Despite much weaker than expected Payroll data U.S. equity markets rose to end the week with all three Indexes closing in positive territory, helped by the fact that both the Dow and S&P closed at new all-time highs. Jobs data were once again the big story. Non-Farm payrolls fell well short of estimates, while the Unemployment rate unexpectedly rose. There was some focus on how enhanced unemployment benefits were keeping people out of the job market. While this is not a good sign for the economic recovery, it likely forces the Federal Reserve to keep policy extremely accommodative. And given the fears over rate hikes or tapered bond purchases recently, any reason for stimulus to remain in effect will send markets higher (like it did on Friday). Meanwhile, the White House signalled a willingness to compromise on its corporate-tax rate plan as a way to pay for its $2.3 trillion infrastructure proposal. Specifically, President Joe Biden said he would be okay with a corporate tax rate of 25% to 28% (versus the initial 28% proposal). European Markets again closed lower despite better than expected Economic Data. German Industrial Production data for March were better than expected due to strength in construction and consumer-goods production. European Central Bank Governing Council Member Isabel Schnabel warned the slow pace of global economic recovery outside of the U.S. and China may warrant extended stimulus. ECB Governing Council Member Martins Kazaks said it was possible the central bank could slow its bond buying in June if the Euro-Area economy continues to recover. But he echoed Schnabel, saying that the regular Quantitative Easing could be extended. In Asia, Markit Japan’s final composite purchasing managers’ index (“PMI”) data for April rose versus the initial reading, as the rate of contraction in the services sector continued to ease. Markit/Caixin’s China composite PMI data for April gained versus March, marking the 12th straight month of expansion, as new orders increased. It also marked the fastest rate of expansion in four months. Taiwan’s consumer price index data for April exceeded expectations, rising above the 2% level for the first time since February 2018. Elsewhere, Gold rose a further 0.95% while Bitcoin jumped 2.85% on reports that Citibank would become the latest large bank to offer cryptocurrency services.
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For anyone following my Platinum Service it lost 180 points on Friday and is now down by 21 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 0.74% higher at a price of 4232.
The Dow Jones Industrial Average closed 226 points higher for a 0.66% gain at a price of 34,777.
The NASDAQ 100 closed 0.78% higher at a price of 13,719.
The Stoxx Europe 600 Index closed 0.3% lower.
Last Friday, the MSCI Asia Pacific Index fell 0.2%.
Last Friday, the Nikkei closed 0.09% higher at a price of 29,357.
The Bloomberg Dollar Spot Index closed 0.6% lower
The Euro closed 0.8% higher at $1.2161.
The British Pound closed 0.7% higher at 1.3986.
The Japanese Yen fell 0.4%, closing at $108.60.
Germany’s 10-year yield closed one basis points higher at -0.21%.
Britain’s 10-year yield closed one basis points higher at 0.77%.
US 10 Year Treasury closed one basis points higher at 1.57%.
West Texas Intermediate crude closed 0.06% higher at $65.69 a barrel.
Gold closed 0.95% higher at $1,830.10 an ounce.
This morning on the Economic Front we have Euro-Zone Sentix Investor Confidence at 9.30 am. The only other data of note is ISM New York Business Conditions at 1.30 pm.
June S&P 500
Despite one of the largest ‘’misses’’ ever in NonFarm Payrolls, the S&P shrugged off earlier losses to surge and close at yet another all-time high on the basis that the number was so bad that the Fed cannot raise Interest Rates. After the S&P hit my second sell level for a 4200 average short position the market just missed my 4193 revised T/P level before stopping me out on the close at 4222 and I am still flat. The S&P has now made a new high every month since last November’s Presidential Election when we were trading at a price of 3210. We have now rallied over 1000 Handles for a 32% gain and are comfortably above the third standard deviation above ”Fair Value” which in my opinion is not sustainable. The top of the trendline crosses at 4287 and maybe we do hit this level first before we roll over. If it was not for the underperforming NASDAQ we would be above this trendline by now. The S&P has further resistance from 4247/4262 where I will again be a seller with a 4274 ‘’Closing Stop. We have support from 4182/4197 where I will be a buyer with a 4169 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 4232. If I am taken long I will have a T/P level at 4209.
The Euro rallied 1% on Friday after the release of the NFP data and I am still flat. The Euro has short-term resistance from 1.2195/1.2235 where I will be a small seller with a 1.2271 stop. I will now raise my buy level to 1.2070/1.2110 with a higher 1.2035 stop. If I am taken short I will have a T/P level at 1.2165. If I am taken long I will have a T/P level at 1.2145.
June Dollar Index
The sell-off in the Dollar saw the whole of my buy range get filled for a now 90.35 average long position. I will leave my stop unchanged at 89.75 while lowering my T/P level on this position to 90.60. If any of the above levels are executed I will be back with a new update for my Platinum Members.
The DAX gave a false break when we closed below 14900 last Tuesday as the market is now trading 500 points higher at 15400 as I go to press. We have resistance from 15540/15600 where I will be a small seller with a 15665 tight stop. If I am taken short I will have a T/P level at 15485.
The FTSE continued to build value above 7000, trading at 7120 as I go to press and I am still flat. We have resistance from 7175/7225 where I will be a small seller with a 7271 tight stop. If I am taken short I will have a T/P level at 7140.
Dow Rolling Contract
The Dow has now rallied 1100 points off the low following Yellen’s comments last Tuesday as anyone trying to short this market gets slammed including me over the past few weeks. The non-confirmation between the Dow and the NASDAQ continues while the RSI again closed over 70 on Friday. Just before the close on Friday, the Dow rallied to my 34760 sell level. I am still short and I will add to this trade at 34940 with a now higher 35025 ‘’Closing Stop’’. The Dow has support from 34360/34540 and I will now raise my buy level to this area with a tight 34195 ‘’Closing Stop’’. I will now raise my T/P level on my short position to 34680. If I am taken long I will have a T/P level at 34670.
The NASDAQ made an intra-day high of 13810. This move higher had me short at an average rate of 13730. Subsequently we sold off to my 13690 revised T/P level and I am still flat. The NASDAQ has resistance from 13820/13900 where I will again be a seller with a 14005 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 13755.
No Change. I am still a buyer on any dip lower to 169.30/169.80 with the same 168.85 stop. If I am taken long I will have a T/P level at 170.10.
Gold Rolling Contract
No Change. I will not chase the price of Gold higher, leaving my 1788/1802 buy level unchanged with the same 1779 stop. If I am taken long I will have a T/P level at 1811.
Silver Rolling Contract
I am still flat and I will now raise my buy level to 26.50/27.10 with a higher 25.95 stop. If I am taken long I will have a T/P level at 27.40.