U.S. Equity Markets closed mixed following a volatile trading session in which the S&P had a 130 Handle range. Although the Small Cap Russell 2000 closed 1.60% lower the NASDAQ 100 rebounded ending yesterday’s session with a small 0.79% gain. Investors poured into the safety of gold and government bonds following the SVB collapse, sending yields plummeting. Additionally, market expectations for the Federal Reserve’s interest-rate path dramatically dipped, with investors now seeing a terminal rate below 4.75%. This is almost a full 100 basis points lower than the rate expectation that followed Jerome Powell’s speech last week. A joint statement by the Fed, the Federal Deposit Insurance Corporation, and the U.S. Department of the Treasury noted all SVB depositors will have full access to their funds. The U.S. Bureau of Labour Statistics is scheduled to release February’s Consumer Price Index (“CPI”) figures this week, providing a key update on the state of inflation. Within the S&P 500 Index, four of the 11 sectors finished lower. European Markets got slammed. The European Central Bank (“ECB”) is expected to raise interest rates during its March policy meeting on Thursday, as it attempts to battle a fragile economic landscape and persistently high inflation. Euro-Zone bond markets rallied as yields dropped due to a massive adjustment in the rate outlook following the SVB collapse. HSBC announced that it will buy the U.K. arm of SVB as it attempts to boost confidence in the financial system that was plagued with volatility over the weekend. U.K. Business Confidence reached its highest level since Russia’s invasion of Ukraine, according to a survey by Accenture and S&P Global. In Asia, Chinese President Xi Jinping was elected to an unprecedented third term, cementing his control over the world’s second-largest economy. Japan’s Fourth Quarter Business Sentiment Index declined for the first time in a year as manufacturers were hit by higher materials and energy costs. China’s February Credit grew faster than expected as the Money Supply expanded at the quickest pace in nearly seven years, supporting the nation’s economic recovery. China unexpectedly broke from tradition as President Jinping retained both Yi Gang, as governor of the People’s Bank of China, and Lie Kun, as Finance Minister, despite both reaching official retirement age. Elsewhere, Oil fell 2.92% while Gold surged 2.70%.
To mark my 2750th 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 1105 points yesterday and is now ahead by 2444 points for March after finishing February with a gain of 3164 points, 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 0.15% lower at a price of 3855
The Dow Jones Industrial Average closed 90 points lower for a 0.28% loss at a price of 31,819.
The NASDAQ 100 closed 0.79% higher at a price of 11,923.
The Stoxx Europe 600 Index closed 2.42% lower.
Yesterday, the MSCI Asia Pacific rose 1.20%.
Yesterday, the Nikkei closed 1.11% lower at a price of 27,832.
Currencies
The Bloomberg Dollar Spot Index closed 0.9% lower.
The Euro closed 0.7% higher at $1.0730.
The British Pound closed 1.2% higher at 1.2181.
The Japanese Yen rose 1.1% closing at $133.36.
Bonds
Germany’s 10-year yield closed 22 basis points lower at 2.24%.
Britain’s 10-year yield closed 27 basis points lower at 3.37%.
U.S.10 Year Treasury closed 16 basis points lower at 3.54%.
Commodities
West Texas Intermediate crude closed 2.92% higher at $74.44 a barrel.
Gold closed 2.70% higher at $1910.10 an ounce.
This morning on the Economic Front we have U.K. Employment including Average Earnings at 7.00 am. This is followed by NFIB Business Optimism at 11.00 am. Next, we have the crucial CPI data at 12.20 pm. Finally, the Fed’s Bowman speaks at 9.20 pm.
