The Dow closed lower for the eighth day out of the last nine trading sessions while the NDX again closed higher with a 0.31% gain led by Google which closed 4.32% higher. For the second consecutive day, American Indexes reversed some of their post inflation sell-off. PPI is now at its lowest level since January 2021 while Jobless Claims rose 264K versus 245K expected. Elevated housing costs and a resurgence of higher gasoline prices proved to be strong headwinds towards lower inflation. But as we approach the peak months of inflation from last year, the yearly comparisons will be harder to match which should show inflation falling further. Initial Claims unexpectedly rose to their highest level since October 2021. Microsoft (MSFT) has decided to freeze salaries for all full-time workers this year citing uncertain macroeconomic conditions. This is just the latest sign from the tech industry that companies are pulling back on expenses. Following several rounds of job cuts and freezes on hiring, a pause to wage gains from other major companies would ease wage growth’s negative impact on inflation. Toyota (TM) announced a $7.4 billion investment into its own electric vehicle (“EV”) unit. The carmaker which is now under new management pledged to catch up to competitors in the EV sector and even projected over 202,000 EV sales for the current year which would be more than five times its sales from last year. President Joe Biden and his administration have been seeking contact with Chinese officials including President Xi Jinping to ease growing tensions between the two nations. Domestic advisors warn that geo-political ramifications could turn negative if China continues to ignore attempts from the U.S. European Markets closed lower. The Bank of England raised its key interest rate by 25 basis points, marking 12 consecutive rate hikes. The central bank matched decisions from the ECB and Fed this month but struck a more hawkish tone when projecting future rate increases. But this should come as no surprise as the U.K.’s inflation rate was among the highest of the Group of Seven nations in March. European Central Bank President Christine Lagarde expressed her concern that inflation could continue to be persistent if the central bank does not fully suffocate it with further rate hikes. While Euro-Zone inflation has come down off its peak, several regions are still experiencing double digit inflation rates. European Central Bank Governing Council Member Francois Villeroy de Galhau said that the central bank only has a marginal distance left to cover to combat high inflation. He asserted that the bulk of rate hikes already instituted would be enough to bring inflation down from its peak, and that any further rate-tightening would be marginal movements to ensure a long-term growth rate of 2%. In Asia, China’s consumer inflation slowed to its weakest pace in two years while producer prices continue to remain in a deflationary state. The economic recovery coming out of the pandemic lockdowns has hit a rocky patch lately with several indicators suggesting economic activity is stagnating. This will only fuel support for further fiscal stimulus measures to be taken by the Beijing government. Elsewhere, Oil closed 2.33% lower, while a strong Dollar saw Gold fall 0.50%.

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 made 278 points yesterday and is now ahead by 2345 points for May. 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 0.17% lower at a price of 4130.

The Dow Jones Industrial Average closed 221 points lower for a 0.66% loss at a price of 33,309.

The NASDAQ 100 closed 0.31% higher at a price of 13,389.

The Stoxx Europe 600 Index closed 0.065% lower.

This morning, the MSCI Asia Pacific closed 0.80% higher.

This morning, the Nikkei closed 1.01% higher at a price of 29,420.

Currencies 

The Bloomberg Dollar Spot Index closed 0.5% higher.

The Euro closed 0.5% lower at $1.0921.

The British Pound closed 0.8% lower at 1.2515.

The Japanese Yen fell 0.4% closing at $134.80.

Bonds

Germany’s 10-year yield closed 6 basis points lower at 2.29%.

Britain’s 10-year yield closed 4 basis points lower at 3.80%.

U.S.10 Year Treasury closed 8 basis points lower at 3.44%.

Commodities

West Texas Intermediate crude closed 2,33% lower at $70.87 a barrel.

Gold closed 0.50% lower at $2014.10 an ounce.

This morning on the Economic Front we already had the release of Q1 Preliminary GDP for the U.K which came in as expected with a +0.1% gain. We have speeches from the Bundesbank President Nagel at 8.15 am, ECB’s De Guindos at 9.00 am and the Import/Export Price Index at 1.30 pm. Finally, we have the University of Michigan Consumer Sentiment Index at 3.00 pm.

