U.S. Equity Markets continued this week’s sell-off, finishing the day lower after an incredibly volatile trading session which saw the VIX trading 18% higher before closing with a 4% gain at 22.18. The Dow led the decline closing lower by 0.48%. Markets fell in the morning on fears of Federal Reserve tapering ahead of its minutes. When released in the afternoon, the Minutes showed that Fed members see the inflationary pressures as largely transitory. But some Fed presidents said that the discussion of asset tapering could come in the next few meetings if the economic recovery continues to accelerate. The Fed also said that inflation may run above 2% this year as we lap easy comparable periods and as the economy reopens. And a number of participants said that supply-chain issues could force inflation to remain elevated beyond this year. This is not what markets wanted to hear, sending stocks lower once again after the announcement. The steep sell-off in cryptocurrencies also weighed on equities. There are concerns of overexuberance in the markets, most of all in the cryptocurrency space. So, a shakeout here could spark fears that it would spill over into stocks. European Markets closed lower. The European Central Bank’s financial stability review said the coronavirus pandemic will leave countries with higher debt and weaker balance sheets, potentially creating a fragile recovery. Britain’s Consumer Price Index data for April were in line with expectations, rising versus March, as a jump in oil prices drove the gains. The Bank of England said it was on the lookout for prolonged signs of inflation, while also saying it believes any near-term increases will be temporary. In Asia, Markets in Hong Kong and South Korea were closed for holidays. China accused the U.S. of threatening regional political stability after an American guided-missile destroyer sailed through the Taiwan Strait. Bank of Japan Governor Haruhiko Kuroda said the central bank will continue will ‘powerful easing’ to support the economy, pushing back COVID-19-related programs if necessary. Plants in China’s steelmaking hub of Tangshan were told to reduce overnight production after Beijing said it was looking into ways to stabilize the steel and iron ore markets. Australia’s first-quarter wage-price index data were stronger than expected, remaining steady versus the fourth quarter, easing inflation worries. Elsewhere, Bitcoin ended the day lower by 9%, having fallen as much as 30% at one stage, while Oil fell 3.33% on a sharp increase in U.S. crude inventories.
To mark my 2325th 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 [email protected] for details
For anyone following my Platinum Service it made 151 points yesterday and is now ahead by 1210 points for May having closed April with a gain of 1244 points, having ended March with an impressive gain of 3769 points, having made 3286 points in February, 2077 points in January, 2273 points in December, 2025 points in November, 2779 points in October, 3042 points in September and 2383 points in August. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
The S&P 500 closed 0.29% lower at a price of 4115.
The Dow Jones Industrial Average closed 164 points lower for a 0.48% loss at a price of 33,896.
The NASDAQ 100 closed 0.15% higher at a price of 13,237.
The Stoxx Europe 600 Index closed 0.6% lower.
Yesterday, the MSCI Asia Pacific Index fell 0.7%.
Yesterday, the Nikkei closed 1.28% lower at a price of 28,044.
The Bloomberg Dollar Spot Index closed 0.3% higher
The Euro closed 0.4% lower at $1.2175.
The British Pound closed 0.6% lower at 1.4119.
The Japanese Yen fell 0.3%, closing at $109.22.
Germany’s 10-year yield closed one basis points lower at -0.11%.
Britain’s 10-year yield closed one basis points lower at 0.85%.
US 10 Year Treasury closed three basis points higher at 1.67%.
West Texas Intermediate crude closed 3.33% lower at $63.36 a barrel.
Gold closed 0.03% higher at $1,869.30 an ounce.
This morning on the Economic Front we have German PPI at 7.00 am, followed by Euro-Zone Current Account at 9.00 am and Construction Output at 10.00 am. At 1.00 pm we have a speech from ECB President Lagarde and this is followed by the U.S. Weekly Jobless Claims and the Philly Fed Manufacturing Survey at 1.30 pm.
June S&P 500
The S&P sold off to a low of 4056, just below it’s 50 Day Moving Average before turning around as expected and rallying 56 Handles into the close after an incredibly volatile trading session. This move lower saw my 4074 average buy level filled before covering this position at my 4085 revised T/P level. Subsequently, I emailed my Platinum Members to sell the S&P at 4112 before we sold off small to my 4105 T/P level after the close and I am now flat. Although the S&P may try and fill the ‘’Open Gap’’ from Tuesday at 4122, it is only a matter of time before we break and close below the 50 Day Moving Average. It is clear from last night’s FOMC Minutes that it is only a matter of time before the Fed start to taper. Today, I will be a seller from 4120/4135 with a 4151 ‘’Closing Stop’’. The S&P has strong support from 4040/4055 where I will again be a buyer with a 4029 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 4108. If I am taken long I will have a T/P level at 4069.
After the FOMC Minutes were released the Euro traded lower to my 1.2180 T/P level on Tuesday’s 1.2215 short position and I am now flat. Today, I will again be a seller from 1.2220/1.2260 with a 1.2305 tight stop. The Euro has support from 1.2055/1.2095 where I will be a small buyer with a 1.2005 stop. If I am taken short I will have a T/P level at 1.2185. If I am taken long I will have a T/P level at 1.2130.
June Dollar Index
The Dollar rallied to my 90.10 exit level on my 90.35 long position and I am now flat. The Dollar has support from 89.30/89.80 where I will again be a buyer with a 88.95 tight stop. If I am taken long I will have a T/P level at 90.15.
The DAX never came close to my sell level before selling off to the key 14950 support area. It is only a matter of time before this key support area is broken in my opinion. I will now lower my sell level to 15300/15380 with a 15455 tight stop. If I am taken short I will have a T/P level at 15260.
The FTSE sold off to my second buy level at 6930 for a 6970 average long position. We bounced and I used this move higher to exit this long position for a small loss at 6966 and I am now flat. The FTSE has support from 6820/6870 where I will again be a buyer with a 6775 stop. If I am taken long I will have a T/P level at 6905.
Dow Rolling Contract
At 8.30 pm on Tuesday the Dow was trading at 34250. Subsequently the Dow fell to a low of 33467 yesterday afternoon before bouncing over 400 points into the close. I do not like the price action in the Dow especially if we continue to build value below 34000. Yesterday’s move lower saw me buy the market at 33900 for a 33950 average long position. I took a loss on this position at 33800 as emailed to my Platinum Members before going short again into the close at 33910. I covered this short position for a small gain at 33870 and I am now flat. These markets are difficult to trade especially for short positions given the fact that the Fed will do everything they can to prevent a sell-off. The Dow has resistance from 34050/34200 where I will again be a seller with a 34325 ‘’Closing Stop’’. The Dow has support from 33300/33450 where I will be a small buyer with a 33155 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 33895. If I am taken long I will have a T/P level at 33595.
The NASDAQ traded lower to my second buy level at 13100 for a 13150 average long position before finally rallying to my 13180 revised T/P level and I am now flat. The NASDAQ has strong support from 12950/13050 where I will be an aggressive buyer with a 12875 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 13130.
No Change. I am still long at 169.30 with the same 169.35 T/P level and 168.65 ‘’Closing Stop’’.
Gold Rolling Contract
I am still flat as I continue to be a buyer on any dip lower to 1815/1827 with the same 1799 wider stop. If I am taken long I will have a T/P level at 1836.
Silver Rolling Contract
My Silver plan worked well with the market trading lower to my 27.60 buy level before rallying to my 28.05 revised T/P level and I am now flat. Today, I will again be a buyer 26.70/27.30 with a tight 26.35 stop. If I am taken long I will have a T/P level at 27.65.
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