The Santa Rally continued on Tuesday but this time the Russell 2000 and equal-weighted S&P led the NDX and S&P 500, with the lower yield environment helping after the Bank of Japan stood pat. Treasuries (10yr yield -3bps at 3.93%) tracked JGBs firmer after Governor Ueda gave little in the way of signs that January was in play for Japan exiting negative interest rates, but yields closed off the lows after hot U.S. Housing Starts and Canadian CPI data, not to mention the renewed bid for crude amid continued Red Sea transit uncertainty – note late Bloomberg source reports that the US is looking at a larger and deeper attack (beyond the Task Force) against Yemen’s Houthis. The Dollar was ultimately sold, although the Japanese Yen still remains the G10 laggard, with USD/JPY currently holding around 144 vs earlier peaks just under 145. We had some more Fed rhetoric from two 2024 voters in Bostic (who repeated his relatively hawkish view from last Friday that he sees two Fed cuts in 2024) and Barkin (who was hesitant to get into details on rate cuts), but Fed pricing remains little changed at near six 25bp cuts priced across 2024. In wake of the housing starts data, the Atlanta Fed GDPNow tracker for Q4 was raised to a new high of 2.7% from 2.6%, which would mark a smaller fall in growth from Q3’s 5.2% rate than many on Fed had expected for Q4. Housing Starts surged 14.8% in November to 1.56mln (prev. 1.359mln), its strongest pace since May, well above the expected 1.36mln and upper bound of the forecast range (1.424mln). Building Permits declined 2.5% to 1.46mln (prev. 1.498mln), slightly shy of the forecasted 1.465mln. Single-family and multi-family starts both posted solid gains of 18% (to 1.143mln) and 6.9% (to 417,000), respectively. Oxford Economics think multi-family starts are more vulnerable to a decline, as recovering homebuilder sentiment and an ongoing need for inventory should cushion the downside for single-family starts. Overall, Oxford does not expect the November pace of Starts to be sustained. But taken as a whole, the November data, along with the recent decline in mortgage rates below 7%, lend an upside risk to that forecast. Elsewhere, Oil rose 1.4% while a weaker Dollar saw Gold close higher by over 1%.
To mark my 2925th 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 190 points yesterday and is now ahead by 405 points for December after ending November with a gain of 1734 points. October ended with a gain of 3184 points, after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 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 0.59% higher at a price of 4768.
The Dow Jones Industrial Average closed 261 points higher for a 0.68% gain at a price of 37,557.
The NASDAQ 100 closed 0.49% higher at a price of 16,811.
The Stoxx Europe 600 Index closed 0.36% higher.
This morning, the MSCI Asia Pacific closed 0.6% higher.
This morning, the Nikkei closed 1.37% higher at a price of 33,675.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% lower.
The Euro closed 0.6% higher at $1.0981.
The British Pound closed 0.4% higher at 1.2721.
The Japanese Yen fell 0.7% closing at $143.85.
Bonds
Germany’s 10-year yield closed 5 basis points lower at 2.03%.
Britain’s 10-year yield closed 1 basis points lower at 3.66%.
U.S.10 Year Treasury closed 2 basis points lower 3.92%.
Commodities
West Texas Intermediate crude closed 1.4% higher at $73.94 a barrel.
Gold closed 1.1% higher at $2043.10 an ounce.
This morning on the Economic Front we already had the release of German PPI which fell 0.5% versus -0.3% expected and the GFK Consumer Confidence which printed -25.1 versus -27.1 expected. Also, released was U.K. CPI which rose 3.9% versus +4.4% Y/Y expected. Next, we have Euro-Zone Current Account at 9.00 am and Construction Output at 10.00 am. This is followed by U.S. MBA Mortgage Applications at 12.00 pm. At 3.00 pm we have U.S. and Euro-Zone Confidence along with Existing Home Sales. Finally, at 6.00 pm we have a 20-year Treasury Auction.
Cash S&P 500
If the goal is to produce the most ridiculous rally in history the Fed have certainly now achieved their target. Yesterday, the S&P squeezed all-day which has been the theme for pretty much every trading session since October 27 when the S&P bottomed at 4100. The S&P now lives permanently above the Daily Bollinger Band. I spent a lot of time yesterday studying the S&P charts over the past seventy years. There is no precedence for this rally not even the biggest bubble rallies that we have seen so we are way past the point of credulity here. Against my better judgement reckless pays and has done in a big way for anyone who is long the S&P. Speaking of reckless this latest push in the S&P saw the 14 Day RSI close at 82 and at 87 for the Dow which is reminiscent of the prime printing days in 2020 following COVID which produced a quick sizeable correction into the lower Bollinger Band. Why? Because such a move is ridiculous. It was then and it is now. What is notable now is that this RSI print is coming with the S&P testing some key resistance levels. If bears have any money left this may be a good spot to go short again. However, traders keep buying ‘’CALLS’’ and this to will continue until something blows up. The S&P now has a record nine ‘’Open Gaps’’ which speaks of another never seen before historic imbalance. Nothing matters until it does. It is interesting that the last three day rally in the S&P has not produced a new low in the VIX. Yesterday, I was stopped out of my latest 4739 average short position at 4761 and I am now flat. Today, I will again be a seller of the S&P from 4770/4790 with a 4811 ‘’Closing Stop’’. If triggered, I will have no T/P level on this position. If this view changes, I will be back with a new update for my Platinum Members.
EUR/USD
Despite the strong Housing Starts Bond Yields fell which in turn drove the U.S. Dollar lower. I am still flat the Euro as the market never came close to yesterday’s buy range. I will now raise my buy level to 1.0810/1.0890 with a higher 1.0745 ‘’ Closing Stop’’.
Dollar Index
No Change. This morning the Dollar is trading lower at 102.25. I am still long from last Wednesday at an average rate of 102.80 with the same 101.95 ‘’Closing Stop’’. I will now lower my T/P level to 102.95. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
This morning the DAX hit my sell level at 16800 before selling off small. As I have enough ‘’short’’ exposure in the other Indexes, I have now exited this short position 16770 and I am now flat. I am going to stay flat the DAX over the Christmas break and if this view changes, I will be back with a new update for my Platinum Members.
Cash FTSE
The FTSE just missed my 7590 T/P level before rallying to my second sell level at 7700. I am now short at an average rate of 7665 with the same tight 7755 ‘’Closing Stop’’. I will now raise my T/P level to 7650. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
The Dow made another new all-time high as this relentless rally shows no sign of ending anytime soon which is frustrating given the fact that the RSI closed at a record 87 print last night. This move higher saw my second sell level at 37530 triggered for a now 37405 average short position. I will leave my 37705 ‘’Closing Stop’’ unchanged while raising my T/P level to 37270. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
The NDX rallied to my sell range and I am now short at a price of 16780. I will add to this position at 16930 while leaving my 17005 tight ‘’Closing Stop’’ unchanged. I will now raise my T/P level on this position to 16660. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
Lower Bund yields saw the Bund rally to my 137.50 sell level. I am still short, and I will continue to look to add to this position at 138.20 while leaving my 139.05 ‘’Closing Stop’’ unchanged. I will now raise my T/P level to 136.80. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold rallied hard yesterday and I am still flat. As I am still long Silver, I will not aggressively chase the price of Gold higher. Gold has short-term support from 2005/2020. I will raise my buy level to this area with a higher 1989 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I am still long Silver from two weeks ago at an average price of 24.40 with the same 25.05 T/P level. This morning, Silver is trading at 24.11. I will continue to have no stop on this position. In my opinion, Silver is one of the cheapest asset classes in Global Markets at this time.
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