U.S. Equity Markets finished yesterday’s volatile session mixed after a late rally wiped most of the respective losses. Despite the Volatility, the VIX again closed lower by 2.43% signalling that Equity Markets are close to a tradeable bottom. The U.S. Bureau of Labour Statistics’ Producer Price Index data for April jumped 11% year over year compared with the anticipated rise of 10.7% and March’s upwardly revised 11.5%. Meanwhile, the U.S. Department of Labour said another 203,000 individuals filed Initial Jobless Claims in the week ending May 7, higher than the prior week’s upwardly revised figure of 202,000 and Wall Street’s consensus of 193,000. These factors combined could suggest interest rates may need to rise a lot higher to offset consumer costs and a tighter workforce, even if the jobless figure was slightly higher than anticipated. Within the S&P 500, six of the 11 sectors finished higher. European Markets closed lower. Russian Foreign Minister said Moscow is uninterested in a broader European conflict while accusing the West of pursuing policies hurting global economic growth. European Central Bank President Christine Lagarde said it would end bond purchases early in the Third Quarter and raise interest rates shortly after, implying the July policy meeting. The European Commission is said to have drawn up a draft proposal indicating it will require more than $205 billion in spending to achieve independence from Russian energy. U.K First-Quarter Gross Domestic Product growth was weaker than anticipated as monthly numbers indicated activity contracted in March. In Asia, Taiwan’s central bank said it is closely monitoring rising costs for businesses, adding that it will adjust monetary policy to offset inflation. South Korean Finance Minister Choo Kyung-ho called on central bank officials to stabilise prices, implying additional interest-rate hikes this year. The Bank of Japan’s summary of opinions from the most recent policy meeting indicated policymakers are unwilling to change their stance to boost the Yen. Shanghai officials found two new COVID-19 cases outside of quarantine areas, breaking the city’s target of three days without community transmission to ease restrictions. Elsewhere, Oil rose 0.95% as the European Union continues to investigate ways to reduce its reliance on Russia, while Bitcoin fell a further 1.5% on a broader Crypto sell-off.
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For anyone following my Platinum Service it made 157 points yesterday and is now ahead by 1264 points for May having made 762 points in April, following a gain of 5883 points in March. The Platinum Service made an impressive 5324 points in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss, having made 2466 points in November, 1028 points in October, 2866 points in September, 1543 points in August, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, after ending March with an impressive gain of 3769 points. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 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
The S&P 500 closed 0.13% lower at a price of 3930.
The Dow Jones Industrial Average closed 103 points lower for a 0.33% loss at a price of 31,730.
The NASDAQ 100 closed 0.18% lower at a price of 11,945.
The Stoxx Europe 600 Index closed 0.6% lower.
Yesterday, the MSCI Asia Pacific Index fell 1.1%.
Yesterday, the Nikkei closed 1.77% lower at a price of 25,748.
The Bloomberg Dollar Spot Index closed 0.8% higher.
The Euro closed 1.2% lower at $1.0375.
The British Pound closed 0.4% lower at 1.2189.
The Japanese Yen rose 1.6%, closing at $128.33.
Germany’s 10-year yield closed eight basis points lower at 0.88%.
Britain’s 10-year yield closed 16 basis points lower at 1.67%.
US 10 Year Treasury closed eight basis points lower at 2.85%.
West Texas Intermediate crude closed 0.95% higher at $106.52 a barrel.
Gold closed 1.65% lower at $1822.10 an ounce.
This morning on the Economic Front we have Euro-Zone Industrial Production at 10.00 am. This is followed by U.S. Import/Export Price Index at 1.30 pm. Finally, we have the University of Michigan Consumer Sentiment at 3.00 pm and a speech from ECB Member Schnabel at 5.00 pm.
