Equity Markets resumed trading after the long-weekend to be met by a barrage of selling. Higher Bond Yields saw the NASDAQ 100 lead the decline, closing lower by 2.41%. The across the board selling saw the VIX close higher by almost 15% at a price of 22.87. Retail earnings season unofficially kicked off to a disappointing start as retail giants Walmart (WMT) and Home Depot (HD) reported that discretionary purchases continued to decline as inflation remains a real roadblock to increased consumer spending. The Preliminary Composite PMI for January rebounded to an eight-month high as business activity surged forward on the heels of slowing inflation. Investors are adjusting rate expectations as the latest forecasted peak rate is now sitting at around 5.30% in July, up almost a full 50 basis points since the recent low. Federal Reserve Bank of Richmond President Thomas Barkin reiterated the central bank should stick to smaller interest rate adjustments to better fine-tune monetary policy. Within the S&P 500 Index, all the 11 sectors finished lower. European Markets closed lower. ECB Governing Council member Olli Rehn said inflation growth remains high meaning it likely won’t reach an interest rate peak before this summer. Group of Seven Finance Ministers will meet on Thursday to discuss new actions to be taken against Russia in an attempt to force Moscow to end its invasion of Ukraine. German Investor Expectations for February showed continued improvement for the Euro-Zone’s largest economy, logging its fifth straight monthly increase amid lessening concerns over a recession. Euro-Zone PMI data for February jumped to 52.3, higher than both the prior month and expectations, with the surge largely driven by better than expected services’ data. In Asia, Minutes from the Reserve Bank of Australia’s February meeting showed that there was serious consideration for raising rates by 50 basis points, but that the consensus that inflation had peaked allowed the central bank to move forward with its 25-basis point rate hike. Tensions between China and Australia seem to be easing, as Chinese cotton buyers are among the first to be buying Australian product in the anticipation that the unofficial embargo on Australian exports would be lifted soon. India’s Power Ministry enacted an emergency rule that push coal-fired power plants to operate at full capacity during the summer to prevent widespread power outages. The People’s Bank of China left its benchmark lending 1- and 5-year Loan Prime Rates unchanged while adding $61 billion in liquidity to the financial system to support economic growth. Elsewhere, Oil closed 0.38% lower while Gold fell 0.34% after a quiet session.
To mark my 2725th 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 1022 points yesterday and is now ahead by 1874 points for February after closing January with a gain of 4687 points, while finishing December with a gain of 2054 points. November ended with a gain of 4789 points, while finishing October with a record gain of 9619 points, making 6660 points in September, after closing August with a gain of 2228 points, having made 2660 points in July, following a gain of 3371 points in June. The Service made 3651 points in May, after making 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
Equities
The S&P 500 closed 2.0% lower at a price of 3997
The Dow Jones Industrial Average closed 697 points lower for a 2.06% loss at a price of 33,129.
The NASDAQ 100 closed 2.41% lower at a price of 12,060.
The Stoxx Europe 600 Index closed 0.23% higher.
Yesterday, the MSCI Asia Pacific fell 0.8%.
Yesterday, the Nikkei closed 0.21% lower at a price of 27,473.
Currencies
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.3% lower at $1.0649.
The British Pound closed 0.5% higher at 1.2102.
The Japanese Yen fell 0.4% closing at $134.86.
Bonds
Germany’s 10-year yield closed 8 basis points higher at 2.55%.
Britain’s 10-year yield closed 14 basis points higher at 3.61%.
U.S.10 Year Treasury closed 15 basis points higher at 3.97%.
Commodities
West Texas Intermediate crude closed 0.38% lower at $76.05 a barrel.
Gold closed 0.3% lower at $1837.10 an ounce.
This morning on the Economic Front we have German CPI at 7.00 am followed by the IFO Business Expectations at 9.00 am. Next, we have U.S. MBA Mortgage Applications at 12.00 pm. Finally, we have a 5-Year Treasury Auction at 6.00 pm and the FOMC Minutes at 7.00 pm.
