U.S. Equity Markets got hit hard yesterday following the long-weekend, led by the NASDAQ 100 which closed with a loss of 2.57%. Higher bond yields have sparked global growth concerns, as it indicates higher borrowing costs for companies. So, with bond yields continuing to move up, investors fled stocks. This was coupled with weak economic data – the New York Federal Reserve’s Empire State Manufacturing Index dipped into negative territory, hitting its lowest level since May 2020. This sparked fears that the Federal Reserve could be tightening policy into a slowing economy, which would hurt the economic growth picture even more. In other economic data, the National Association of Home Builders’ Housing Market Index eased off a 10-month high in January but still remained elevated, signalling ongoing optimism for homebuilders. The declines heavily outnumbered the advances today in the S&P 500, as investors sold just about everything. Bank stocks were hit especially hard, with Goldman Sachs (GS) missing estimates and increasing its provisions for future loan losses. And tech shares sold off heavily on the higher interest rate concerns. But there were a couple bright spots… one of which was the video-game sector, led by Activision Blizzard (ATVI) after the announcement that Microsoft (MSFT) would buy the company for a 40% premium. Visa (V) also bucked the trend, rising after Amazon (AMZN) backed off its threat to ban transactions using Visa’s credit cards in the U.K. Within the S&P 500, 10 of the 11 sectors finished lower. European Markets closed lower on growth concerns. The Centre for European Economic Research’s (“ZEW”) investor confidence survey for January hit the highest level since July on expectations for a strong recovery. GlaxoSmithKline (GSK) and Vir Biotechnology’s (VIR) antibody treatment won World Health Organisation approval for treating COVID-19 in patients who are likely to require hospitalisation. The European Central Bank announces its latest monetary policy update tomorrow, with investors paying close attention to updates on stimulus plans. In Asia, The Bank of Japan left its monetary policy unchanged but raised the economic growth outlook for 2022 from 2.9% to 3.8% while saying it expects core inflation to increase. Chinese President Xi Jinping called on global leaders to do more to bring stability to the supply chain and bring inflation back under control. South Korea’s finance ministry said it would propose a $12 billion extra budget next week to assist small businesses hurt by pandemic restrictions. Japan’s government is expected to make an announcement this week introducing emergency measures for Tokyo and other parts to stem rising coronavirus infections. Elsewhere, Oil rose 2.29% as Goldman Sachs strategists said crude would hit $100 per barrel later this year, while Bitcoin fell 4%.
To mark my 2475th 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 lost 410 points yesterday and is still ahead by 595 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, and 2077 points last January. 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 1.84% lower at a price of 4577.
The Dow Jones Industrial Average closed 543 points lower for a 1.51% loss at a price of 35,368.
The NASDAQ 100 closed 2.57% lower at a price of 15,210.
The Stoxx Europe 600 Index closed 0.8% lower.
Yesterday, the MSCI Asia Pacific Index rose 0.1%.
Yesterday, the Nikkei closed 0.27% lower at a price of 28,257.
Currencies
The Bloomberg Dollar Spot Index closed 0.6% higher.
The Euro closed 0.7% lower at $1.1323.
The British Pound closed 0.4% lower at 1.3590.
The Japanese Yen fell 0.1%, closing at $114.65.
Bonds
Germany’s 10-year yield closed two basis points higher at -0.01%.
Britain’s 10-year yield closed four basis points higher at 1.23%.
US 10 Year Treasury closed nine basis points higher at 1.88%.
Commodities
West Texas Intermediate crude closed 2.29% higher at $85.39 a barrel.
Gold closed 0.15% lower at $1,813.10 an ounce.
This morning on the Economic Front we have U.K CPI and PPI along with German CPI at 7.00 am. Next, we have Euro-Zone Current Account and Construction Output at 9.00 am and 10.00 am respectively. This is followed by U.S. MBA Mortgage Applications at 12.00 pm and Housing Starts at 1.30 pm. Finally, we have a 20-Year Treasury Auction at 6.00 pm which will be important given the rise in Yields over the past week.
Cash S&P 500
The S&P got hit for over 100 Handles yesterday as the 10 Year Treasury Yield tested 1.90%. This move lower saw the market hit my average buy level of 4632 before thankfully having a tight stop on this position at 4614 and I am now flat. The S&P has support at the December 20 low at 4532 with further support at the December 6 low of 4500. A break and close below 4500 will likely lead to a test of the 200 Day Moving Average which comes in at 4423 this morning. Today, I will be an aggressive buyer from 4510/4535 with a 4489 stop. If I am taken long I will have a T/P level at 4561. With the 14-Day RSI closing at 38 last night I no longer want to be short the S&P at this time.
EUR/USD
The Dollar rose 0.6% yesterday on the back of the rise in Bond Yields. This move higher saw the Euro trade to an intra-day low of 1.1317, thus stopping me out of my 1.1410 long position at 1.1345 and I am still flat. The Euro has strong support from 1.1240/1.1290 where I will again be a buyer with a 1.1195 stop. Despite yesterday’s bearish price action, I still do not want to be short the Euro at this time.
March Dollar Index
I am still flat. I will now raise my buy level to 94.80/95.30 with a higher 94.35 stop. If I am taken long I will have a T/P level at 95.60.
Cash DAX
In contrast to the U.S. Indexes, my DAX plan worked well with the market trading the whole of my buy range for a 15735 average long position before rallying to my 15810 T/P level and I am now flat. This morning, the DAX is trading lower at 15770. We have support from 15570/15650 where I will again be a buyer with a 15495 wider stop. I still do not want to be short the DAX at this time.
Cash FTSE
Despite the increased volatility in American Markets, the FTSE traded in a narrow range. The market hit my 7580 T/P level on my 7615 short position and I am still flat. Today, I will again be a seller from 7615/7655 with the same 7705 stop.
Dow Rolling Contract
As I was long both the S&P and NDX, I waited to buy the Dow which I did near the bottom of my buy range at 35610, before getting stopped out of this position at 35395 and I am still flat. The 200-Day MA for the Dow comes in at a price of 34945. Given how oversold the RSI is becoming, I will be an aggressive buyer on any test of this key support level. Today my Dow buy level will be from 34900/35150 with a tight 34745 stop. I still do not want to be short the Dow at this time. If I am taken long I will have a T/P level at 35380.
Cash NASDAQ 100
The NDX traded the whole of my buy range for a now 15360 average long position. I will leave my stop unchanged at 15195 while lowering my T/P level to 15420. If any of the above levels are hit I will be back with a new update for my Platinum Members. If I am stopped, I will look to buy the NDX again on any further dip to 14850/15010 with a 14775 stop. If I am taken long a second time I will have a T/P level at 15140.
March BUND
Shortly after the European Markets opened, I was stopped out of my 170.25 long position at 169.55 and I am now flat. The Bund is now extremely oversold. We have support from 168.40/168.90 and I will lower my buy level to this range with a 167.95 stop. If I am taken long I will have a T/P level at 169.45.
Gold Rolling Contract
No Change. Gold continues to struggle to break the 1830/1840 resistance level. With everyone still long Gold I am nervous and today, I will leave my 1780/1793 buy level unchanged with the same 1769 stop
Silver Rolling Contract
Silver missed my buy level before rallying and I am still flat. I will now raise my buy level to 22.50/23.10 with a 21.95 stop. If I am taken long I will have a T/P level at 23.55.
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