Stocks closed higher for the first time in five days on renewed optimism that an all-out trade war can be averted even after the U.S. decision to slap fresh tariffs on Chinese goods last Friday morning. While a late-day push sent the S&P 500 into positive territory, the bellwether still finished down on the week by the most since just before Christmas. Ten of the 11 industry sectors gained after all started the day in the red. U.S. and Chinese officials wrapped up high-level trade talks on Friday, lacking a deal yet avoiding a breakdown in negotiations even after President Donald Trump boosted tariffs on $200 billion in goods and threatened to impose more. In Asia, the Shanghai benchmark jumped 3.1% as Chinese state-backed funds bought domestic shares. Treasuries continued to benefit as investors sought havens, with the benchmark 10-year note yield ending the week lower. The dollar weakened after a report showed inflation rose less than forecast in April. Still, with China yet to specify how it will retaliate against U.S. duties, investors stumbled to the end of a bruising few days after seeing almost $600 billion in equity market value wiped out. The U.S. gave its bottom line in talks in Washington, saying Beijing had three to four weeks more to reach an agreement before the Trump administration acts again. However after more tweets from President Trump over the weekend Stocks in Asia fell along with U.S. Equity Futures, the yuan and Treasury yields as investors awaited details on the counter-measures China warned it would impose following last week’s escalation in the trade war between the world’s top two economies. With no date scheduled for a resumption in bilateral talks, shares dropped in Shanghai and Seoul, while declines were more limited in Tokyo. Hong Kong is closed Monday for a holiday. S&P 500 Index Futures fell as much as 1.2%, as most of Friday’s late gains were reversed overnight.
To mark my 1825th 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@tradernoblecom for details
For anyone following my Platinum Service it made 70 points on Friday and is now ahead by 1021 points for May, having made 955 points in April, 1027 points in March, 1013 points in February, 1671 points in January, 2803 points in December, 1541 points in November and 2094 points in October. 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 Index rose 0.4% to close at 2881 on Friday. However this morning the S&P is trading 1.2% lower at 2854 following news that Trump weighed in further on the state of trade negotiations with China, saying that the U.S. was “right where we want to be” and that it would be wise for China to “act now” to complete a trade deal. Larry Kudlow, Trump’s top Economic Adviser, told Fox News that China invited trade representative Robert Lighthizer and Treasury Secretary Steven Mnuchin back to Beijing, though no date has been set. He also said Trump would meet with Chinese President Xi Jinping during the G20 meeting in late June. The Nasdaq Composite Index slumped 0.1% and the Dow Jones Industrial Average gained 0.4%. Meanwhile in Europe the Stoxx Europe 600 gained 0.3%, but this market is also opening sharply lower this morning.
The Bloomberg Dollar Spot Index fell 0.1%. The Euro rose 0.2% to $1.1233 in New York on Friday and is opening unchanged in London this morning, while the yen strengthened 0.2% to 109.90 per dollar. Elsewhere, emerging-market currencies strengthened. South Africa’s rand gained as the African National Congress headed toward victory in a national election, and the lira rallied as Turkish banks bought the currency in Asia hours.
The yield on 10-year Treasuries rose 2 basis points to 2.46%. Meanwhile in Europe, Germany’s 10-year yield was little changed at negative 0.05%.
West Texas Intermediate fell 0.2% to $61.57 a barrel. Gold gained 0.2% to $1,286 an ounce. The Bloomberg Commodity Index rose 0.1%. Bitcoin advanced for a 10th day, the longest winning streak since 2017, the year of its historic leap to almost $20,000. This morning Bitcoin climbed above $7,000 as the recent gains in cryptocurrencies extended over the weekend. Base metals retreated as traders reassessed the demand outlook give the threats to global economic growth.
This morning on the Economic Front we have no data of note from either the UK or the Euro-Zone. It is also a quiet day for US Economic Date in the U.S.. This afternoon the Fed’s Rosengren and Clarida are both speaking at 2.10 pm.
June S&P 500
Friday was another wild trading session for the S&P. Having made an early morning high at 2889, the S&P slumped to an intra-day low of 2825. This move lower had me long at an average rate of 2838, with the market accelerating lower on the break of the 50 Day Moving Average which comes in at 2862 this morning. However a massive rally ensued at 4.00 pm London Time with the S&P Futures Contract closing near the highs of the session at 2885. Unfortunately I covered my long position for a small gain at 2842 as I wanted to be flat over the weekend. This morning the S&P has reversed most of Friday’s late gains to trade at 2853 as I go to press. As the last six trading sessions have shown it is now difficult to have an overnight position. Today I will again look to buy the S&P on any further dip lower to 2834/2846 with a 2823 wider stop. Again if I am taken long and subsequently stopped out of this position I will be a more aggressive buyer from 2795/2808 with a 2787 stop.
No Change as I am still a small seller on any further rally to 1.1280/1.1320 with the same 1.1345 tight stop. I will now look to buy the Euro from 1.1100/1.1140 with a 1.1065 stop.
June Dollar Index
The boring sideways action in the Dollar shows no sign of ending and I am still flat. Today I will again leave my 97.70/98.10 sell level unchanged with the same 98.45 stop.
I am reluctant to chase the DAX lower given how well it has outperformed the US Indices over the past two weeks. Today I will leave my 12220/12280 sell level unchanged with the same 11325 stop. The DAX has strong support from 11750/11850 and I will be a buyer in this area with a 11685 stop.
Despite weekend pools showing increased support for Nigel Farge’s Brexit Party the Pound is opening unchanged against the US Dollar this morning at 1.3013. I am still flat the FTSE and today I will now lower my buy level slightly to 7070/7110 with a lower 7035 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
My Dow plan certainly worked well on Friday with the market testing its 200 Day Moving Average with a low of 25469 before rallying an incredible 500 points into the close. This move lower saw me buy the Dow at a rate of 25540. Unfortunately as I was still in Malaysia on Friday which is seven hours ahead of London I covered this long position at a price of 25570 as I was still long the S&P and I am now flat. The huge late rally in the Dow saw the VIX reverse its 23 early morning high to close at 16.04 on Friday evening. The 20 level is key resistance for the VIX as a break and close over this level will see a large move lower in the Dow. This morning the Dow is trading 280 points lower at 25700 as we wait for the US Markets to open. As long as the Dow can hold the key 25400 support level I will continue to be a buyer on dips. Today I will again look to buy the market from 25450/25600 with a 25375 stop.
Frustratingly the NASDAQ missed my 7440 buy level with a 7444 low print before rallying nearly 100 points into the close and I am still flat. Today I will lower my buy level slightly to 7360/7420 with a 7315 tight stop.
I am still flat the Bund and this morning I will now lower my sell level to 166.60/167.00 with a lower 167.35 stop. Given the insanely negative yield for the Bund I still do not want to be long the market at this time.
Gold Rolling Contract
No Change as my only interest in buying Gold is on a dip lower to 1258/1266 with the same 1249 stop.
Silver Rolling Contract
No Change as I am still long the market form last week at 14.80. I will leave my stop unchanged at 14.45 and today I will now lower my T/P level on this position to 14.85. If any of the above levels are hit I will be back with a new update for my Platinum Members.