U.S. Equity Markets rose to new highs on more strong economic data, led by the NASDAQ 100 which reversed Wednesday’s decline, closing higher by 2.51%. Economic data was the big driver yesterday as Jobless Claims posted their fourth straight week of declines. ISM non-manufacturing data beat expectations on strong growth in new orders. Outside of economic data, the Democrat-controlled Senate sparked optimism over another stimulus package, with some on Wall Street putting the total size between $600 billion and $1 trillion, according to FactSet. Federal Reserve Bank of Philadelphia president Patrick Harker said he does not see the central bank tapering its bond purchases until next year, keeping borrowing costs low. European Markets closed higher for the fourth consecutive trading session. The European Union granted Moderna’s COVID-19 vaccine a conditional marketing authorisation, with plans for a region-wide rollout next week. Euro-Zone Consumer Price Index data for December were in line with expectations, rising versus November, and indicating regional economic activity is holding up despite lockdowns. German Manufacturing Order data for November were better than expected, with orders now 6% higher than pre-coronavirus levels, according to the country’s Economic Ministry. The French government said it was hastening its Coronavirus vaccination efforts by increasing the number of individuals eligible and boosting the distribution sites. Elsewhere, Bitcoin surged 8% on little news while Gold and Oil were mixed, both closing higher by 0.67% and 0.34% respectively.
To mark my 2225th 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 25 points yesterday and is now down by 14 points for January, having finished December with a gain of 2273 points, 2025 points in November, 2779 points in October, 3042 points in September, 2383 points in August, 3128 points in July, 2580 points in June, 2456 points in May, 4773 points in April, and an incredible 9264 points in March. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Equities
The S&P 500 closed 0.1.48% higher at a price of 3804.
The Dow Jones Industrial Average closed 211 points higher for a 0.69% gain at a price of 31041.
The NASDAQ 100 closed 2.51% higher at a price of 12939.
The Stoxx Europe 600 Index closed 0.7% higher.
The MSCI Asia Pacific Index rose 0.2%.
This morning the Nikkei closed 2.36% higher at a price of 28,139.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% higher.
The Euro closed 0.5% lower at $1.2265.
The British Pound closed 0.2% lower at $1.3575.
The Japanese Yen closed 0.6% lower at 103.91 per dollar.
Bonds
Germany’s 10-year yield closed two basis points higher at -0.51%.
Britain’s 10-year yield closed four basis points higher at 0.28%.
US 10 Year Treasury closed two basis points higher at 1.09%.
Commodities
West Texas Intermediate crude closed 0.67% higher at $49.94 a barrel.
Gold closed 0.34% higher at $1,909.20 an ounce.
This morning on the Economic Front we already had the release of German Industrial Production, which rose 0.9% versus +0.8% expected. At 10.00 am we have Euro-Zone Unemployment and this is followed at 1.30 pm by U.S Non-Farm Payrolls, including the Unemployment rate and Average Earnings. Finally, we have Wholesale Inventories at 3.00 pm and a speech from Fed Member Clarida at 4.00 pm.
March S&P 500
The parabolic move in the S&P continues as Global Central Banks continue to fuelling an Asset Bubble. Incredibly, where intentional or not, Federal Reserve Bank of Philadelphia President Patrick Harker said the Fed may begin paring back its Bond Buying Programme as soon as the end of this year. He said and I quote ‘’ It could cause disruption in the markets if we try to do it too soon’’. There it is, not a disruption to the economy but to the markets. For a central bank that claims to target the economy with its policies, this statement reveals a keen awareness that markets are greatly influenced by the Fed’s QE Liquidity Operations. The market disconnects from the economy are larger than ever and are about to exceed last year’s record 190% in Market Cap versus GDP making what happened in the year 2000 like child’s play. As a result we are seeing Asset Classes exploding vertically all over the place. Small Cap Stocks are now sporting forward multiples north of 80 after the Russell 2000 doubling in price since the March 2020 lows. Vertical moves do not end well and I do not know when the US Indices will crash but this is a dangerous game. I know markets can remain ‘’illogical longer than I remain solvent’’ with the Fed letting the loosest financial conditions in history resulting insatiable risk taking across the board. The S&P traded the whole of my sell range for a 3788 average short position. I am still short as we have now closed above 3805 as yet. I will now raise my T/P level to 3785 while leaving my 3805 ‘’Closing Stop’’ unchanged. I will now raise my buy level to 3737/3752 with a higher 3725 stop. The S&P needs to break and close below its short-term support at 3690 before a more meaningful correction takes place.
EUR/USD
I am still flat the Euro with the market having difficulty in breaking above 1.2350. I will now lower my sell level to 1.2330/1.2370 with a lower 1.2415 stop. Ahead of the NFP release at 1.30 pm I will now lower my buy level to 1.2120/1.2160 with a 1.2075 stop.
March Dollar Index
It took a while but finally my 89.95 T/P level on my latest 89.55 long was hit this morning and I am now flat. Today, I will again be an aggressive buyer of the Dollar from 89.30/89.80 with an 88.85 stop.
March DAX
My latest 13860 short DAX position was stopped this morning at 14005 and I am now flat. Even though I do not agree with the price of the DAX, I have to respect the price action. The DAX has support from 13880/13960 where I will be a small buyer with a tight 13815 stop.
March FTSE
Yesterday the FTSE gave back some of its enormous gains from Wednesday’s 5% rally. The FTSE has support from 6730/6770 where I will be a small buyer with a 6685 stop. If I am taken long I will have a T/P level at 6805.
Dow Rolling Contract
I am still flat the Dow as the market again gapped higher without ever coming close to my buy level. Sentiment and optimism are still at extreme levels. However, the Dow needs to break and close below 30400 before we can even see some sort of correction. I will now raise my buy level to 30720/30920 with a 30575 stop. Ahead of the weekend I will also raise my sell level slightly to 31450/31650 with the same 31725 tight stop.
March NASDAQ
I am still flat and I will now raise my buy level to 12860/12780 with a higher 12695 stop. I still do not want to be short the NASDAQ at this time.
March BUND
No Change. I am still a seller from 177.80/178.25 with the same 178.55 stop. Meanwhile, I will leave my 176.30/176.80 buy level unchanged with a 175.85 stop.
Gold Rolling Contract
My Gold plan worked well with the market trading the whole of my buy range for a 1876 average long position. Subsequently Gold rallied and I have now exited this long position for a small gain here at 1884 and I am now flat. Today, I will continue to be an aggressive buyer from 1856/1868 with a lower 1849 stop.
Silver Rolling Contract
This morning Silver has traded the whole of my buy range and I am now long at a price of 26.30. I will lower my T/P level on this position to 26.55 while leaving my 25.65 stop unchanged.
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