Following another volatile trading session that saw plenty of two-way price action, U.S. Equity Markets ended yesterday’s trading session lower, led by the 1.1% decline in the NASDAQ 100. The U.S. Bureau of Labour Statistics’ Consumer Price Index (“CPI”) data for February jumped 7.9% year over year (“YOY”) compared with Wall Street’s expectation for a 7.9% gain and the prior month’s 7.5% increase. On a month-over-month (“MOM”) basis, those same numbers rose 0.8%, in line with the expectation but above January’s 0.6% gain. Both the core and headline numbers were the highest since 1982. Coming into the release, Wall Street has increasingly anticipated inflation metrics will peak during the first quarter before moving lower once more. Analysts and economists have questioned how much more costs can rise on top of the metrics we have seen over the last year. As a result, many institutional investors saw the potential for yesterday’s figures to come in below estimates. But that did not happen. And the high inflation numbers spooked investors again. Elsewhere, Russia and Ukraine made no progress again in talks, meaning that a diplomatic solution won’t come soon. This will continue to provide volatility for markets, which will swing wildly on any positive or negative headlines on the situation. Amazon (AMZN) was a bright spot out there yesterday. If it were not for the e-commerce giant, markets could have been much lower. Amazon announced a share split and a new buyback programme. This boosted shares more than 5%, and helped lift markets off low levels (since Amazon is one of the largest weightings in the S&P 500 Index). Within the S&P 500, six of the 11 sectors finished lower. European Markets closed lower. Ukraine and Russia’s Foreign Ministers made little progress in talks held in Turkey, as Russia said the conflict will continue until Ukraine meets its demands. Ukraine’s Deputy Chief of Staff Ihor Zhovkva said Kyiv is willing to declare itself neutral and would like to find a diplomatic resolution to the current conflict. Volkswagen CEO Herbert Diess said the economic fallout from war could be worse than that seen during the pandemic. The European Central bank (“ECB”) also had its policy release yesterday – the central bank moved up the timeline for tapering its asset purchases, while also saying it could reverse the taper if financial conditions tighten too much. But this also pushes up the rate-hike timeline, implying that the ECB could raise rates as soon as July. That is a lot quicker than the previous timeline – where ECB president Christine Lagarde has said no hikes before 2023. In Asia, The People’s Bank of China said it will give over $158 billion in foreign-exchange profits to the country’s treasury to help boost the fiscal spending outlook. Japanese Prime Minister Fumio Kishida said Japan’s government will need to take more steps to try and offset widespread price increases due to higher energy costs. The Bank of Korea said inflation is likely to remain above its 2% target for a considerable amount of time, but it still anticipates steady economic growth. U.S. Commerce Secretary Gina Raimondo warned Chinese companies against trying to go around Russian sanctions. Elsewhere, Oil closed 2.23% lower on little news while Gold rose 0.7%, rallying back above $2,000 as investors rotated into safe-haven assets.
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For anyone following my Platinum Service it made 215 points yesterday and is now ahead by 2099 points for March. The Platinum Service made an impressive 5324 points gain in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss, 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, after ending March with an impressive gain of 3769 points. 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 0.43% lower at a price of 4259.
The Dow Jones Industrial Average closed 112 points lower for a 0.34% loss at a price of 33,174.
The NASDAQ 100 closed 1.1% lower at a price of 13,591.
The Stoxx Europe 600 Index closed 3.4% lower.
This morning, the MSCI Asia Pacific Index rose 2.2%.
This morning, the Nikkei closed 2.05% lower at a price of 25,162.
Currencies
The Bloomberg Dollar Spot Index closed 0.6% higher.
The Euro closed 0.7% lower at $1.0998.
The British Pound closed 0.8% lower at 1.3088.
The Japanese Yen fell 0.3%, closing at $116.52.
Bonds
Germany’s 10-year yield closed six basis points higher at 0.26%.
Britain’s 10-year yield closed one basis points lower at 1.52%.
US 10 Year Treasury closed six basis points higher 1.99%.
