U.S. Equity Markets rose yesterday as strong jobs data outweighed inflation fears, as the Dow led the US Indexes higher with a gain of 0.93%. Strong jobs data again served as a tailwind for markets. Jobless claims fell again, hitting another post-pandemic low and coming in below 500,000 for the first time in more than a year. This is another strong data point for the job market. We will look for more of the same in this afternoon’s NonFarm Payroll Report. The jobs data outweighed comments from Federal Reserve speakers. Dallas Fed President Robert Kaplan again reiterated that he thinks the Fed should begin discussing tapering bond purchases sooner rather than later. But Boston Fed President Eric Rosengren said it is too soon to talk about tapering central bank asset purchases. He stated there is still a lot of work to do on the employment front. European Markets closed lower despite positive Economic Data. European Central Bank Chief Economist Philip Lane said he does not believe this year’s inflation pressures are sustainable, implying monetary policy will remain unchanged. Euro-Zone Retail Sales data for March were stronger than expected, while the prior month was revised higher, signalling European consumer resilience. German Factory Orders beat expectations in March, with activity increasing for the third straight month, on strength in both domestic and international demand. The Bank of England became the second major central bank to pull back its asset purchases, saying that the economy should return to pre-pandemic levels by the end of the year. In Asia, China’s National Development and Reform Commission said it was indefinitely suspending all economic dialogue with Australia, potentially stoking regional political tensions. Bank of Japan Meeting Minutes indicated the central bank “isn’t adopting less accommodative policy” while agreeing to keep the yield curve low. China’s Communist Party Politburo said at a meeting last Friday it will continue to pursue prudent monetary policy while strengthening and improving regulatory supervision, worrying investors about the country’s growth outlook. Elsewhere, Oil fell 1.22% as rising coronavirus cases in India hurt the demand outlook for crude, while Gold surged 1.62% on Dollar weakness.
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For anyone following my Platinum Service it made 20 points yesterday and is now ahead by 159 points for May having closed April with a gain of 1244 points, having ended March with an impressive gain of 3769 points, having made 3286 points in February, 2077 points in January, 2273 points in December, 2025 points in November, 2779 points in October, 3042 points in September and 2383 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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The S&P 500 closed 0.82% higher at a price of 4201.
The Dow Jones Industrial Average closed 318 points higher for a 0.93% gain at a price of 34,548.
The NASDAQ 100 closed 82% higher at a price of 13,613.
The Stoxx Europe 600 Index closed 0.3% lower.
Yesterday, the MSCI Asia Pacific Index rose 0.5%.
Yesterday, the Nikkei closed 1.8% higher at a price of 29,331.
The Bloomberg Dollar Spot Index closed 0.4% lower
The Euro closed 0.5% higher at $1.2065.
The British Pound closed 0.2% lower at 1.3890.
The Japanese Yen rose 0.1%, closing at $109.07.
Germany’s 10-year yield closed one basis points higher at -0.22%.
Britain’s 10-year yield closed four basis points lower at 0.78%.
US 10 Year Treasury closed one basis points lower at 1.56%.
West Texas Intermediate crude closed 0.09% lower at $65.63 a barrel.
Gold closed 0.56% higher at $1,782.10 an ounce.
This morning on the Economic Front we have German Trade Balance and Industrial Production at 7.00 am. This is followed by UK Markit Construction PMI at 9.30 am. At 1.30 pm we have U.S NonFarm Payroll, Average Earnings and the Unemployment Rate at 1.30 pm. Finally, at 3.00 pm we have Wholesale Inventories.
June S&P 500
Yesterday was a frustrating session for my calls with the S&P falling shy of my 4137 buy level with a low of 4140 before turning around and surging over 50 Handles into the close. This latest move higher has me short at 4192. I will add to this trade at 4208 while raising my stop to a ‘’Closing Price’’ of 4221. I will now raise my T/P level to 4184 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
The Euro rallied yesterday, hitting my 1.2040 T/P level on my latest 1.2020 long position and I am now flat. Today, I will again be a buyer on any dip lower to 1.1970/1.2020 with a 1.1935 stop.
June Dollar Index
I am still flat. Ahead of the NFP data I will now lower my buy level to 90.20/90.65 with a lower 89.75 stop. If I am taken long I will have a T/P level at 90.95.
No Change. I am still flat and as I still have no edge in this market I am going to stay flat over the weekend.
Thankfully, we had no sell level in the FTSE yesterday with the market now trading over 130 points higher from where I marked prices 24 hours ago. The break and close over 7000 is bullish. As a result, I will now raise my buy level to 6980/7030 with a tight 6945 stop.
Dow Rolling Contract
The Dow continues to make new high after new high almost on a Daily Basis helped by the Fed pumping $120 bn of Monthly QE. The buy the dip continues to show up as the Fed buying assures the loosest financial conditions ever while growth is at its highest level in 50 years. This is a reckless policy and QE needs to stop or we are going to face all sorts of problems going forward. However, and this is where the Fed are trapped, as a tapering of QE could well cause the market to crash. The Dow has resistance from 34740/34890 where I will be a small seller with a 35005 ‘’Closing Stop’’. I will now raise my buy level to 34050/34220 with a 33895 ‘’Closing Stop’’.
Frustratingly, the NASDAQ missed my initial 13380 buy level by 8 points before surging over 200 points off this low print into the close. I still do not like the price action in the NASDAQ. We have resistance from 13680/13760 where I will be a seller with a 13825 stop. If I am taken short I will have a T/P level at 13615. I will now raise my buy level to 13320/13420 with a higher 13215 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 13495.
For the third consecutive trading session the Bund traded in a narrow range and I am still flat. Ahead of the NFP data this afternoon I will now lower my buy level to 169.30/169.80 with a lower 168.85 tight stop.
Gold Rolling Contract
Both Gold and Silver surged yesterday and I am still flat as none of these metals came close to my buy level. The break and close over 1800 in Gold is bullish and as a result I will now raise my buy level 1788/1802 with a higher 1779 stop.
Silver Rolling Contract
Silver closed higher by 4% yesterday as short positions capitulated. Silver has support from 26.10/26.70 and I will now be a buyer on any dip to this area with a 25.75 tight stop.