week’s jobs data, which could hold significant weight for the Fed’s next rate move. The S&P 500 surged 2.1% to close at 2,803.27, 75 Handles above its Monday low. Elsewhere, gains in automakers and banks pushed European stocks higher, with Stoxx Europe 600 Index climbing 0.6%. Overnight the Nikkei rallied to close 1.8% higher at 20,776.
Currencies
Fed Chair Powell’s comments on Lower rates saw the Bloomberg Dollar Spot Index fall 0.2%, while the Euro gained 0.2% to $1.1266. Meanwhile the British Pound seems to have found a bottom at Monday’s 1.2580 low closing 0.3% higher at $1.2701.
Bonds
In Bonds, the yield on 10-year Treasuries climbed five basis points to 2.12% with the German Bund closing flat at -0.21% and the UK Gilts rising four basis points to 0.902%.
Commodities
Oil rebounded as signs of tightening supply from OPEC temporarily overshadowed concern over global demand, with WTI rising 0.4% to $53.48 a barrel. However, WTI is still close to 20% lower since the end of April. Bitcoin fell as much as 12%
This morning on the Economic Front we have German, Euro-Zone and UK Markit Services PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed at 10.00 am by Euro-Zone PPI and Retail Sales. At 12.00 pm we have US MBA Mortgage Applications followed by the ADP Employment Report at 1.15 pm. Next we have the US Markit Services PMI and a speech by Fed Member Clarida at 2.45 pm. Finally we have the ISM Non-Manufacturing at 3.00 pm and the Fed’s Beige Book at 7.00 pm.
June S&P 500
We got a clear hint from the McClellan Oscillator’s rally on Monday despite the fall in the S&P not to be short the S&P yesterday. Last night the MO improved again from Monday’s -109 close to finish with a reading of -2. However I did not see the S&P rallying 60 Handles from Monday’s close as yet again anyone shorting the market got slammed. As I was short the Dow and wrong I did not sell the S&P as I had enough short exposure and I am still flat. The fact that the S&P broke its 2774, 200 Day Moving Average so easily was a warning for much higher prices. Today, I will move my buy level higher to 2772/2787 with a 2764 stop. Building value and settling below 2750 will tell me to set up short positions for 2720 and lower. Building value above 2850 and settling above 2860 tells us to reset long positions for a move to new highs.
EUR/USD
Frustratingly the Euro just missed my 1.1220 buy level with a 1.1226 low print before rallying to close at 1.1266 and I am still flat. Today I will move my buy level slightly higher to 1.1190/1.1230 with a 1.1155 stop. Although the Euro has resistance at 1.1300 I do not want to be short the market at this time.
June Dollar Index
I am still flat the Dollar and today I will lower my sell level to 97.40/97.80 with a 98.20 stop.
June DAX
Thankfully we had no sell level in the DAX yesterday as the market rallied from the off, easily braking above its 11800/11850 resistance level to trade at 11970 this morning. Today I will be a buyer on any dip lower to 11810/11880 with a 11755 stop.
June FTSE
I am still flat the FTSE and reluctant to chase the market higher given the fact that Sterling looks poised to rally. Today my only interest in buying the market is on a dip lower to 7105/7155 with a 7070 stop.
Dow Rolling Contract
My Dow plan did not work well with the market exploding to the upside for an average short position at 25225 before getting stopped out of this position after the Cash Market closed at 25385 and I am now flat. It is hard to believe that when I posted on Monday Morning the Dow was trading at a price of 24620. A combination of short-term oversold conditions and dovish comments from Fed Chair Powell and some other members of the Fed gave a huge lift to the Dow yesterday. The inability of the VIX to climb back above 20 on Monday helped contain the rout in the market over the past week. The VIX closed 9.50% lower at 17.06 last night to sit just above its 200 Day Moving Average which comes in at 17.02 this morning. Today I will be a buyer of the Dow on any dip lower to 25020/25190 with a 24930 stop.
June NASDAQ
This has been a frustrating week with the S&P just missing my 2728 buy level on Monday while at the same time I was stopped out of my long NASDAQ position near the low of Monday at 6965. This morning the NASDAQ is trading at 7190 having hit a high overnight of 7220. As I mentioned in yesterday’s commentary the market needed to break back above 7125 and this was accomplished with ease in yesterday’s session. Today I will now move my buy level higher to 7075/7135 with a 7025 stop.
September BUND
While the US Bond market finally sold off from overbought conditions as alluded to at length in yesterday’s commentary the Bund closed unchanged. This morning the Bund traded higher to my 171.25 sell level.I am still short and I will no lower my stop on this position to 171.55. I will also raise my T/P level on this position to 170.95 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
There is no stopping the Gold rally which is now trading at 1335 just $12 below its 1347 high for the year. I am still flat and today I will now raise my buy level to 1310/1319 with a 1302 stop.
Silver Rolling Contract
Shortly after I posted yesterday morning Silver traded lower to my 14.70 buy level before rallying to my revised 14.83 T/P level and I am now flat. Silver is still underperforming the massive rally in Gold over the past 10 days and today I will be a buyer from 14.35/14.75 with a 13.95 stop.
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