Despite another volatile trading session, U.S. Equity Markets finished the day lower, with the Dow leading the sell-off, closing lower by 0.47%. There was still a lot of focus on Wednesday’s Federal Reserve Minutes, which were too hawkish for investors’ liking. Yesterday afternoon, St. Louis Fed president James Bullard said the central bank could begin raising rates as soon as March to control inflation – a quicker timeline than many on Wall Street would like. Economic data was mixed. Jobless Claims rose from the week before and came in above estimates. Even so, they remain near their historical lows. The ISM non-manufacturing index fell more than expected on weaker orders and the third-highest price readings on record. Still, the Index remains well above the key reading of 50, indicating that the economy is still expanding. Now, investors are on the lookout for this afternoon’s Non-Farm Payroll data for a better idea of what the labour market looks like. A strong labour market could push the Fed to pull back on stimulus faster than expected. Within the S&P 500, six of the 11 sectors finished lower. European Markets closed lower. German Factory Order figures for November beat expectations, rebounding into positive territory as automobile and parts demand surged. Italy’s government approved a new measure that would require COVID-19 vaccinations for individuals 50 and older in hopes of stemming rising infections. Euro-Zone producer price index (“PPI”) data rose more than expected in November but maintained a slower increase than in September and October, indicating inflation pressures may be easing. In Asia, Markit/Caixin’s China composite purchasing managers’ index (“PMI”) data for December gained compared with November as manufacturing and services sector activity increased. The Bank of Japan was said to consider adjusting policy language to no longer say price risks are “skewed to the downside,” signalling its inflation views are changing. Technology stocks dropped, following the U.S. sell-off on worries that tightening Fed policy will boost borrowing costs, eroding profitability and slowing growth. The People’s Bank of China drained almost $16 billion in funds from the financial system, bringing the two-day total to around $89 billion. Elsewhere, Oil rose a further 2.07% on little news, while Bitcoin fell 2% as the Fed remained hawkish in its most recent minutes.
To mark my 2450th 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@tradernoble.com for details
For anyone following my Platinum Service it made 290 points yesterday and is now ahead by 73 points for January, after ending December with a loss of 932 points, having made 2466 points in November, 1028 points in October, 2866 points in September, 1543 points in August, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, having ended March with an impressive gain of 3769 points, 3286 points in February, 2077 points in January, and 2273 points last December. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Equities
The S&P 500 closed 0.10% lower at a price of 4696.
The Dow Jones Industrial Average closed 170 points lower for a 0.47% loss at a price of 36,236.
The NASDAQ 100 closed 0.04% lower at a price of 15,765.
The Stoxx Europe 600 Index closed 1.1% lower.
Yesterday, the MSCI Asia Pacific Index fell 1.3%.
Yesterday, the Nikkei closed 2.46% lower at a price of 28,611.
Currencies
The Bloomberg Dollar Spot Index closed 0.1% higher.
The Euro closed 0.2% lower at $1.1287.
The British Pound closed 0.1% lower at 1.3525.
The Japanese Yen fell 0.1%, closing at $115.94.
Bonds
Germany’s 10-year yield closed one basis points lower at -0.13%.
Britain’s 10-year yield closed six basis points higher at 1.16%.
US 10 Year Treasury closed two basis points lower at 1.71%.
Commodities
West Texas Intermediate crude closed 2.07% higher at $79.46 a barrel.
Gold closed 0.75% lower at $1,788.10 an ounce.
This morning on the Economic Front we have the German Trade Balance at 7.00 am, followed by U.K Construction PMI at 9.30 am. Next, we have Euro-Zone CPI, Retail Sales, and the Economic Sentiment Indicator at 10.00 am. At 1.30 pm we have U.S. Non-farm Payrolls including the Unemployment Rate and Average Earnings at 1.30 pm. Finally, we have Consumer Credit at 8.00 pm.
Cash S&P 500
Volatility continued yesterday with the S&P trading in a 55 Handle Range which included plenty of two-way price action within this range. My plan worked well with the market hitting my 4723 sell level, before selling off to my 4708 T/P level and I am now flat as we wait for the key NFP data at 1.30 pm. The S&P has strong support from 4640/4655 where I will be an aggressive buyer with a higher 4623 stop. The S&P has resistance from 4735/4752 where I will be a small seller with a 4768 stop. If I am taken short I will have a T/P level at 4722. If I am taken long I will have a T/P level at 4669.
EUR/USD
No Change. I am still a buyer on any dip lower to 1.1200/1.1250 with the same 1.1155 stop. I will not chase the Euro lower, leaving my 1.1405/1.1455 sell level unchanged with the same 1.1501 stop.
March Dollar Index
The Dollar again traded in a narrow range, just missing my initial 95.70 buy level with a 95.86 low print before rallying 35 points into the New York close. Today, I will continue to be a buyer on any dip lower to 95.20/95.70 with the same 94.95 stop. If I am taken long I will have a T/P level at 96.00.
Cash DAX
Despite the aggressive sell-off in the DAX late Wednesday, the market traded in a narrow range yesterday and I am still flat. Ahead of the NFP Report, I will not chase the market higher, leaving my 15760/15860 buy level unchanged with the same 15695 stop. Meanwhile, I will also leave my 16220/16300 sell level unchanged with a 16405 tight stop.
Cash FTSE
My FTSE plan worked well with the market trading higher to my 7490 sell level before trading lower to my 7440 T/P level and I am now flat. I will continue to be a strong buyer on any further move lower to 7320/7370 with the same 7265 stop. The FTSE has resistance from 7500/7550 where I will be a small seller with a 7602 stop.
Dow Rolling Contract
Thankfully, after I posted yesterday morning, the Dow rallied to my 36510 T/P level on Wednesday’s 36420 average long position and I am now flat. The Dow again got hit hard into the close falling 300 points from the pre-lunch 36536 high print. The Dow has strong support from 35750/35950 where I will be an aggressive buyer with a 35595 stop. Ahead of the weekend I do not want to be short the Dow unless we rally back to the 37,000 area. If we do I will come back with a new update for my Platinum Members. If I am taken long I will have a T/P level at 36160.
Cash NASDAQ 100
No Change. My only interest in buying the NASDAQ is still on a further move lower to 15300/15450 where I will be an aggressive buyer with the same 15195 stop. If I am taken long I will have a T/P level at 15690. Given the recent 8% fall in the NDX, I do not want to be short the market at this time.
March BUND
The Bund missed my 169.70 buy level with a 167.98 low print before rallying 50 points into the close and I am still flat. Even though the Bund is oversold I will not chase the market higher ahead of the key NFP data this afternoon. Therefore, my 169.20/169.70 remains unchanged with the same 168.75 wider stop. If I am taken long I will have a T/P level at 170.18.
Gold Rolling Contract
Gold fell 0.75% yesterday and I am still flat. I still do not trust the price action in Gold as most investors and traders continue to hold long speculative positions. I much prefer to be a buyer of Silver given how under loved this market is. I will now lower my Gold buy level to 1755/1770 with a lower 1743 stop.
Silver Rolling Contract
I am still flat. Silver just missed yesterday’s buy level before having a small rally into the New York close. Today, I will continue to be a buyer from 21.30/21.90 with a 0.75 stop. If I am taken long I will have a T/P level at 22.35.
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