U.S. equities sank Monday as the fallout from the White House’s moves against Chinese telecom giant Huawei battered technology shares and stoked trade jitters. The US Dollar slipped. The S&P 500 Index dropped for the second straight session, with semiconductor stocks among the biggest laggards, and the tech-heavy Nasdaq 100 Index saw its biggest decline in a week. Ten-year Treasury yields rose before a slew of U.S. data this week as well as Federal Reserve policy-meeting minutes tomorrow. Markets remain on edge as the trade war develops, with the impact of President Donald Trump’s threats to choke Huawei Technologies Co. reverberating across the global supply chain yesterday and hitting some of the biggest component-makers. Trump said in an interview he was “very happy” with the trade war and that China wouldn’t become the world’s top superpower under his watch.
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 185 points yesterday and is now ahead by 1541 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 fell 0.7% while the Nasdaq 100 dropped a hefty 1.7%. Software and semiconductor shares helped pull the Stoxx Europe 600 index lower. This led to the Stoxx Index falling 1.1%, its biggest drop in a week. The U.K.’s FTSE 100 Index sank 0.5%. Meanwhile the MSCI Emerging Market Index declined 0.2% to the lowest level in over four months.
The Bloomberg Dollar Spot Index sank 0.1%, the biggest drop in over a week. The Euro edged higher following five days of declines as elections for the European Parliament approached, closing 0.1% higher at $1.1166. The British Pound rose less than 0.05% to $1.2726.
The yield on 10-year Treasuries rose two basis points to 2.41%. In Europe, Germany’s 10-year yield gained two basis points to -0.09%, the largest advance in three weeks, and the UK Gilt climbed two basis points to close at 1.055%.
Gold rose less than 0.05% to $1,278.15 an ounce. Crude fluctuated after Saudi Arabia and other key producers in OPEC signalled their intention to keep oil supplies constrained for the rest of the year, while pledging to prevent any genuine shortages. This helped West Texas Intermediate crude to rise 0.6% to $63.14 a barrel, the highest in almost three weeks.
This morning on the Economic Front we have the UK CBI Industrial Trends Survey at 11.00 am. This is followed at 3.00 pm by US Existing Homes Sales and Euro-Zone Consumer Confidence. The Fed’s Evans and Rosengren are speaking this afternoon at 3.45 pm and 5.00 pm respectively. Finally, the Bank of England Governor Mark Carney testifies to Parliament about the May inflation report.
June S&P 500
We saw plenty of two-way trading over the past 24 hours as yet again traders bought the dip in the S&P as soon as the US Cash Markets opened. After the market traded the whole of my buy range for an average long position at 2847 the S&P subsequently rallied back to a rebound high of 2857 and I used this rally to exit this long position at my revised 2849 T/P level. I then emailed my Platinum Members to re-buy the market again at 2834 before exiting this position too early at 2838.50, just before the Chicago close as I wanted to be flat overnight. This rally has continued with the market now trading at 2853 as I go to press. The S&P has strong resistance from 2885/2895 and I will continue to be a seller on any rally to this area with a 2903 stop. As long as the S&P can hold the key 2800/2820 support area then I will continue to be a buyer on dips. Today I will again look to buy the S&P from 2820/2834 with a 2812 stop. If I am taken long and subsequently stopped out of this position I will be a more aggressive buyer from 2788/2803 with a 2879 stop.
I am still flat the Euro and today I will continue to be a buyer on any dip lower to 1.1080/1.1120 with the same 1.1045 stop. I am not going to chase the Euro lower and I will leave my 1.1190/1.1230 sell level unchanged with the same 1.1265 stop.
June Dollar Index
No Change and today I will leave my 98.15/98.55 sell level unchanged with a 98.80 tight stop.
As the S&P had traded the whole of my buy range I waited to buy the DAX which I did at a price of 12065. I emailed my Platinum Members to lower their T/P level to 12095 which was filled after the opening of the European Markets this morning. Today I will again look to buy the DAX on any dip lower to 11950/12020 with a 11895 stop. Even though the DAX had a weak trading session yesterday I am reluctant to chase this market lower.
Frustratingly the FTSE just missed my 7370 sell level before falling over 100 points and I am still flat. Today I will lower my sell level to 7355/7395 with a 7430 stop. I still do not want to be long the FTSE at this time, especially as I expect Sterling to rally and this will put pressure on UK Equities.
Dow Rolling Contract
My Dow plan worked well with the market trading lower to my 25590 buy level before rallying to my revised 25680 T/P level and I am now flat. This morning the Dow is trading higher at 25785 as I go to press as yet again the 200 Day Moving Average has held. Interestingly despite the sell-off in the US Indices that the VIX held steady to close at 16.31 which is well below the key 20 level. Remember a break and close over 20 will have major bearish implications for the US Stock market. Today I will again look to buy the Dow on any dip lower to 25470/25620 with the same 25350 wider stop. My only interest in selling the Dow is still on a rally higher to 26000/26150 with a 26240 stop.
Thankfully we had no buy levels in the NASDAQ as the market fell nearly 200 points from where I marked prices 24 hours ago. The NASDAQ has strong support from 7300/7350 and I will be a buyer on any dip to this area with a 7245 stop.
The Bund had its biggest sell-off in three weeks yesterday and I am still flat. Today I will lower my sell level to 167.05/167.35 with a 167.65 stop.
Gold Rolling Contract
I am still flat Gold and my only interest in buying this market is still on a further dip lower to 1248/1258 with the same 1241 stop.
Silver Rolling Contract
No Change as I am still long and wrong at 14.80 with the same 14.25 stop and lower 14.70 exit level. If any of the above prices are hit I will be back with a new update for my Platinum Members. One worry in being long is that fact that the Daily Sentiment Index has not hit single digits, closing last night at 24% bulls.