Friday saw buyers return as U.S. Equity Markets closed higher led by the 3.7% rise in the NASDAQ 100. This move higher saw the VIX close a further 9% lower at a price of 28.87. Last Thursday, U.S. Federal Reserve Chairman Jerome Powell said that getting inflation under control could result in short-term disruptions to economic activity. Powell noted that the central bank’s plan to reduce inflation to 2% through half-percentage-point increases would likely result in some pain, as prices remain elevated across several sectors. Still, stocks trended higher on Friday across major Indexes thanks to investors buying up shares of beaten-down technology stocks like Netflix (NFLX), Nvidia (NVDA), and PayPal (PYPL). This helped fuel a rally, as many investors also shifted their portfolios toward more defensive investments to protect against a potential recession. Within the S&P 500, all 11 sectors finished higher. European Markets closed higher. European Central Bank (“ECB”) Governing Council Member Gabriel Makhlouf said the ECB is ready to raise interest rates for the first time since 2011 and that they should be back above zero by early 2023. Meanwhile, ECB Governing Council Member Peter Kazimir said it is prepared to raise interest rates at the July policy meeting as well. Russia’s government said it would be forced to take retaliatory steps to neutralise any national security threats if Finland decides to join NATO. Euro-Zone Industrial Production contraction for March was worse than expected as factory output in Germany slowed. In Asia, Bank of Japan Governor Haruhiko Kuroda said the central bank will continue to pursue easy-money policies to support economic growth. Han Wenxiu, Chinese deputy head of the Office for Financial and Economic Affairs, said the government will introduce economic policy support when it is necessary. Japanese Finance Minister Shunichi Suzuki noted a rapid drop in the yen is “undesirable,” but it will likely boost the outlook for exporters. Wu Qing, Shanghai’s Vice Mayor, said the city is trying to reach zero community transmission of COVID-19 by mid-May, with an orderly opening-up shortly thereafter. Elsewhere, Oil rose 3.82% over fears that Europe will ban Russian energy supplies, while Gold fell 0.55% on little news.

To mark my 2550th 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@tradernoble.com for details

For anyone following my Platinum Service it was flat on Friday and is still 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

 

Equities

 

The S&P 500 closed 2.39% higher at a price of 4023.

The Dow Jones Industrial Average closed 466 points higher for a 1.47% gain at a price of 32,196.

The NASDAQ 100 closed 3.7% higher at a price of 12,387.

The Stoxx Europe 600 Index closed 1.8% higher.

Last Friday, the MSCI Asia Pacific Index rose 1.4%.

Last Friday, the Nikkei closed 2.64% higher at a price of 26,427.

Currencies 

The Bloomberg Dollar Spot Index closed 0.2% lower.

The Euro closed 0.3% higher at $1.0410.

The British Pound closed 0.5% higher at 1.2260.

The Japanese Yen fell 0.8%, closing at $129.21.

Bonds

Germany’s 10-year yield closed six basis points higher at 0.94%.

Britain’s 10-year yield closed seven basis points higher at 1.74%.

US 10 Year Treasury closed eight basis points higher at 2.93%.

Commodities

West Texas Intermediate crude closed 3.82% higher at $110.04 a barrel.

Gold closed 1.65% lower at $1812.10 an ounce.

This morning on the Economic Front we have U.K and Euro-Zone Trade Balance at 7.00 am and 10.00 am respectively. This is followed by U.S. New York State Empire Manufacturing Index at 1.30 pm. Finally, we have the Net Long-Term TIC Flows at 9.00 pm.

