U.S. Equity Markets advanced for a third day on rising optimism the pandemic’s damage to the economy has peaked. Treasuries rose and Oil slipped. The S&P 500 climbed to an 11-week high, holding above 3,000 points and its average price for the past 200 days, technical levels considered key by chart watchers. For a second day, stocks most punished by the effects of the economy shutting, from Carnival Corp. to United Airlines, performed best as investors anticipate a sharp uptick in spending on non-essential goods and services. Stay-at-home beneficiaries from Peloton Interactive to Zoom Video Communications fell. The Nasdaq indexes turned positive late in the session after Micron Technologies forecast earnings that were ahead of estimates, lifting chipmakers. The Russell 200 jumped more than 3%, and the Dow Jones Industrial Average surged 2.2%, led by American Express and Goldman Sachs. Rising tensions with China continued occupy part of investors’s minds. Secretary of State Mike Pompeo said the U.S. has certified that Hong Kong is no longer politically autonomous from China, a move that could have far-reaching consequences on its special trading status. On Tuesday, reports indicated the U.S. was considering sanctions over Beijing’s crackdown in the former British colony. Futures on the Hang Seng Index fell. The Stoxx Europe 600 Index ended higher and Italy’s Government Bonds rose after details emerged of Europe’s package of grants and loans for up to 750 billion euros ($823 billion) to overcome the region’s deepest recession in living memory. The Euro gained. Investors are closely watching the new U.S.-China friction — including possible sanctions over Beijing’s crackdown in Hong Kong — as global stocks trade near levels not seen since early March on hopes that economies are beginning to recuperate after a deep downturn. This morning, Euro Stoxx 50 Futures climbed more than 1% and S&P 500 contracts were also higher. The Hang Seng Index flirted with the lowest level since global strains peaked in March, and the offshore Yuan dipped after the U.S. said it could no longer certify Hong Kong’s political autonomy, a move that could have far-reaching consequences. South Korea’s Won slid after the central bank cut interest rates and said it would be active in bond purchases if needed. Tokyo shares extended recent gains.

To mark my 2075th 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 made 297 points yesterday and is now ahead by 2134 points for May, having made 4773 points in April, an incredible 9264 points in March, 2223 points in February, 2142 points in January, 818 points in December, 780 points in November, 1649 points in October, 1620 points in September and 2387 points in August Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points

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Equities

The S&P 500 Index rose 1.5%, closing at a price of 3036.

The NASDAQ 100 climbed 0.6% and the Russell 2000 added 3.1%.

The Dow Jones Industrial Average rose 2.2% for a 550 point gain to close at 25,558.

The Stoxx Europe 600 Index advanced 0.2%.

This morning the NIKKEI closed 2.32% higher at 21,916.

The MSCI Asia Pacific Index was little changed.

Currencies

The Bloomberg Dollar Spot Index increased 0.2%.

The Euro increased 0.2% to $1.0998.

The Japanese Yen weakened 0.2% to 107.77 per dollar.

The British Pound declined 0.6% to $1.226.

Bonds

The yield on 10-year Treasuries fell three basis points to 0.67%.

Germany’s 10-year yield rose one basis points to -0.42%.

Britain’s 10-year yield decreased two basis points to 0.19%.

Commodities

West Texas Intermediate crude dipped 5.7% to $32.40 a barrel.

Gold weakened 1% to $1,711.20 an ounce.

This morning on the Economic Front, Germany’s IFO Institute said that the Economy will probably shrink by 6.6% this year. At 10.00 am we have Euro-Zone Consumer Confidence, Economic Sentiment Index and Business Climate. This is followed at 1.00 pm by German CPI and at 1.30 pm by the latest U.S Weekly Jobless Claims, where the expectation is for a further increase of 2.1 million lost jobs. At the same time we have U.S GDP, Durable Goods Orders and PCE. Next, we have Pending Home Sales at 3.00 pm. Finally, at 4.00 pm we have the Kansas City Manufacturing Index and a speech from Fed Member Williams.

