March Non-Farm Payrolls grew by 196K, 19K more than expected while the two prior months were revised higher by 14K. The private sector component though had less of an upside print as jobs here rose by 182K, 5K more than expected. Similar to what the ADP said on Thursday and in contrast to the latest ISM, Manufacturing shed 6K jobs instead of hiring a net 10K as forecasted. Meanwhile February was revised to a Manufacturing job gain of just 1K from 4K initially. Wages disappointed with a 0.1% month-on-month increase two tenths less than expected and which brings the year-on-year increase to 3.2% from 3.4%. That matches the slowest increase since last September. Bottom line, most of the modest upside surprise came from government hiring. Private sector hiring was a touch better than forecasted and wage growth is not accelerating.
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For anyone following my Platinum Service it made 43 points on Friday and is now ahead by 175 points for April, having made 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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U.S. Stocks ended Friday near the highs of the day with the S&P and Dow closing 0.15% higher while the NASDAQ led the charge with a gain of 0.60%. After the Cash Markets closed Boeing announced it was cutting the production of its 737 Max to 42 from 52 currently and as a result the Dow is trading 110 points lower from its 26424 close on Friday. The US markets were helped from comments from the Fed’s Bostic who said that the Labour Market is strong. Meanwhile the FTSE was the strongest of the European Indices, closing 0.61% higher at 7447 for a new closing high for 2019.
Currency Markets again traded in narrow ranges on Friday with the Euro having one of its smallest trading ranges of the year so far despite the fact that we had the release of Non-Farm Payrolls which is normally the catalyst for a volatile trading session. The Euro closed unchanged at 1.1225. After the close the CFTC Commitment of Traders Report was released. It showed that the EUR Short Position has reached 100K which is the largest short position since December 2016. Sterling was unchanged despite comments from PM May’s spokesman cited by the FT that the UK Government is prepared to pursue changes to the political declaration in order to deliver a deal that is acceptable to both sides. If the UK can agree a delay and subsequent deal then Cable will rally to at least 1.37.
Just like the Currency Markets above both the US 10-Year Treasury and German Bund closed unchanged at 2.49% and -0.008% respectively.
WTI Crude closed over $63 to make fresh highs since November, having retested its 200 Day Moving Average which held. Crude has overcome a surprisingly large US Inventory build last week to rise more than 5% in a bull market that has raged since the start of the year. Meanwhile the precious metals also traded in a narrow range with Silver unchanged and Gold closing a few dollars higher at $1293.
This morning on the Economic Front we already had the release of the German Trade Balance which printed 18.7bn Euro versus 17.0bn expected. At 9.30 am we have the Euro-Zone Sentix Investor Confidence and this is followed by Canadian Housing Starts at 1.15 pm. Finally at 3.00 pm we have US Factory Orders.
June S&P 500
The S&P closed at yet another new high for the year with the market just falling shy of my 2902 sell level with a 2899.50 high print overnight and I am still flat. The VIX also closed at a new low for 2019 at 12.85. The Large Speculators net-short position as a percentage of open interest in VIX Futures dropped to a new extreme last week. It is now at the lowest level in 10 years. We need to keep a close eye on the VIX which has now fallen from a high of over 36 on December 26, 2018. Today I will again raise my buy level for the S&P to 2868/2880 with a 2859 wider stop. Meanwhile I will also raise my sell level slightly to 2905/2915 with a 2923 stop.
With a near record short position in the EURO coupled with the fact that the Daily Sentiment Index is near single digits it is difficult to see how the Euro can trade much lower without having an intervening rally first. I am still flat the market and today I will leave my 1.1150/1.1190 buy level unchanged with the same 1.1115 stop.
June Dollar Index
No Change as I am still a seller on any rally higher to 97.20/97.60 with a 97.95 stop.
I am still flat the DAX which is opening weaker this morning despite a strong finish to last week. Today I will lower my buy level slightly to 11790/11860 with a 11730 lower stop. However despite the DAX opening lower I still do not want to be short the market at this time.
My FTSE plan worked well with the market trading higher to my 7395 sell level late on Friday evening before falling to an overnight low of 7362. As I did not want to stay short over the weekend I covered this position at my revised 7382 T/P level and I am now flat. Given how severely overbought the FTSE is trading I will continue to be a seller on rallies. Today my sell range is from 7405/7445 with a 7480 stop.
Dow Rolling Contract
The announcement by Boeing in cutting production to its 737 Max Aircraft is weighing on the Dow this morning. I am still flat and today I will continue to be a buyer on any dip lower to 26030/26180 with a 25955 stop. As I have a sell level in both the NASDAQ and S&P I do not want to be short the Dow at this time.
My NASDAQ plan worked well with the market trading higher to my 7620 sell level overnight before trading lower to my 7590 T/P level and I am now flat. Given how severely overbought the NASDAQ is trading after rallying over 17% so far this year I will continue to be a seller on rallies. Today my sell range will be from 7635/7685 with a 7715 tight stop.
No Change as I am still a seller on any rally higher to 166.05/166.45 with the same 166.75 stop.
Gold Rolling Contract
So far Gold is holding the $1280 area but I still do not trust this market. I am still flat and today I will again leave my 1267/1275 buy range unchanged with the same 1259 stop.
Silver Rolling Contract
I am still long Silver at 15.20 with the same 15.25 T/P level which just missed on Friday with a 15.22 high print. I will still look to add to this position on any dip lower to 14.80 with the same 14.60 tight stop. If any of the above levels are hit I will be back with a new update for my Platinum Members.