Cash S&P 500
Yesterday was another wild ride for the S&P, hitting a post PPI high at 3964, before falling over 100 Handles late evening, hitting a new 2022 low at 3858 before rallying 70 Handles into the close. Yesterday, I mentioned there was risk of hitting 3870 which was the 2021 low plus 20% fall from the 2022 all-time high which the market did at about 8.00 pm. The two conditions that I looked for to say we have a meaningful bottom in this insanely oversold market was a rally in Bond Markets which we are certainly seeing since the 3.23% spike high in 10-Year Treasuries on Monday and a sell-off in the Dollar which has not happened with the Dollar now trading at 20-year highs. This has been an incredibly difficult market to call over the past six weeks given all the chop. The S&P is now on course for an unprecedented sixth consecutive down week unless the S&P can get back above 4060 this evening. Yesterday after the S&P hit my 3902 buy level I exited this position at 3922 to pay for losses elsewhere. I am still long at 4050 and I am encouraged by the price action in the VIX which is refusing to move higher. Today, I will again be a buyer of the S&P from 3875/3915 with a 3950 T/P level if executed and no stop for now. I will leave my T/P level at 4060 on my original 4050 long position from Monday with no stop and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Not a good day to be bullish of the Euro as yesterday morning I was stopped out of my 1.0565 long position at 1.0485 before buying the Euro again at an average price of 1.0455. I am still long given the fact that the DSI is in single digits. I have no stop on this position while lowering my T/P level to 1.0550.
March Dollar Index
I was stopped out of my short 103.30 Dollar position on the close last night at 104.42. I am still flat and as I am long the Euro I will stay flat the Dollar over the weekend.
Frustratingly, the DAX missed my initial 13460 buy level by 18 points before rallying 200 points into the New York close and I am still flat. I will not chase the DAX higher leaving my 13360/13460 buy level unchanged with the same 13285 tight stop. I still have no interest in pressing the downside given how oversold the DAX is at this time.
My FTSE plan worked well with the market trading lower to my 7160 buy level before rallying to my 7210 T/P level and I am now flat. With Gilt Yields falling a further 16 basis points yesterday I certainly would not be short the FTSE especially given the weakness in Sterling. Today, I will again be a buyer from 7100/7160 with the same 6995 wider stop.
Dow Rolling Contract
My Dow plan worked well as the market traded the whole of my buy range for a 31550 average long position before rallying into the close, enabling me to cover this position at my revised 31690 T/P level and I am still flat. The Dow made a new low for 2022 at 31228 before rallying 500 points into the close. The Dow is severely oversold. We have support from 31300/31600 where I will again be a buyer with no stop for now. Sentiment is on the floor as shown by the Fear & Greed Index closing last night at 6 which is ‘’Extreme Fear’’. This is one of the lowest readings on record.
Cash NASDAQ 100
No Change. The NDX hit my 11850 buy level before rallying to a rebound high above 12100, enabling me to cover this long position too early at 11909. With 10-Year Yields falling a further eight basis points yesterday it is in my opinion only a matter of time before we see buying in tech stocks again. I continue to nurse last month’s 14327 long position which I have now carried into May. I will now lower my exit level on this position to 14100 which I am hopeful we will see this month. With the McClellan Oscillator closing at –183 last night I will now look to add to my long position. The NDX has further support from 11700/11900 where I will be a buyer. If I am taken long I will have a T/P level at 12080.
The Bund has now rallied over 400 points off Monday’s low as this oversold Bond Market finally attracted some buying. I am not going to chase the Bund higher, and given the extent of the Bund move this week I will stay flat over the weekend.
Gold Rolling Contract
Gold got hit hard yesterday, trading lower to my 1823 buy level. I am still long with a now lower 1836 T/P level. I will add to this trade at 1808 while leaving my 1797 closing stop unchanged.
Silver Rolling Contract
Silver followed Gold lower yesterday. This move saw my 20.95 stop triggered on my 22.15 long position. I bought Silver again at a price of 20.80 with a now 21.40 T/P level and no stop for now.