U.S. Equity Markets got slammed yesterday, led by the 3.09% decline in the NASDAQ 100, wiping out Monday’s gains. U.S. stocks lost momentum after the Conference Board released data that showed Consumer Confidence cooled this month for the second time in a row. This has exacerbated present concerns. Meanwhile, surging inflation expectations may push the U.S. Federal Reserve to rein in rising prices more aggressively. Home-price growth data from the S&P CoreLogic Case-Shiller National Home Price Index showed average home prices in major metropolitan areas increased at a slower pace in April versus March, also. Home-price inflation may be moderating as many prospective buyers hold off on purchasing a home in the wake of elevated prices and mortgage rates. And if prices were to move even lower, it could signal a deceleration in economic activity. Within the S&P 500, 10 of the 11 sectors finished lower. European Markets closed higher. European Central Bank President Christine Lagarde said it will raise interest rates in July and September while reiterating the intention to bring inflation back under control. Growth from Knowledge’s German Consumer Confidence figures for June weakened compared to May as income and business expectations deteriorated. The French National Statistics Office’s Consumer Confidence Index for May showed individuals are increasingly worried about savings and employment. European Central Bank Governing Council member Joachim Nagel said its monetary policy must become restrictive to fight inflation. In Asia, People’s Bank of China Governor Yi Gang said its primary goal is to promote stable prices to continue its support toward economic recovery. The Bank of Japan’s domestic sovereign bond holdings hit a new record as it tries to keep yields low, exceeding 50% of the outstanding amount. Chinese National Development and Reform Commission Vice Secretary-General Ou Hong said Beijing is confident in its ability to overcome economic difficulties. South Korean retail and department-store sales figures for May held steady with April, signalling economic activity isn’t falling, despite inflation. Elsewhere, Oil rose 2.27% on continued energy volatility, while Gold fell 0.15% on Dollar strength.
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For anyone following my Platinum Service it lost 395 points yesterday and is now ahead by 2736 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
The S&P 500 closed 2.01% lower at a price of 3821.
The Dow Jones Industrial Average closed 491 points lower for a 1.56% loss at a price of 30,946.
The NASDAQ 100 closed 3.09% lower at a price of 11,637.
The Stoxx Europe 600 Index closed 0.8% higher.
This morning, the MSCI Asia Pacific Index fell 0.5%.
This morning, the Nikkei closed 0.97% lower at a price of 26,785
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.5% lower at $1.0521.
The British Pound closed 0.4% lower at 1.2205.
The Japanese Yen fell 0.5% closing at $135.93.
Germany’s 10-year yield closed eight basis points higher at 1.62%.
Britain’s 10-year yield closed eight basis points higher at 2.47%.
US 10 Year Treasury closed four basis points lower at 3.13%.
West Texas Intermediate crude closed 2.27% higher at $111.95 a barrel.
Gold closed 0.15% lower at $1819.10 an ounce.
This morning on the Economic Front we have Euro-Zone Money Supply at 9.00 am, followed by U.K. CPI at 10.00 am. At the same time, we have Euro-Zone Consumer Confidence and the Economic Sentiment Indicator. Next, we have a speech from Fred Member Mester at 11.45 am and the MBA Mortgage Applications at 12.00 pm. This is followed by German CPI at 1.00 pm and U.S. GDP at 1.30 pm. Finally, we have a speech from Fed Chair Powell and 2.00 pm and ECB President Lagarde at 4.00 pm.
Cash S&P 500
The gap which the Fed are trying to sell the economy being strong and has great momentum and what the official data is showing is getting wider. Weak Consumer Confidence saw the S&P fall from a pre-release high at 3945 to a low of 3817 was fast and furious with little or no rallies as traders hit the exit door. It is too early to say whether yesterday means the recent Bear Market rally is over or just a back test to fill some ‘’Open Gaps’’. The S&P really needs to hold the May lows at 3810 or we will quickly see the S&P trade into the low 3700s. We are still in a seasonally strong period making yesterday’s aggressive sell-off strange, while of course we have Fed Chair Powell speaking this afternoon at 2.00 pm. The S&P only missed my sell level by 5 Handles before trading the whole of my buy range for a 3886 average long position before stopping me out of this trade at 3850 and I am now flat. The S&P has strong support from 3780/3798 where I will again be a buyer with a tight 3765 stop. Given the fact that month end is tomorrow and the 4th of July Holiday on Monday, I do not want to be short the S&P at this time. If I am taken long I will have a T/P level at 3825.
The Euro sold off to my 1.0540 buy level yesterday. This morning the Euro hit my second buy level at 1.0490 for a now 1.0515 average long position. I will now lower my T/P level to 1.0540 while leaving my 1.0445 stop unchanged. If any of the above levels are hit I will be back with a new update for my Platinum Members.
March Dollar Index
Yesterday’s 0.5% rally in the Dollar saw my 104.20 sell level triggered. I will add to this position at 104.70 while leaving my 105.05 tight stop unchanged. I will now raise my T/P level to 103.90.
This morning, the DAX finally traded lower to my 13080 buy level before bouncing and I have now exited long position here at 13130 and I am now flat. The DAX has support from 12930/13010 where I will again be a buyer with a lower 12885 stop. I still do not want to be short the DAX at this time.
The FTSE just missed my 7370 initial sell level before selling off to sit at 7260 this morning. Today, I will continue to be a buyer on any dip lower to 7150/7210 with the same 7115 tight stop.
Dow Rolling Contract
According to Hart Funds research there have been just 22 Bear Markets since 1928 and only 15 recessions in that time. The recent Bear Market has now fully discounted another recession and the big question is how much of this information is priced into the market. Despite yesterday’s aggressive sell-off the McClellan Oscillator is still positive at +51. I would have expected the MO to have closed with a negative reading last night, while the Fear and Greed Index only fell three points closing with a reading of ‘’Fear’’ with a 26 print. Yesterday’s move lower saw the whole of my buy range triggered for a now 31110 average long position. I will leave my 30795 ‘’Closing Stop’’ unchanged while lowering my T/P level to 31300.
Cash NASDAQ 100
My NDX plan did not work well. I bought the market at an average rate of 11925 before stopping myself out of this position at 11700. With Bond Yields opening lower this morning, the NDX is showing some positive divergence. Today, I will again be a buyer on any further dip lower to 11400/11550 with a 11295 stop. If I am taken long I will have a T/P level at 11775. Meanwhile, I am still long at 14327, as I look for a further rally to 12900 to exit this position that I have now owned since April.
News that the ECB is considering another Bond buying programme sees Bund yields opening 10 basis points lower this morning. This has worked well as the Bund hit my 145.20 buy level yesterday before opening above my T/P level at 146.60 and I am now flat. Today, I will again look to buy the Bund from 144.60/145.20 with the same 143.95 stop.
Gold Rolling Contract
The strong Dollar sees Gold opening lower this morning. As I am still long Silver, I will now lower my Gold buy level to 1788/1800 with a 1779 tight ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I am still long at 21.10 with the same 21.40 T/P level. I will add to this position at 20.40 while leaving my 19.95 stop unchanged. If any of the above levels are hit I will be back with a new update for my Platinum Members.