Cash S&P 500

We finally got a bounce on Friday after four frustrating trading sessions. This latest move lower saw the S&P test the 3870 key support level on Thursday. The S&P rallied strongly after it was confirmed  that Powell had been re-confirmed as Fed Chair for a second-term. Are the lows in after the S&P bounced after joining the NDX and Russell by falling over 20%. There is a fair chance that that this is the case but we need to see some further follow through, while a close over 4080/4100 would be positive. However, given the carnage over the past six weeks this will not be straight forward which should generate plenty of two-way price action. Remember Friday’s bounce is coming from some of the most oversold readings that I have ever seen. I am still long the S&P from last Monday at an average rate of 4050. To reduce my exposure I will now exit this long position at 4045, giving me some room to hopefully re-buy at a lower level. The S&P has support from 3950/3980 where I will again be a buyer with a 3925 stop. If I am taken long a second time, I will have a T/P level at 4005. The S&P closed lower for an unprecedented sixth consecutive week and this should help support the market this week. If any of the above levels are hit I will be back with a new update for my Platinum Members.

EUR/USD

No Change. I am still long from last Thursday at 1.0455 with the same 1.0550 T/P level. The Euro is severely oversold and despite all the paper talk that the Euro will soon break ”parity” I am still bullish given how oversold the Euro is especially as the  DSI is in single digits. I continue to have no stop on this long position for now. The Weekly RSI is the most oversold since the 2015 bottom when the Euro was trading at 1.05. Three months later the Euro was trading at 1.17.

March Dollar Index

The Dollar closed at a 20 year high on Friday. My Charts are telling me the Dollar is a screaming sell given how overbought the market is. On most models the Dollar is now overvalued by close to 15%. Today, I will again be a seller from 104.70/105.30 with a 106.05 stop. If I am taken short I will have a T/P level at 103.80.

Cash DAX

The DAX soared on Friday, closing above 14000 as thankfully we had no sell level in this market. The DAX has room to rally back above 15000 as we have had no reconnect with its 200 Day Moving Average since the break lower in February. I will now raise my buy level to 13800/13900 with a 13695 stop I still have no interest in pressing the downside given how oversold the DAX is at this time.

Cash FTSE

The FTSE soared again on Friday, and I am still flat. This morning the FTSE is trading at 7400. We have support from 7280/7340 and I will now raise my buy level to this area with a 7225 tight stop.

Dow Rolling Contract

To Put into context the level of carnage so far in 2022: Netflix is down 70.2% – worst year on record, Facebook -44% worst on record, Amazon -37% worst year since 2008, Tesla – 31% worst year ever and Apple – 18% which is also having its worst year since 2008. The last 90 days have seen the most losses in any given year since 1932. We are truly witnessing an historic moment with these numbers above. Last Wednesday week – which was the Fed Meeting – the Dow closed over 34,000, before falling 3000 points in the next six days for the most points lost ever in such a short period of time. My own view is given how oversold the American Markets are at this time, is that we definitely put in a meaningful bottom across the board at 8.00 pm on Thursday. Internally, the market has improved with the McClellan Oscillator closing at -44 on Friday. Once the Dollar starts to weaken then we should see the Dow recover back to at least the 34,000 level over the coming weeks. I am still flat and I will now raise my buy level to 31650/31950 with a 31395 wider stop. Sentiment is still on the floor as shown by the Fear & Greed Index which improved slightly on Friday, closing at 12 which is ‘’Extreme Fear’’

Cash NASDAQ 100

Thankfully, the NDX rose 450 points on Friday. 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. The NDX has support from 11900/12100 and I will add to my existing position on any drop to this level with a 11795 stop. If I am taken long I will have a T/P level at 12290.

June BUND

The Bund gave back over 130 points on Friday and I am still flat. The Bund has short-term support from 152.30/153.10 where I will be a small buyer with a 151.65 tight stop.

Gold Rolling Contract

Gold traded lower to my second buy level at 1808 for a now 1815 average long position. Gold is oversold after fallen 10% from its recent high. I will leave my ‘’Closing Stop’’ at 1797 unchanged while lowering my T/P level to 1823.If any of the above levels are hit I will be back with a new update for my Platinum Members.

Silver Rolling Contract

No Change. I am still long at 20.80 with the same 21.40 T/P level and no stop for now.