Cash S&P 500
Wrong! The S&P has now wiped out all of February’s gains following the 150 Handle sell-off since last week. This move lower saw the S&P close below 4000. Now nobody will ring a bell at the lows but the intensity of yesterday’s sell-off has left a number of indicators oversold. The 2-Hour Chart sees its first oversold reading of 2023 while the $NYMO closed with a pretty cooked reading of -80. This move lower stopped me out of my 4086 long position at 4012 and I am still flat. We are still nicely ahead for the month but unfortunately yesterday’s loss did hit February’s performance. The 50 Day Moving Average comes in at 3978 while the 200 Day MA is at 3941. Both of these levels will need to broken and closed below for me to turn bearish. I expect a decent bounce on any initial test of these keep support levels. Another reason to be a buyer is the McClellan Oscillator which closed last night at -250. Every time the MO prints -250/-300, the S&P is 5% higher within a couple of weeks. The S&P has support from 3960/3980 where I will be an aggressive buyer with no stop. If I am taken long I will have a T/P level at 4012.
EUR/USD
No Change. I am still long at 1.0670. I will leave my 1.0715 T/P level unchanged. I will continue to add to this position at 1.0600 while leaving my 1.0545 ‘’Closing 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
Although the Dollar closed 0.4% higher yesterday, the market still traded in a narrow range. Given the rise in Bond Yields and the fall in Equity Markets I would have expected the Dollar to be higher. The Dollar has resistance from 104.60/105.20 where I will be a small seller with a 105.75 ‘’Closing Stop’’. I no longer want to be long the Dollar at this time.
Cash DAX
Anyone trying to short the DAX is left frustrated as any accrued profit quickly evaporates given the level of buying on any dip. Yesterday was no exception. After the DAX hit my buy level at 15320 we rallied over 100 points, enabling me to cover this position at my 15390 T/P level and I am now flat. The price action keeps telling me there is no point in being short unless the DAX breaks and closes below 15,000 for two consecutive trading sessions. Today, I will be a small buyer from 15100/15180 with a wider 14995 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 15265
Cash FTSE
The boring price action in FTSE continues. Despite the aggressive sell-off in American Indexes, the FTSE hardly moved. I am still flat. I will now lower my buy level to 7850/7920 with a lower 7795 tight ‘’Closing Stop’’.
Dow Rolling Contract
Wrong!! The 700-point sell-off in the Dow saw the market trade the whole of my buy range for a 33420 average long position before stopping me out on the close at 33195 and I am now flat. I am still flat. This move lower saw the Dow close below its 50-Day Moving Average (33620). Today I will be a small seller from 33550/33800 with a tight 33905 ‘’Fixed Stop’’. If I am taken short I will have a T/P level at 33370. I do not want to be long the Dow at this time.
Cash NASDAQ 100
Rising Bond Yields saw the NDX get hit hard yesterday, falling by 2.35%. This move lower saw the whole of my buy range filled for a now 12130 average long position. I will leave my 11895 ‘’Closing Stop’’ unchanged. I will also lower my T/P level to 12210. If any of the above levels are hit I will be back with a new update for my Platinum Members.
March BUND
Wrong!! The Bund got hit hard yesterday. This move lower saw my 135.35 long position stopped at 134.08 and I am now flat. This is the first loss in the Bund in a few weeks as up till now buying the dip has proved to be the correct decision. With 10 -Year Treasury Yields now close to 4% there is plenty of room for the Bund to fall further. Ahead of this evening’s FOMC Minutes my only interest in buying the Bund is on a further move lower to 132.60/133.30 with a 131.95 ‘’Closing Stop’’.
Gold Rolling Contract
Despite rising Bond Yields and a rising Dollar, Gold traded in a narrow range yesterday. I am still flat. As I continue to have a large, long position in Silver, I will now lower my Gold buy level to 1805/1820 with a lower 1789 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. Silver has traded sideways since we saw the market fall 3%,10 days ago. I am still convinced that it is only a matter of time before Silver takes out the key 24.00/25.00 resistance area. Remember in May 2011, Silver was trading above $50. I am still long at an average rate of 23.10 with the same no stop policy. I will leave my T/P level unchanged at 23.50. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Recent Comments