U.S. stocks rebounded yesterday as the trade-war driven back-and-forth that has dominated markets this month showed few signs of abating. Treasuries slipped while the US Dollar gained. The S&P 500 Index climbed after the U.S. decided to grant limited relief for consumers and carriers that do business with Huawei Technologies — a day after the White House’s moves against the Chinese telecom giant battered stocks. Semiconductors bounced back from yesterday’s 4% sell-off, logging their first gain in four sessions. Risk assets have been whipsawed in May as the world’s largest economies ratchet up both rhetoric and action on trade, with the latest phase focused on Huawei and its suppliers and customers. For all the turmoil, a gauge of global stocks remains within 5% of an all-time high, while the S&P 500 is about 3% from a record. Against that backdrop, investors will be closely watching U.S. data this week, as well as Federal Reserve policy-meeting minutes due this evening.
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 25 points yesterday and is now ahead by 1566 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 closed 0.9% higher with the NASDAQ recovering 1% of its 1.7% loss on Monday. In Europe, technology shares powered the Stoxx 600 Index higher with the market closing 0.5% higher.. Chinese equities had the strongest gains in the Asian session, while their Japanese peers ended lower. An advance for Samsung Electronics Co. helped bolster Korean shares, on bets it may benefit from Huawei’s need to shift away from American suppliers. The U.K.’s FTSE 100 Index increased 0.2%, while the MSCI Emerging Market Index advanced 0.5%, its biggest gain in five weeks.
The Bloomberg Dollar Spot Index increased 0.2% to its highest in five months, with the Euro falling less than 0.05% to $1.1161. Elsewhere, the Pound fluctuated after U.K. Prime Minister Theresa May said she’s prepared to offer parliament a vote on holding a second Brexit referendum. The British currency spiked higher on her remarks before giving up those gains as some key lawmakers responded with skepticism. Cable eventually closed 0.2% lower at $1.2700. Turkey’s lira stayed lower after the country’s central bank effectively lowered its main interest rate, undoing a limited tightening of policy.
Yesterday was another quiet session for the Bond Markets as the yield on 10-year Treasuries advanced one basis point to 2.43%, the highest in more than a week. In Europe, Germany’s 10-year yield gained two basis points to -0.06%, the highest in over a week while Britain’s 10-year yield advanced three basis points to 1.083%.
Commodities were weak across the board yesterday with West Texas Intermediate crude falling 0.2% to $62.99 a barrel, the biggest drop in over a week. Gold closed 0.2% lower at $1,274.75 an ounce having a year to date low of $1268.
This morning on the Economic Front we have ECB President Dragi speaking at 8.30 am. This is followed at 9.30 am by UK CPI, PPI and the Retail Price Index. At 10.30 am we have a speech by ECB Member Praet. Next we have the US MBA Mortgage Applications at 12.00 pm. Finally the Fed minutes of its FOMC April 30-May 1 policy meeting will be released at 7.00 pm.
June S&P 500
The S&P rose 0.9% yesterday as the market reversed most of Monday’s sell-off. None of my levels came close to being hit with this move higher and I am still flat. One notable snippet from yesterday was the fact that the VIX fell 8.34% to close below 15 at 14.95. Remember it was only last week that the VIX had spiked to a high of 23.80. As I mentioned yesterday as long as the VIX can stay below 20 then we should see the S&P move higher over the coming weeks. Today I will move my buy level higher to 2838/2848 with a 2829 stop. If I am taken long and subsequently stopped out of this position I will be an aggressive buyer from 2788/2803 with a 2879 stop. The S&P has strong resistance from 2887/2900 and I will be a seller on any rally to this area with a 2912 stop.
Frustratingly the Euro just missed my 1.1190 sell level with a 1.1188 high print before selling off to trade at 1.1150 this morning. With Dragi speaking at 8.30 am I will now raise my sell level slightly to 1.1200/1.1240 with a higher 1.1270 stop. I will also lower my buy level slightly to 1.1070/1.1110 with a 1.1035 stop.
June Dollar Index
No Change as I am still a small seller on any rally higher to 98.20/98.60 with a 98.90 stop.
Thankfully we had no sell level in the DAX with the market regaining 200 points of the 270 points lost on Monday. I am still flat and today I will now raise my buy level to 11980/12050 with a 11925 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 7355 sell level before trading lower to my 7330 T/P level and I am now flat. With Cable trading at 1.2675 I will now look to sell the FTSE from 7380/7420 with a 7445 stop. As I still expect Sterling to rally from oversold levels I do not want to be long the FTSE at this time.
Dow Rolling Contract
The 50 Day Moving Average for the Dow comes in at 26075 this morning. I am still flat the Dow and today I will lower my sell level slightly to 25970/26100 with a tight 26190 stop. Despite the Dow closing higher I am not going to move my buy level higher and today I will leave my 25470/25620 buy range unchanged with the same 25350 wider stop.
I am still flat the NASDAQ and today I will move my buy level higher to 7320/7370 with a higher 7280 stop. I still do not want to be short the market at this time.
The Bund traded to a high of 166.91 yesterday just shy of my 167.05 sell level and I am still flat. There is no doubt that the price action over the past week is bearish but with Dragi speaking at 8.30 am I will only lower my sell level slightly to 166.95/167.30 with a 167.60 stop.
Gold Rolling Contract
Gold made a new low for the year at 1268 before having a small rally to close at 1274. I am still flat and today I will leave my 1248/1258 buy level unchanged 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 a now lower exit level at 14.60. If any of the above levels are hit I will be back with a new update for my Platinum Members.