U.S. stocks ended the longest winning streak in 18 months yesterday amid renewed concerns about slowing global growth and an escalation of trade tensions. Treasuries advanced. The S&P 500 fell for the first time in nine sessions as the Trump administration threatened tariffs on the European Union and the International Monetary Fund cut its global growth outlook to the lowest since the financial crisis. Multinationals bore the brunt of the selling, with Caterpillar and Boeing dragging the Dow Jones Industrial Average lower. Airlines tumbled along with materials and energy producers. Ten-year Treasury yields fell below 2.50 percent, while the greenback was mixed against major currencies. The Pound dropped as the EU looked set to force the U.K to delay Brexit for as long as a year. Investors remain on edge as the IMF’s latest report on global growth helped renew fears about a slowing world economy just as the U.S. and the EU appeared to open another front in their trade war, all while negotiations with China remain unsettled. Federal Reserve minutes, American Inflation data and a European Central Bank decision later today could add to anxieties or help provide calm.
To mark my 1800th 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 110 points yesterday and is now ahead by 290 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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Britain’s exit from the European Union looks set to be delayed by as long as a year in a blow for Theresa May that risks a destabilizing backlash at home. European Council President Donald Tusk rejected May’s request for a brief postponement to the U.K.’s membership, saying it would create a “rolling series of short extensions and emergency summits, creating new cliff-edge dates.”
Leaders will finalize the length of the delay to Brexit at a summit this afternoon. Tusk wants them to agree to an extension of up to a year, and diplomats from Member States see December 2019 or next March as the likely new departure date. Draft conclusions show EU leaders are planning to offer Britain an early exit clause in case a solution to the domestic deadlock turns up.
After months of uncertainty and knife-edge votes in the British Parliament, the prospect of a lengthy extension is good news for business, which wanted to avoid a cliff-edge departure at all costs. But the long delay is another political defeat for May, who had promised repeatedly to take the U.K. out of the EU by March 29. Sterling fell on this news with Cable now trading at 1.3060 this morning. My own view is that Sterling continues to be a buy on dips as yet again any sign of uncertainty sees the ‘’ can kicked down the road’’. Eventually we will have another referendum on Brexit.
The Euro again traded in a narrow range closing at 1.1263 in New York and where it opens in Europe this morning. The Bloomberg Dollar Spot Index was little changed, while the Japanese yen increased 0.3 percent to 111.12 per dollar.
The yield on 10-year Treasuries sank two basis points to 2.49 percent while in Europe both Germany’s 10-year yield declined two basis points and Britain’s 10-Year Yield also fell two basis points to -0.01 percent and 1.099 percent respectively.
After making new highs for the year West Texas Oil finally saw some profit taking, falling 0.5% to $64.05 a barrel. The Bloomberg Commodity Index fell 0.2 percent. Meanwhile. Gold gained 0.5 percent to $1,308.10 an ounce and Silver fell 20 cents to close at $15.20 in New York.
This morning on the Economic Front we have UK GDP, Trade Balance, Industrial/Manufacturing Production and the Index of Services at 9.30 am. This is followed at 12.45 pm by the ECB Meeting and Interest Rate decision and at 1.30 pm by the Dragi Press Conference. The US will release its latest CPI at 1.30 pm. At 5.00 pm we have the EU Council Summit on Brexit. Finally at 7.00 pm we have the latest FOMC Minutes from last month’s meeting.
June S&P 500
My S&P plan worked well with the market trading lower to my 2880 buy level before rallying 10 Handles. As I was already long the Dow I covered this S&P position at my revised 2884 T/P level and I am now flat. The S&P has strong support from 2864/2872 and today I will be a buyer on any dip to this area with a 2857 tight stop. If the S&P builds value below 2870 I will look to set up a short position as this will be the first signal for a down move to 2844 and possibly as low as 2790 before the next move higher. I will now lower my sell level to 2899/2909 with a 2916 stop. Again if I am taken short and subsequently stopped out of this position I will be a more aggressive seller on any further rally to 2930/2940 with a 2949 stop.
I am still flat the Euro as we wait for the ECB and Dragi press conference this afternoon. Ahead of this meeting I will now lower my Euro buy level to 1.1170/1.1210 with a 11135 stop. Remember a break and close below 1.1175 is bearish.
June Dollar Index
The boring sideways price action in the Dollar continues and I am still flat. Today I will raise my sell level to 97.10/97.50 with a higher 97.85 stop.
There is no doubt that the mood in the DAX has changed over the past 48 hours as the market looks to set to test the key 11750/11810 support level. I am still flat and today I will lower my buy range to this area with a 11695 stop. I still do not want to be short the DAX at this time.
My FTSE plan worked well with the market trading higher to my 7405 sell level with a 7415 high print before falling 60 points. I used this sell-off to cover my short position at my revised 7390 T/P level and I am now flat. Today I will again look to sell the market on any rally higher to 7398/7448 with a 7475 stop.
Dow Rolling Contract
Incredibly the Dow fell over 220 points in a straight line as soon as the US Markets opened. I bought the Dow at a price of 26125 before covering this position at my revised 26180 T/P level as emailed earlier to my platinum Members and I am now flat. The Dow has strong support from 25920/26070 and today I will be a buyer on any dip to this area with a 25830 stop. Given how close we are to short-term support I do not want to be a seller of the Dow at this time.
The NASDAQ again just missed my sell level before having a small sell-off and I am still flat. The NASDAQ continues to be the strongest of the US Indices helped by the renewed strength in Apple Shares which traded over $200 yesterday. Given how overbought this market is trading I will now lower my sell level to 7630/7680 with a 7425 stop.
No Change as I am still a seller on a y rally higher to 166.05/166.45 with the same 166.75 stop.
Gold Rolling Contract
I am still flat Gold and today I will continue to be a small seller on any further rally to 1317/1327 with a 1334 tight stop.
Silver Rolling Contract
No Change as I am still a buyer on any dip lower to 14.80/15.10 with the same 15.25 T/P level. If I am taken long I will have a tight stop at 14.60.