U.S. Equity markets were higher earlier after House Speaker Kevin McCarthy said that he believes a deal on the federal debt limit may be agreed upon soon, even as early as this week. This is the most positive the Republican leader has been since negotiations started, and it gives hope that a potential debt default will be averted. However, this fell apart late Friday as the Republican Party walked away from negotiations. Equity Markets reversed, closing lower, led by the 0.33% fall in the Dow. Sales of previously owned homes in the U.S. fell to a three-month low in April. Low inventory continues to be a huge headwind for this market, with no feasible solution in sight. Despite the median selling price falling at the largest annual rate since 2012, home unaffordability continues to stay near record-high levels. Disney’s (DIS) ESPN, the leading sports-broadcasting network, announced it is preparing to sell its channel directly to consumers in the future via online streaming. The transition would be a major shake-up to its existing revenue model, which relies almost solely on the licensing of its service to bundled cable providers. This decision has been years in the making as traditional TV has lost market share to its streaming rivals. Federal Reserve officials have bombarded investors last week with numerous speaking arrangements. Dallas Fed President Lorie Logan joined several colleagues who have said a rate hike in June would not be off the table if economic conditions do not worsen. The central bank seems to be very much split about a potential rate hike in June and officials have not given investors any clarity last week either. European Markets closed higher. The European Central Bank is considering tighter measures on lenders as banking risk has emerged as a major topic of conversation for the central bank. A potential measure would require stronger liquidity reserves and stricter capital ratios to ensure a banking sector crisis akin to the one in the U.S. does not spread to Europe. In Asia, the economic battlefield between the West and China continues to accelerate. In a meeting with Japanese Prime Minister Fumio Kishida, several of the world’s largest chipmakers (including Taiwan Semiconductor Manufacturing, Samsung, Intel, and Micron) shared plans to massively expand into Japan. The initiative is part of a major push from the U.S. and its allies to move manufacturing of semiconductor chips outside of China as geopolitical tensions worsen in the region. Japan’s inflation re-accelerated in April following an easing from its January highs as consumer prices (excluding food) rose 3.4% from a year ago. If inflation continues to edge higher, the Bank of Japan could be forced into revising its long held easing policy and yield curve controls. Elsewhere, Oil fell 0.43% while Gold reversed some of Thursday’s sell-off, by rising 1% on Friday.

To mark my 2800th 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 lost 80 points on Friday and is now ahead by 2030 points for May. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and a record 9619 points last October.  Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 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 0.14% lower at a price of 4192.

The Dow Jones Industrial Average closed 109 points lower for a 0.33% loss at a price of 33,426.

The NASDAQ 100 closed 0.22% lower at a price of 13,803.

The Stoxx Europe 600 Index closed 0.66% higher.

Last Friday, the MSCI Asia Pacific closed 0.40% lower.

Last Friday, the Nikkei closed 0.77% higher at a price of 30,808.

Currencies 

The Bloomberg Dollar Spot Index closed 0.5% higher.

The Euro closed 0.3% higher at $1.0802.

The British Pound closed 0.3% higher at 1.2445.

The Japanese Yen rose 0.4% closing at $137.92.

Bonds

Germany’s 10-year yield closed 4 basis points higher at 2.46%.

Britain’s 10-year yield closed 3 basis points higher at 3.99%.

U.S.10 Year Treasury closed 4 basis points higher at 3.68%.

Commodities

West Texas Intermediate crude closed 0.43% lower at $71.55 a barrel.

Gold closed 1.0% higher at $1977.10 an ounce.

Today on the Economic Front the only data of note is Euro-Zone Construction Output at 10.00 am and Consumer Confidence at 3.00 pm. We have no U.S. Data due.

Cash S&P 500

What has really surprised me in May is the sheer recklessness with which the winning momentum stocks are being chased in this cycle. We have seen this nonsense before in recent years during times of heavy money printing but to see this behaviour now in an era of monetary tightening and higher interest rates is suggestive that animal spirits have not been brought to submission. The aggressiveness with which traders are chasing AI is breath-taking especially as we have fantasy and totally unproven futures growth projections. This recent vertical rally is aided by an options complex and if there is an environment to create squeezes then market participants will find a way to do it. Despite the gains in both the NDX and S&P this year, the broader NYSE is barely above the ground for the year-to-date. I maintain that anyone chasing these seven stocks in to an extremely overbought and dangerous condition is playing with fire. I am still flat the S&P. I will now lower my sell level to 4215/4230 with a lower 4241 ‘’Closing Stop’’. I still do not want to be long the S&P at this time.

EUR/USD

My Euro plan worked well as the market rose to my 1.0825 T/P level on my latest 1.0770 long position and I am now flat. The Euro has support from 1.0700/1.0770 where I will again be a buyer with the same 1.0635 ‘’Closing Stop’’.

June Dollar Index

My Dollar plan worked well as the Dollar sold off to my 102.90 on Thursday’s 103.50 short position and I am now flat. Today, I will again be a seller on any further rally to 103.60/104.20 with a higher 104.85 ‘’Closing Stop’’. I still do not want to be long the Dollar at this time.

Cash DAX

Apart from large Tech Stocks this is the one market that baffles me and my analysis. The DAX hit another new all-time high on Friday on negative divergence. The DAX is now higher for five consecutive months and 7 of the last 8 months despite awful economic data, with Germany close to a recession. European stocks are partying like 2021 while the Japanese Nikkei also hit a new 30-year high on Friday morning, continuing to fly above its Monthly Bollinger Band. I used the points gained in the Euro and Dollar to exit my 16075 short position at 16270. Been the stubborn person that I am I resold the DAX at the same 16270 price. I am still short, and I will add to this position at 16400 with a now higher 16505 ‘’Closing Stop’’. I will have a 16140 T/P level on this position and if any of the above levels are hit, I will be back with a new update for my Platinum Members.

Cash FTSE

The FTSE again traded in a narrow range on Friday, and I am still flat. I will now raise my buy level slightly to 7640/7710 with a higher 7585 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time.

Dow Rolling Contract

I am still flat the Dow. Please see Friday’s commentary as I will use any weakness in the Bank Index (KRE) to be a buyer for my Pension Fund. Today, I will continue to be a buyer on any dip lower to 32950/33200 with the same 32795 ‘’Closing Stop’’. I still do not want to be short the Dow at this time.

Cash NASDAQ 100

Although the NDX had a small fall on Friday, the 14-Day RSI closed at a still overbought 71 print. I am still short at an average rate of 13495. I will leave my 13850 ‘’Closing Stop’’ unchanged. I will now raise my exit level on this trade to a small loss at 13600. If any of the above levels are hit I will be back with a new update for my Platinum Members.

June BUND

Frustrating! The Bund hit a low at 133.51 missing my buy level by one point before rallying 75 points of this low and I am still flat. Today, I will raise my buy level to 132.95/133.65 with a higher 132.35 ‘’Closing Stop’’.

Gold Rolling Contract

Gold rallied back to an afternoon high at 1982 before having a small sell-off into the New York close. I am still flat having been stopped out of my latest long position last Thursday. Gold has support from 1945/1960 where I will be an aggressive buyer with a 1933 ‘’Closing Stop’’.

Silver Rolling Contract

No Change. I am still long at 23.40 with the same no stop. I will continue to look to add to this position on any further dip lower to 22.70. I will leave my 24.20 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.