Cash S&P 500
I posted Monday’s Daily Commentary on Sunday afternoon as I suspected that the Fed would intervene and support the banks given the SLB carnage. There is no doubt that Powell is shaping up to be the worst Fed Chairman ever and that is saying something. Only on Tuesday he talked about raising rates to 6% pushing the two-year Treasury above 5% He did not see the SLV disaster coming yet the CEO of SLV sits on the San Francisco Fed Board. Two-year yields have collapsed trading at 4.34% yesterday morning, helping send 10-year yields down to 3.54%- 50 basis points below the highs of last week. There is no chance of a rate hike with my guess the next move will be lower. Saving the depositors saw the S&P hit a high on Sunday evening at 3937 before falling 130 Handles to yesterday’s 3807 low print. Every signal that I follow is oversold. The McClellan Oscillator closed at -334 last night. This is one of the most negative reading that I can remember. Every time the MO prints below -250 the S&P tends to be at least 5% higher over the coming weeks. High Bond Yields were a massive negative last week. Now the fundamental reasons for higher yields being bad are all of a sudden no longer there. The rate hike environment is over. Maybe, the Fed do a face saving 25 basis points next week, but the rate hike cycle is over. We may have seen the last of QT as well given what transpired on Sunday night shows that we are back in the intervention regime. The 14-Day RSI on the Bank Index is the result of an ongoing crisis. After the 9/11 attacks the RSI hit 8. Every time the Bank RSI is below 19, this has resulted in intervention by the Fed and rate cuts. If the S&P continues to panic my panic risk zone comes in at 3730. I do not see that happen but if it does, I will be an aggressive buyer. With $NYMO hitting a price of -117 at one stage yesterday coupled with such a negative MO forces me to remain only on the buy side of the ledger. Yesterday, my S&P plan worked well as the market traded the whole of my buy range for a 3835 average long position before rallying to my 3901 revised T/P level. Subsequently, I emailed my Platinum Members to buy the S&P again at 3865. I will add to this position at 3835 with no stop for now. We are nicely ahead for the month so have some room to play with. I will have a T/P level on this position at 3910. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
EUR/USD
It is interesting that the Dollar weakened yesterday despite the Equity Markets closing lower. Ahead of CPI, I am reluctant to chase the Euro higher. We have support from 1.0580/1.0660 where I will be a small buyer with a higher 1.0515 ‘’Closing Stop’’.
June Dollar Index
The Dollar fell hard yesterday, closing lower by 0.90% I am still flat and I have now rolled to the June Contract. I will now lower my sell level to 103.90/104.60 with a tight 105.15 ‘’Closing Stop’’.
Cash DAX
The DAX closed lower by over 2.50% yesterday. This is a huge move, resulting in my 15000 average buy level getting triggered. To reduce my risk I exited this position at 15045 and I am still flat. The DAX has support below from 14700/14800 where I will again be a buyer with a 14595 ‘’Closing Stop’’.
Cash FTSE
European Shares got hit hard yesterday as finally we are seeing some catchup with the carnage in America. This move lower saw the whole of my buy range filled for a now 7610 average long position. I will now lower my T/P level to 7670. I will leave my 7525 ‘’Closing Stop’’ unchanged. If this view changes I will be back with an update for my Platinum Members.
Dow Rolling Contract
My Dow plan worked well as the market sold off to my 31700 buy level before rallying to my 32045 T/P level as emailed to my Platinum Members and I am now flat. The big driver for the Dow is the continued sell-off in the Bank Index. This Index fell a further 11% yesterday, resulting in the 14-Day RSI closing with a 12 Handle. Apart from 9/11, I have never seen the RSI for the Bank Index so low. It is clear that Fed have no idea what they are doing as mentioned at length in my S&P Commentary above. From Sunday’s action it is also clear that they will not let a bank fail without intervention. The Dow has support from 31450/31600 where I will again be an aggressive buyer with no stop or T/P level for now. If this range is triggered, I will come back with an update for my Platinum Members.
Cash NASDAQ 100
No Change. I am still long from last Thursday at 12030 with a now lower 12090 T/P level. I will leave my 11795 ‘’Closing Stop’’ unchanged. If any of the above levels are hit I will be back with a new update for my Platinum Members.
June BUND
Wow!! The Bund is trading 300 points higher from where we closed on Friday evening. The Bund is trading at a yield of 2.28% which is 50 Basis points lower than last week’s high. This is one of the most aggressive 700-point rallies in the Bund that I have ever seen. The Bund is now short-term overbought. Yesterday the Bund hit my initial 133.20 buy level before rallying to my too tight 133.80 T/P level and I am now flat. The Bund made a morning high at 137.20 before selling off 120 points into the New York close. Today, I will be a seller from 136.80/137.60 with a 138.15 tight ‘’Closing Stop’’. I no longer want to be long the Bund at this time.
Gold Rolling Contract
Gold continued Friday’s aggressive move higher, closing last night above $1900. Thankfully we have had no sell levels in Gold. I will now raise my buy level to 1845/1872 with a higher 1829 ‘’ Closing Stop’’.
Silver Rolling Contract
Silver surged yesterday, justifying me holding onto to my 23.10 average long position. Silver is trading at 21.70 as I go to press. The ferocity of the move off last week’s 18.80 low print would suggest that the low for Silver is now in the market. I am glad that I was an aggressive buyer for my Pension Fund last week. I will now raise my stop on this position to 20.45 while I will continue to have no T/P level. If this view changes I will be back with a new update for my Platinum Members.
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