U.S. Equity Markets finished the day higher, as the first time in a long time we saw a Gap followed by a ramp with the NASDAQ 100 leading the gains, closing higher by 2.49%. Federal Reserve Board member Christopher Waller said the central bank remains focused on reducing inflation. To accomplish this, he believes that the Federal Open Market Committee should implement yet another 0.75% rate hike at the July meeting. This would bring the Federal-Funds target range to around 2.25% to 2.50%, which is in line with policymakers’ long-term interest-rate forecast of 2.50% or neutral. In turn, it could afford the Fed the opportunity to back down on the pace of aggressive rate hikes in the instance that there is a deceleration in economic activity. And if these actions can help boost the Dollar, ease cost pressures, and stabilise household balance sheets, it could bring spending back to more sustainable levels. Within the S&P 500, all 11 sectors finished higher. European Markets closed higher. European Central Bank (“ECB”) President Christine Lagarde said the bank will “nip in the bud” any widening in spreads between the sovereign bond yields of weak and strong regional economies. The governments in Germany, Austria, Italy, and Holland all said they are prepared to burn more coal for energy consumption, as they seek to replace lost Russian gas supplies. Russia threatened to take steps to protect its “national interests” after NATO member Lithuania banned the land transit of some goods to Kaliningrad. ECB Chief Economist Philip Lane said the bank’s policy-tightening measures could slow if the region’s economy slows more than anticipated. In Asia, The People’s Bank of China will continue urging the nation’s banks to lower borrowing costs and support economic growth. According to state-run financial newspapers. Bank of Japan Governor Haruhiko Kuroda said foreign currency moves should reflect economic and financial fundamentals, suggesting the government will support the Yen if it continues to weaken. The Bank of Korea’s preliminary trade data for June hit a record low due to rising import costs, implying it may need more rate hikes. The Reserve Bank of Australia said it would not use yield-targeting asset-purchase programmes in the future due to excess volatility, but instead will rely on fixed-amount bond purchases. Elsewhere, Oil rose 0.93% on continued energy volatility, while Gold fell 0.30% as the Dollar remained firm.
To mark my 2575th issue of TraderNoble Daiy 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 30 points yesterday and is now ahead by 3176 points for June after making 3651 points in May, having made 762 points in April, following a gain of 5883 points in March. The Platinum Service made an impressive 5324 points in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Equities
The S&P 500 closed 2.45% higher at a price of 3764.
The Dow Jones Industrial Average closed 641 points higher for a 2.15% gain at a price of 30,530.
The NASDAQ 100 closed 2.49% higher at a price of 11,546.
The Stoxx Europe 600 Index closed 0.4% higher.
This morning, the MSCI Asia Pacific Index fell 0.7%.
This morning, the Nikkei closed 0.19% lower at a price of 26,195
Currencies
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.2% higher at $1.0512.
The British Pound closed 0.1% higher at 1.2260.
The Japanese Yen fell 0.8% closing at $136.10.
Bonds
Germany’s 10-year yield closed two basis points higher at 1.77%.
Britain’s 10-year yield closed five basis points higher at 2.65%.
US 10 Year Treasury closed two basis points higher at 3.25%.
Commodities
West Texas Intermediate crude closed 0.93% higher at $109.57 a barrel.
Gold closed 0.30% lower at $1832.10 an ounce.
This morning on the Economic Front we already had the release of May U.K. CPI which rose 9.1% as expected. At 12.00 pm we have U.S. MBA Mortgage Applications, and this is followed by Fed Chair Powell’s Testimony to Congress at 2.30 pm. Finally, we have Euro-Zone Consumer Confidence at 3.00 pm.
Cash S&P 500
Yesterday was the first session in many weeks that we saw a Gap opening which saw follow through for the whole day as the S&P closed near the high of the day. However, overnight the S&P Futures are down 1.25% as the markets are nervous ahead of Powell’s Testimony to Congress this afternoon. Many investors are looking for a crash, perhaps not realising that one has already taken place. Yes, the S&P down 24% from all-time highs may not qualify as a crash in the traditional sense but take energy out of the equation and you are looking at something much worse. While the Russell and NDX are down over 30% from their highs many individual stocks are down 40, 50, 60, 70 and 80 percent from their highs. Netflix is down over 70% while Facebook is off over 50%. It is not just the small caps that have crashed but many of the larger key stocks as well. Although the S&P closed over 2% higher yesterday, it needs to break and close over the May low of 3810 for the Bulls to regain some control. I am not blind to a crash that lasts many years but nothing goes down in a straight line and after falling an unprecedented 10 of the last 11 weeks a major rally is due to correct these oversold readings. Today, I will leave my 3660/3690 buy level unchanged with the same 3639 wider ‘’Closing Stop’’. Meanwhile I am still long from last Friday week at 3985 and given the points made last week, I will now lower my exit level on this position to 3905.
EUR/USD
After hitting a high at 1.0565 yesterday morning, the Euro sold off overnight to my 1.0480 buy level. I will add to this trade at 1.0420 with the same 1.0375 stop. I will now lower my T/P level to 1.0520 and if any of the above levels are hit I will be back with anew update for my Platinum Members.
March Dollar Index
No Change. I am still a seller from 104.75/105.25 with the same 105.75 stop.
Cash DAX
The DAX traded heavy for most of yesterday’s session before selling off 200 points this morning. I am still flat and I will now lower my buy level to 12860/12940 with a lower 12785 stop.
Cash FTSE
The FTSE has reversed all of yesterday’s gains, hitting my 7050 buy level this morning. I am still long with a now lower 7095 T/P level. I will add to this trade at 6990 while leaving my 6955 stop unchanged.
Dow Rolling Contract
The Dow hit a high above 30650 late yesterday before selling off over 500 points to a low so far at 30145. I am still flat. Ahead of Powell’s Testimony, I will now lower my buy level to 29650/29950 with a lower 29495 ‘’Closing Stop’’. The McClellan Oscillator improved further, closing last night at -58, well above Friday’s -166 print. Despite yesterday’s across the board 2% rally the Fear and Greed Index is still showing a reading of ‘’Extreme Fear’’ with a 20 print.
Cash NASDAQ 100
No Change. Sentiment towards Technology stocks is at the lowest level in many years. This negatively should help to see a meaningful rally commence sooner rather than later and is why I have been so stubborn in holding my existing long NDX and S&P positions are that are currently offside. Thankfully we have made some nice points over the last eight weeks to offset these potential loses. I am still seeing pockets of positive divergence on the NDX which is no surprise after a market has fallen over 36% this year. I will leave my 11000/11250 buy level unchanged with the same 10795 stop. If I am taken long I will have a T/P level at 11580. Meanwhile I will leave my 14327 long position unchanged with a now lower 12900 exit level
September BUND
The Bund hit a low at 143.05 – just above my 142.60 buy level – before surging this morning to sit at 144.30 as I go to press. I will now raise my buy level to 142.50/143.20 with a higher 141.85 ‘’Closing Stop’’.
Gold Rolling Contract
Gold is selling off as I go to press, hitting an overnight low so far at 1824. I will now lower my buy level to 1798/1812 with a tight 1789 ‘’Closing Stop’’.
Silver Rolling Contract
Thankfully, Silver rallied yesterday to my 21.90 T/P level on my 21.60 latest long position, as this morning we are trading lower at 21.30. Silver has strong support from 20.30/21.00 where I will be an aggressive buyer with a 19.45 stop.
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