U.S. Equity Markets closed lower on Friday despite a strong comeback in the last hour of trading. The NASDAQ 100 led the declines with a 0.43% fall following a volatile last trading session for 2023, which saw plenty of two-way price action. Despite the El Nino-related weather disturbances affecting key agricultural areas globally and the disruptions in the Black Sea stemming from the war in Ukraine, there is encouraging data suggesting further easing in food inflation in the new year. This development comes amid the soaring risks of food riots in emerging markets, as the weakening of EM currencies against the U.S Dollar has made staple foods increasingly more expensive for poorer populations worldwide. Bloomberg data shows corn and wheat prices have recorded their largest annual declines in a decade. This is primarily because of bumper crops in key agriculture regions and might lead to further easing of food inflation into the first half of 2024. Corn futures on the Chicago Board of Trade plunged 31% in 2023, and wheat contracts fell 21% – the largest annual declines since 2013. Soybeans were down 15%. This led the Bloomberg Grains Spot Subindex to slide 22.8%. This is good news for the United Nations Food and Agriculture Organisation World Food Price Index, which has already come off record highs. “The rout was driven by bumper crops in key crop suppliers Brazil, US and Russia following years of disruptions caused by extreme weather, the Covid-19 pandemic and Russia’s war in Ukraine that pushed prices to record highs in 2022,” Bloomberg wrote in a note, adding, “Lower prices for staple grains could bring down the cost of bread and make it less expensive to feed livestock, dairy herds and even biofuels. Analysts are anticipating even lower prices for corn and soybeans in 2024, while wheat is expected to rebound amid tighter supplies.” Elsewhere, Oil fell 0.17% while Gold ended Friday with a loss of 0.7%.
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 made 155 points on Friday, to finish December with a gain of 1890 points 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 0.28% lower at a price of 4769.
The Dow Jones Industrial Average closed 20 points lower for a 0.05% loss at a price of 37,689.
The NASDAQ 100 closed 0.43% lower at a price of 16,825.
The Stoxx Europe 600 Index closed 0.20% higher.
This morning, the MSCI Asia Pacific closed 1.1% higher.
Last Friday, the Nikkei closed 0.22% lower at a price of 33,464.
Currencies
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.5% lower at $1.1049.
The British Pound closed 0.4% lower at 1.2731.
The Japanese Yen rose 0.4% closing at $141.02.
Bonds
Germany’s 10-year yield closed 11 basis points higher at 2.01.
Britain’s 10-year yield closed 10 basis points higher at 3.54%.
U.S.10 Year Treasury closed 6 basis points higher 3.86%.
Commodities
West Texas Intermediate crude closed 0.17% lower at $71.65 a barrel.
Gold closed 0.7% lower at $2062.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone, U.K. and U.S Manufacturing PMI at 8.55 am, 9.00 am, 9.30 am and 2.45 pm respectively. Finally, we have Construction PMI at 3.00 pm.
Cash S&P 500
Frustratingly, the S&P twice missed my initial 4798 sell level by one handle before falling to a low on Friday at 4751. Subsequently, the S&P recovered 18 Handles into Friday’s 4769 closing print. I am still flat. As I said last Thursday, the S&P is now within touching distance of its all-time high at 4818 while both the Dow and NDX have made new all-time highs, Since the October 2022 low, the S&P is up 33% while the Technology stocks are higher by over 66%. This has been an incredible move higher resulting in the most overbought readings for the stock markets ever. It is funny that markets can stay overbought for weeks, yet one down day like we saw on Wednesday sees the 15-minute S&P chart oversold. Overall, I am still bullish the S&P but given how overbought we are, I would like to see a decent correction to the 14 Day EMA (4670) and the 30 EMA at 4574 before putting on a macro long-position. The main premise is that such a pullback following a 14-month markup then works off heavily overbought conditions to then offer a technical long entry opportunity. Nothing matters until it does. The Yield inversion is being ignored. This large inversion implies that a recession is coming in America and is one of the main reasons why the Dollar has fallen over 1.5% in the last week. History tells us that new highs can happen first before it all falls apart as occurred in 2007. RSI readings above 71 for the S&P and 77 for the Dow are not healthy and is one of the main reasons why I cannot justify a long position at current levels. The S&P has resistance from 4791/4811. I will now lower my sell level to this area. I will have a 4827 ‘’Closing Stop’’ on any short position that is executed. If I am taken short, I will have a T/P level at 4772 as we are still in the seasonally strong period for another week. I still do not want to be long the S&P at this time. If this view changes, I will be back with a new update for my Platinum Members.
EUR/USD
The Euro is trading 80 points lower from where I marked prices last Thursday. This should come as no surprise given the fact that the 14-Day RSI closed at 70 on Wednesday in New York. I will now lower my sell level to 1.1120/1.1200 with a now lower 1.1265 ‘’Closing Stop’’. The Euro has strong support from 1.0910/1.0990 where I will be a strong buyer with a tight 1.0855 ‘’Closing Stop’’.
Dollar Index
This morning the Dollar is trading higher at 101.47. We have strong support from 100.10/100.90 where I will be a strong buyer with a 99.55 ‘’Closing Stop’’. I still do not want to be short the Dollar at this time.
Cash DAX
The DAX has traded in a narrow 100-point range since before Christmas. I am still flat having decided to stay on the sidelines over the Christmas Holidays. This morning, the DAX is trading at 16840. We have support from 16570/16670 where I will be a buyer with a 16475 ‘’Closing Stop’’. Given the seasonality, I still do not want to be short the DAX at this time.
Cash FTSE
Just like the DAX above, the FTSE also traded in a narrow range over the Christmas Period. I am still flat. I will now lower my sell level to 7790/7860 with a lower 7935 ‘’Closing Stop’’. I do not like the price action in the FTSE as the market continues to underperform the rest of the major Indexes. For this reason, I do not want to be long the FTSE.
Dow Rolling Contract
With the 14-Day RSI again closing with a 77 print on Friday night, I cannot justify a long position at these elevated levels. Therefore, I will continue to be a seller of rallies. The Dow has further resistance from 37900/38150 where I will be a strong seller with a lower 38405 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 37690.
Cash NASDAQ 100
My latest 16885 average short position worked well as the market traded lower on Friday to my revised 16760 T/P level as emailed to my Platinum Members and I am still flat. The NDX has resistance from 16880/17130 where I will again be an aggressive seller with a wider 17255 ‘’Closing Stop’’. Given how overbought the NDX is trading, I do not want to be long the NDX at this time. If this view changes, I will be back with a new update for my Platinum Members.
December BUND
It took some patience but finally we saw the Bund fall over 100 points on Friday. This move lower saw my 137.55 T/P level triggered on my 137.85 average short position and I am now flat. The Bund has resistance from 137.70/138.50 where I will again be a seller with a higher 139.35 ‘’Closing Stop’’. I still do not want to be long the Bund at this time.
Gold Rolling Contract
Gold reversed some of Thursday’s gains by closing 0.7% lower on Friday. I am still flat. I will now lower my buy level to 2025/2040 with a lower 2009 ‘’Closing Stop’’.
Silver Rolling Contract
Despite Gold trading close to all-time highs, Silver continues to underperform. To put this weakness into context, Silver’s all time high occurred in May 2011 at a price of 51.10. 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 lower at 24.05. 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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