U.S. Equity Markets closed positive on Wednesday but finished well off their intra-day highs with some chunky selling seen in the New York afternoon. Fed Chair Powell gave familiar rhetoric in Congress, expressing caution on cutting rates too early, whilst also saying he still thinks it is likely Interest Rates will be cut this year and we are at the peak Fed rate. NYCB announced in the NY afternoon it had received a capital raise of USD 1billion from former Treasury Sec. Mnuchin’s fund, providing support to the stock and broader regional banks after earlier weakness on the reports it was seeing capital, but that failed to prevent the major Indices paring their earlier strength. Treasuries rallied after the soft-leaning ADP employment and JOLTS job openings figures were followed by haven demand on the initial media reports that NYCB was seeking a capital raise, although some of the gains were pared into the close amid the bank confirming the USD 1bilion raised. The Dollar was sold amid the soft data with attention on Friday’s NFP in focus. Within stocks, big tech remained an area of underperformance, although other areas of tech prospered, including software after CrowdStrike (CRWD) surged post-earnings. China stocks prospered after the strong JD earnings report. Bitcoin bounced back higher, albeit it has not yet managed to breach past Tuesday’s All-Time-Highs at c. USD 69.2k, while spot gold managed to make a new peak above USD 2,150/oz. Oil prices rallied amid the soft Dollar and bullish EIA energy inventory data. Fed Chair Powell gave a typically cautious/hawkish set of prepared remarks as he testified in the House, in fitting with recent Fed Speak. He said that the Fed does not expect it will be appropriate to reduce the policy rate until they have greater confidence in inflation moving sustainably towards 2%. He also repeated it is likely to be appropriate to begin dialling back policy restraint at some point this year, and that the policy rate is likely at the peak for this cycle. He also repeated that there are risks to both cutting rates too early and too fast, as well as too little or too late, but risks to achieving the Fed’s dual goals are moving into better balance. Powell stressed that rate cuts will depend on the path of the economy and data will determine when cuts commence. On inflation, he repeated the Fed is not looking for inflation to go all the way down to 2%, but it does need to see more evidence, and that means some good inflation readings. He explained that the Fed is not looking for better inflation readings than what has already been, but for more of what has been seen. Powell said that if the economy evolves as the Fed hopes, rates will need to come down significantly over the coming years (we get a fresh set of Fed forecasts at the March 20th FOMC). A lot of the Fed Chair’s remarks were repeats, showing that little has changed his view since the January FOMC and slew of hot economic prints, but he is yet to commit to when the first-rate cut will likely occur, with Money Markets not fully pricing in a 25bp cut until July, with June at an 80% implied probability. Meanwhile, the Bank of Canada left rates unchanged as expected at 5.00%. It largely reiterated its guidance too, disappointing those looking for clues on when the BoC will cut rates. The statement repeated the Council is still concerned about the risks to the outlook for inflation, particularly the persistence in underlying inflation. It also repeated it wants to see “further and sustained easing in core inflation and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour”. Elsewhere, Oil closed 1.25% higher following a trading session that saw plenty of two-way price action, while Gold closed higher for the sixth consecutive session with a 0.9% gain.
To mark my 2950th 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 25 points yesterday and is now ahead by 692 points for March. February closed with a gain of 1606 points, after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing 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 0.51% higher at a price of 5104.
The Dow Jones Industrial Average closed 75 points higher for a 0.20% gain at a price of 38,661.
The NASDAQ 100 closed 0.67% higher at a price of 18,017.
The Stoxx Europe 600 Index closed 0.39% higher.
Yesterday, the MSCI Asia Pacific closed 0.6% higher.
Yesterday, the Nikkei closed 0.03% lower at a price of 40,090.
Currencies
The Bloomberg Dollar Spot Index closed 0.40% lower.
The Euro closed 0.3% higher at $1.0895.
The British Pound closed 0.2% higher at 1.2732.
The Japanese Yen rose 0.3% closing at $149.43.
Bonds
Germany’s 10-year yield closed 1 basis points higher at 2.33%.
Britain’s 10-year yield closed 3 basis points lower at 4.08%.
U.S.10 Year Treasury closed 3 basis points lower at 4.11%.
Commodities
West Texas Intermediate crude closed 1.25% higher at $79.19 a barrel.
Gold closed 0.9% higher at $2148.10 an ounce.
This morning on the Economic Front we have German Factory Orders at 7.00 am. This is followed by the ECB Rate Announcement at 1.15 pm and the Lagarde Press Conference at 1.45 pm. In between, we have U.S. Weekly Jobless Claims, Non-Farm Productivity and the Trade Balance at 1.30 pm. Finally, we have Fed Chairman Powell’s second day of Testimony before Congress at 3.00 pm, followed by a speech from Fed Member Mester at 4.30 pm. Please remember tomorrow, we have Euro-Zone GDP at 10.00 am and U.S. Non-Farm Payrolls at 1.30 pm.