Cash S&P 500

Despite the continued negativity in the Dow, the S&P closed for the 9th day out of the past 20 trading days between 4130 and 4138. I do not know when this sequence will end but the tape is getting ever more ridiculous. Below the market keeps breaking while the NDX complex keeps holding up. At some point we will see a resolution between the real economy and the new A1 narrative high cap tech economy. The tech chart suggests to me an eventual massive breakdown coming as the reality economy stocks are signalling. Yesterday’s 4.32% rise in Google sees the stock way above its Daily Bollinger Band on what else but the latest A1 announcement. Only an insane person would buy Google against this extreme background.  Yesterday, my S&P plan worked well as the market traded lower to my 4109-buy level before rallying to my 4124 T/P level and I am now flat. One of these days my buy strategy is not going to work so we have to be careful with stops. The big question today is will the VIX get crushed for the eighth consecutive Friday leading to another melt up in the S&P. I am not going to bet against this trend. As a result, I will have no sell level for today in the S&P. The S&P has support from 4093/4108 where I will again be a buyer with a higher 4079 ‘’Closing Stop’’.

EUR/USD

The Euro sold off as I posted my Daily Commentary yesterday morning. This move lower saw my 1.0920 second buy level triggered for a now 1.0952 average long position. I will leave my 1.0865 ‘’Closing Stop’’ unchanged while lowering my T/P level to 1.0995. If any of the above levels are hit, I will be back with a new update for my Platinum Members.

June Dollar Index

I am still flat the Dollar. I will now raise my buy level to 100.90/101.50 with a higher 100.25 ‘’Closing Stop’’.

Cash DAX

No Change. I do not like the price action in the DAX given the economic background and the way overvalued stock prices. This morning, the DAX is trading at 15840. I will leave my sell level unchanged at 15940/16030 with a the same 16105 ‘’Closing Stop’’.

Cash FTSE

My FTSE plan worked well as the market traded lower to my 7690-buy level before rallying to my revised 7728 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 7580/7660 with a 7515 ‘’Closing Stop’’. Despite the Bank of England hiking rates, I still do not want to be short the FTSE at this time.

Dow Rolling Contract

The Dow got hit hard yesterday hitting my 33300-buy level with a 33115 low print. This morning the Dow is rallying as I go to post. Given my nervousness for the underlying economy I have now exited this long position here at my revised 33390 T/P level and I am now flat. Internally the market is weak as shown by the McClellan which closed with a negative 85 print last night. I will now lower my Dow sell level to 33600/33850 with a lower 34005 ‘’ Closing Stop’’. My only interest in buying the Dow is on a further move lower to 32700/32900 with a tight 32595 ‘’Closing Stop’’.

Cash NASDAQ 100

Despite the slowing economy the NDX continues to make new 2023 recovery highs led by the handful number of stocks that holding the whole market up. Overnight the NDX hit my 15420-sell level. I am still short, and I will add to this trade at 15580 while leaving my 15705 ‘’Closing Stop’’ unchanged. I will have a T/P level on this short position at 15330. If any of the above levels are hit, I will be back with a new update for my Platinum Members.

June BUND

Weaker than expected U.S. PPI saw the Bund rally for the second consecutive session. I am still flat as the Bund never came close to my buy range. I will again raise my buy level to 135.00/135.80 with a higher 134.45 ‘’Closing Stop’’.

Gold Rolling Contract

No Change. I am still a buyer on any dip lower to 1983/1998 with the same 1975 ‘’Closing Stop’’. If triggered I will have a T/P level at 2009.

Silver Rolling Contract

The stronger Dollar saw Silver get hard yesterday. This move lower saw my 24.60 second buy level executed for a now 25.00 average long position. I will leave my 23.85 ‘’Closing Stop’’ unchanged while lowering my T/P level to 25.60. If any of the above levels are hit, I will be back with a new update for my Platinum Members.