The world economy’s most important week of the year? Each day this week we have a market moving event. Each carries the potential to propel financial markets and shape the outlook for global growth after signs it slowed in the first quarter.
So here’s what to watch for:
Investors get their first opportunity to pass judgment on what happened at the summit of leaders from the Group of Seven. The gathering ended with President Donald Trump broadsiding allies via Twitter, undermining the bloc and potentially causing fresh friction over trade. As I post this commentary Equity Markets are opening lower while Bitcoin is down 12% after a Korean Exchange was hacked.
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For anyone following my Platinum Service it made 195 points on Friday and is now ahead by 154 points for June, having made 1927 points in May, 1657 points in April, 1760 points in March, 2256 points in February, 879 points in January and 946 points in December. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Trump and North Korea leader Kim Jong Un convene in Singapore for their on-off summit, the first such meeting ever. Trump last week predicted “great success” and said it’s possible he could sign an agreement with Kim to formally end the Korean War. Back in Washington, the government releases a monthly report on inflation that will be a key gauge of how hot — or not — the U.S. economy is getting.
U.K. Prime Minister Theresa May’s flagship Brexit legislation returns to the lower House of Commons after receiving a battering in the upper House of Lords, where it was amended 15 times. Ministers will be trying to overturn most of those defeats, with a combination of compromises and attempts to win rebel pro-EU lawmakers round. In two days of debating and votes on Tuesday and Wednesday, the key questions are about what kind of vote Parliament gets on the final Brexit deal, and whether Britain should be trying to stay in a customs union
The U.S. Federal Reserve is set to hike its benchmark interest rate for a second time this year. Chairman Jerome Powell holds a press conference, and he and his colleagues will also publish new projections which could show them tilting toward four increases this year as a whole, rather than the three they hinted at in March. Elsewhere, Argentina’s Central Bank is expected to keep its benchmark rate 40 percent as it tries to stabilize the peso.
The European Central Bank is shifting closer to the end of its bond-buying programme with Thursday’s meeting of policy makers poised to hold the first formal talks on when and how to do it. About a third of respondents to a Bloomberg survey of economists predicted President Mario Draghi will set an end-date for purchases today, while 46 percent said he will wait until July to reveal details.
The Bank of Japan is likely to end the week exactly where it started with no tightening of monetary policy on the agenda. The BOJ is still buying vast quantities of Japanese government bonds and will have been encouraged to keep doing so by data showing its still far off its 2 percent inflation target and that the economy shrank in the first quarter.
This morning on the Economic Front we have UK Trade Balance and Industrial Production. We have no data of note due from either the Euro-Zone or US.
June S&P 500
My S&P plan worked well on Friday with the market trading the whole of my buy range for an average long position at 2755 before rallying 25 Handles. As all five of my Indices hit at or near the same time I covered my S&P position too early at 2760 as I wanted to finally get June off to a positive start after a frustrating week and I am now flat. Today I will again look to buy the S&P on any dip lower to 2758/2768 with a 2751 stop. I will continue to be a seller on any rally higher to 2795/2805 with the same 2812 stop. Again of I am taken short and subsequently stopped out of this position I will be a more aggressive seller from 2825/2845 with a 2853 stop.
No change as I am still a buyer on any dip lower to 1.1655/1.1695 with the same 1.1625 stop. The Euro has strong resistance from 1.1880/1.1920 and today I will be a seller in this area with a 1.1950 stop.
September Dollar Index
I have now rolled to the September Contract which trades at a 45 point discount to the June Contract. Today I will look to be a seller in the September Contract on any rally higher to 93.90/94.30 with a 94.65 stop. I still do not want to be long the Dollar at this time.
My DAX plan worked really well on Friday with the market trading lower to my 12610 buy level shortly after the European Markets opened before rallying to my 12645 T/P level and I am now flat. Subsequently the DAX rallied another 200 points on the back of the stronger US Markets and weaker Euro as thankfully we had no sell levels in the market ahead of Thursday’s key ECB Meeting. Today I will again look to buy the DAX on any dip lower to 12610/12690 with a 12540 stop.
My FTSE plan also worked well with the market trading lower to my 7640 buy level before also rallying to my 7670 T/P level and I am now flat. The FTSE is still underperforming the other main Indices but despite the negative price action I have no interest in going short the market. Today I will again look to buy the FTSE on any dip lower to 7600/7640 with a 7570 stop.
Dow Rolling Contract
My Dow plan worked with the market trading lower to my 25080 buy level before lunch before spending the rest of Friday’s trading session moving higher which allowed me to cover my long position at my 25145 T/P level and I am now flat. This morning the Dow is opening lower as we face the most important economic week of the year to date. Today I will again look to buy the Dow on any dip lower to 25040/25170 with a 24950 stop. I do not want to be short the market at this time.
The NASDAQ also traded lower to my 7080 buy level before rallying. As I wanted to book the nice gains made on Friday I emailed my platinum Members to exit any long position at 7095 and I am now flat. Today I will again look to buy the market on any dip lower to 7050/7090 with a 6995 stop. I still do not want to be short the NASDAQ at this time.
The Bund came nowhere near my buy level on Friday before rallying and I am still flat. Today I will move my buy level slightly higher to 159.30/159.70 with a 158.95 stop.
Gold Rolling Contract
No change as I am still a buyer on any dip lower to 1282/1289 with the same 1275 stop.
Silver Rolling Contract
I am still long at 16.75 with the same 16.30 stop and 17.05 T/P level. If either of these levels are hit I will be back with a new update for my Platinum Members.