Cash S&P 500
With Gold making new all-time highs after six consecutive’’ updays’’ implying that inflation is not coming down and is about to start to move higher, it goes against Fed Chair Powell’s comments that Inflation is stabilising. Having been in Florida for the past seven weeks, I can tell you that from what I see, inflation is not falling. However, it is so hard to be short. Since 1927, the S&P has spent 83% of the time at or within 10% of its all-time highs. What is more, Markets have put in 1300 new highs over the past century, around one per month. This tells me that investing in optimism beats cowering in fear every time, over time. This is one of the main reasons why I am rarely short the S&P, preferring to use extended RSIs as a barometer to initiate a short position. But you have to be quick as any profit in short positions will evaporate quickly. We are still in the seasonally weak period of March which probably accounts for the late sell-off in American Indexes from their afternoon highs. The S&P has resistance from 5130/5146 where I will again be a seller with a 5161 ‘’Closing Stop’’. The S&P has support from 5040/5056 where I will continue to be a small buyer with a 5027 tight ‘’Closing Stop’’. There is every chance that a larger sell-off in the S&P could see the 4900 major support level tested over the coming days. If such a sell-off were to happen I would be a large buyer as I am guessing a move of this magnitude would see the VIX hit my 21-target level.
EUR/USD
I am bullish the Euro, as the price action continues to see buyers on any Euro weakness. I would not be surprised to see the Euro move back to the 1.1200 resistance area over the coming weeks. I am still flat, and I will now raise my buy level to 1.0780/1.0850 with a higher 1.0825 ‘’Closing Stop’’.
Dollar Index
The Dollar had its biggest move in three weeks-falling 45 points. The volatility for the Dollar is at its lowest level in many years, making it difficult to make points. This morning, the Dollar is trading at 103.40. I will now lower my sell level to 103.90/104.50 with a lower 105.05 T/P level. If I am taken short, I will have a T/P level at 103.55. I still do not want to be long the Dollar at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash DAX
No Change. Just like the FTSE above, Tuesday’s NDX sell-off did not have any major negative effect on the DAX. I have no edge in the DAX at this time. The RSI is fried to the upside. I just cannot justify a long position here while I still have no interest in been short, as I prefer to sell the American Indexes. If this view changes I will be back with a new update for my Platinum Members.
Cash FTSE
The FTSE continues to trade sideways with a bullish bias. It would not surprise me if the FTSE breaks out to the upside over the coming weeks. I certainly have no interest in shorting the FTSE at this time. Today, I will continue to be a buyer on any dip lower to 7550/7620 with the same 7495 ‘’Closing Stop’’. If I am taken long, I will have no T/P level for now. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
The Dow traded in a wide range yesterday, hitting an afternoon high at 38850 before falling over 250 points. Unfortunately, I covered my 38640 average long position at 38665 and I am still flat. The reason I covered this position too early was when I looked at the Quarterly Dow Chart it shows the Dow hitting an historic trendline on a massive negative divergence. It is a similar situation with the NASDAQ. The Dow has resistance from 38840/35100 where I will be a small seller with a 35205 tight ‘’Closing Stop’’. Ahead of Powell this afternoon and Non-Farm Payrolls tomorrow, I do not want to be long the Dow at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
I am still flat the NDX as the market never came close to yesterday’s buy range by surging on Powell’s hint that we may see a rate cut this year. With Apple falling a further 0.5% yesterday I just cannot be short the NDX at this time. I have never seen Apple this far outside the bottom of its Daily Bollinger Band and an RSI at 22 to boot. With buybacks coming back in April, there is no point in chasing the NDX lower. History tells us that when Apple has such a low RSI reading, the NDX is close to a major low. Remember Apple is still one of the most important stocks in the market. Today, I will raise my NDX buy level to 17710/17860 with a higher 17595 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 17990.
March BUND
Frustratingly, the Bund missed yesterday’s buy range by six points before rallying 50 points and I am still flat. Ahead of the weekend, I will now lower my Bund my buy level to 131.70/132.40 with a lower 130.95 ‘’Closing Stop’’. I still do not want to be short the Bund at this time.
Gold Rolling Contract
I am still flat Gold as the market made a new all-time high at 2150 before having a small fall into the New York close. I will now raise my Gold buy level to 2103/2118 with a higher 2089 ‘’Closing Stop’’.
Silver Rolling Contract
No Change: I have said a number of times this year that ‘’Patience’’ is required in order to make sustained points in 2024. I am glad that I have stuck to the long side in Silver, despite e been offside on my latest 24.24 average long position for the past month. Thankfully, Silver rallied 2% yesterday and is now trading just below my entry point at 24.27 this morning. I will now have a T/P level on this position at 25.10. I will continue to hold this position with no stop. If this view changes, I will be back with a new update for my Platinum Members.
Recent Comments