Commodities
West Texas Intermediate crude closed 2.23% lower at 107.22 a barrel.
Gold closed 0.7% higher at $2001.10 an ounce.
This morning on the Economic Front we already had the release of German February Final CPI which came in as expected with a +5.1% print. Also released was U.K. January GDP which rose 0.8% versus +0.2% expected. At 9.30 am we have U.K. Consumer Inflation expectations. Finally, we have U.S. University of Michigan Consumer Sentiment at 3.00 pm and a speech from President Biden at 3.15 pm.
Cash S&P 500
Despite all the negative news thrown at the S&P yesterday, the market held in reasonably well, helped by the 7% fall in the VIX as internals again improved. The McClellan Oscillator closed in positive territory for the second consecutive session with a +22 print. My S&P plan worked well with the market trading the whole of my buy range for a 4230 average long position (low 4209) before rallying to my 4242 revised T/P level and I am now flat. Overnight, the S&P hit a low of 4234 before rebounding to a 4280 high print and is currently trading at 4260 as I go to press. As long as the S&P can hold the key 4180/4200 support area I will continue to be a buyer of dips. The S&P has initial support from 4205/4235 where I will again be an aggressive buyer with a 4174 stop. Where possible I want to be flat over the weekend. The S&P has resistance from 4365/4395 where I will be a strong seller with no stop.
EUR/USD
My Euro plan worked well with the market trading higher to my 1.1100 sell level after the ECB Meeting before trading lower to my 1.1045 T/P level and I am now flat. Today, I will again be a seller on any further rally to 1.1060/1.1120 with a 1.1185 wider stop.
March Dollar Index
No Change. I am still flat and I will continue to look to buy the Dollar on any dip lower to 97.30/97.90 with a 96.75 wider stop.
Cash DAX
The DAX was selling off as I posted yesterday’s commentary, trading near the bottom of my buy range by the time you got to read my commentary. I bought the DAX at 13510 before the market rallied over 100 points. I did not take my gain and was subsequently stopped out of this position at 13415 and I am still flat. Despite the DAX closing 3.5% lower yesterday, the market actually traded well indicating that buyers were nibbling after the recent 20% sell-off. The DAX has support from 13220/13320 where I will be a strong buyer with a 13095 wider stop. If I am taken long I will have a T/P level at 13410.
Cash FTSE
My FTSE plan worked well with the market trading lower to my 7080 buy level before rallying to my 7135 T/P level overnight and I am now flat. Given the weakness of Sterling I am happy to be a buyer of the FTSE on dips. We have support from 7040/7100 where I will be a buyer with a wider 6975 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The Dow traded lower to my 32880 buy level before rebounding to an overnight high at 33380. Unfortunately, I covered my long position too early at my 33010 revised T/P level and I am now flat. The Dow has support from 32500/32800 where I will again be an aggressive buyer with no stop for now. If this buy range is triggered, I will come back with a new update for my Platinum Members.
Cash NASDAQ 100
No Change. I am still long and wrong in the NDX at a price of 13905. I will now lower my exit level to 13770 and if this level is executed, I will come back with a new update for my Platinum Members.
June BUND
Lagarde waking from her two year sleep to finally acknowledge that we do have inflation in the Euro-Zone saw Bund Yields spike on this announcement. Subsequently, I was stopped out of my 164.30 long position at 163.45 and I am now flat. Ahead of the weekend I am going to stay flat the Bund as I do not have an edge in this market at this time. One of the main reasons I am staying flat is I want to see if 10-year Treasuries can break 2% ahead of next week’s FOMC Meeting.
Gold Rolling Contract
I am still flat. Gold has support from 1958/1973 where I will continue to be a small buyer with a 1943 stop.
Silver Rolling Contract
Silver rallied to my 25.65 T/P level and I am now flat having exited Tuesday’s 25.30 average long position. Silver has support from 24.70/25.30 where I will again be a buyer with a 23.95 wider stop. If I am taken long I will have a T/P level at 25.75.
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