June S&P 500

An incredible trading session with the S&P falling nearly 70 Handles off its 3034 morning high to hit an afternoon low of 2965.50 (just missing my 2963 buy level) before surging in the last hour of trading to close near the high of the day at 3032. The madness of these markets is emphasised by what is going on in the Russel Index in relation to Zombie Companies. A ‘’Zombie Company’’ is one that pays more in interest on its debt than it earns from its business. Zombie Companies must borrow money just to service their debt. According to Ned Davis Research, 36% of companies in the Russel 2000 Index which is an Index of small-cap American Companies, were unprofitable before the pandemic. But this has not stopped investors chasing zombie stocks higher. Now that the Fed is purchasing Junk Bond ETFs, investors seem perfectly content that these zombies will have no problem rolling over their debt. Don’t fight the Fed has never been more true. Profits do not matter when you have the ‘’Powell Put’’. In fact, zombie stocks are actually outperforming the overall Index this year. Yesterday the Russel Index was the top performer with a gain of 3.1%. The S&P is now severely overbought as shown by the McClellan Oscillator closing at +241 last night. Yesterday my idea of the S&P not leaving two unclosed Gap’s unfilled worked perfectly. After the S&P hit my 3031 sell level I covered this short position too early at my revised 3021 T/P level as I was already short both the Dow and DAX. I emailed my Platinum Members to go short the S&P again which I have now done at a price of 3040. I will add to this trade at 3058. I will have a T/P level on this position at 3025 while my stop for now will be at a wide 3069. The 200 Day MA comes in at 3000 and should act as initial support. As a result, I will now raise my buy level to 2995/3005 with a 2983 stop. If I am taken long I will have a T/P level at 3015.

EUR/USD

My Euro plan worked well with the Euro rallying to my 1.1020 sell level before spiking lower to my 1.0980 T/P level and I am still flat. The Euro has strong support from 1.0915/1.0965 where I will be a buyer with a 1.0875 stop. The Euro has resistance from 1.1090/1.1130 where I will be a small seller with a 1.1175 stop.

June Dollar Index

Frustratingly the Dollar just missed my 98.70 buy level with a 98.72 low print before rallying to trade higher at 99.00 this morning. Today I will lower my buy level to 98.00/98.50 with a 97.55 lower stop.

June DAX

My DAX plan worked well with the market trading higher to my 10710 sell level before selling off t0 my revised 11655 T/P level and I am now flat. The DAX has traded heavy over the past two days which is no surprise given its near 50% rally off the March lows. The DAX has resistance from 11900/12050 where I will again be a seller with a higher 12125 stop.

June FTSE

Overnight the FTSE re-opened near the top of my sell range at 6215. I am still short and I will now raise my T/P level on this position to 6170. I will also lower my stop on this position to 6235 and if any of the above levels are hit I will be back with a new update for my Platinum Members.

Dow Rolling Contract

The Dow has now rallied over 3000 points since its 22789 low print exactly two weeks ago. We saw huge two-way volatility yesterday with the Dow selling off 500 points shortly after the US Markets opened (low of 25000) before regaining those lost points and more to hit a high so far this morning at 25839. The Dow has three outstanding ‘’Gaps’’ from March, 27090 on March 4, 26121 on March 5 and 25864 from March 6. On top of this we have the 200 Day Moving Average which comes in at 26301 this morning. Yesterday my Dow plan worked well with the market hitting my 25425 sell level before trading lower to my revised 24310 T/P level and I am now flat. The Dow is severely overbought with strong resistance from 25925/26225 where I will be a strong seller with a wider 26450 stop.

June NASDAQ

Incredibly the NASDAQ traded lower to my 9180 buy level before rallying to hit an overnight high so far at 9480. Unfortunately given the underperformance of the NASDAQ this week I covered this position way too early at 9212 and I am still flat. Hopefully you did better with your exit price. It is no surprise that the NASDAQ is struggling as we are within 300 points of the Feb high. Today I will lower my sell level to 9520/9650 with a 9725 tight stop. I will continue to be a buyer from 9080/9180 with a 8995 same stop.

June BUND

Shortly after I posted I was stopped out of my 172.40 long position at 171.95 and I am still flat. I am going to stay flat the Bund as I do not have an edge in this market at this time.

Gold Rolling Contract

Gold just missed my 1688 buy level with a 1693 low print and I am still flat. Today I will raise my buy level to 1688/1698 with a higher 1679 stop.

Silver Rolling Contract

Silver’s low yesterday was 16.75, just above my 16.70 initial buy level which is frustratingly with Silver trading higher at 17.30 this morning. I will now raise my buy level to 16.50/16.90 with a higher 16.15 stop.