U.S. Markets sold off aggressively into the close led by the NASDAQ which ended yesterday’s session with a loss of 2%. 10-Year Treasury Yields rising to 3.86% did not help. PPI was released rising 6% year over year versus +5.4% expected. The late equity sell-off saw the VIX close higher by over 10%. The Philly Fed Manufacturing Index for February showed a surprisingly sharp decline, contracting at its steepest pace in nearly three years. St Louis Fed President James Bullard said additional rate hikes are needed to lock in the current disinflationary trend. While inflation continues to fall from a year ago, data yesterday shows that progress is not linear, and it will take time for the economy to shed pricing pressures. Housing starts fell for a fifth straight month in January. However, multifamily units under construction continue to sit at near five-decade highs, as longer construction times have prolonged housing completions. Within the S&P 500 Index, all the 11 sectors finished lower. European Markets again closed higher. The ECB’s Economic Bulletin showed that the Governing Council will stay the course on rate hikes. It noted wages are surging and pricing pressures remain strong due to stubbornly high energy costs. ECB Governing Council member Gabriel Makhlouf said there is still a long way to go before it can achieve the 2% target inflation rate at a sustainable pace. ECB board member Fabio Panetta said the central bank should start raising its interest rates in smaller increments and avoid committing to future moves as inflation appears to have peaked. The European Bank for Reconstruction and Development warned that high inflation could linger longer than expected for Eastern and central Europe, according to its latest economic forecasts. In Asia, Chinese New Home Prices were unchanged in January. It marks the first time they had not contracted since August 2021, signalling the housing market may be stabilising. Australia’s Employment Figures unexpectedly contracted in January, marking the second straight month of losses, increasing pressure on the central bank to stop raising rates. Chinese state-run media outlet China Securities Journal said there is plenty of room for the central bank to lower the reserve requirement ratio for lenders, boosting the credit supply. Elsewhere, Oil fell 0.62% while Gold closed flat.
To mark my 2700th 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 420 points yesterday and is now ahead by 2714 points for February 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 1.38% lower at a price of 4090
The Dow Jones Industrial Average closed 431 points lower for a 1.26% loss at a price of 33,696.
The NASDAQ 100 closed 1.93% lower at a price of 12,442.
The Stoxx Europe 600 Index closed 0.25% higher.
Yesterday, the MSCI Asia Pacific rose 0.4%.
Yesterday, the Nikkei closed 0.71% higher at a price of 27,696.
Currencies
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.1% lower at $1.0673.
The British Pound closed 0.3% lower at 1.1986.
The Japanese Yen fell 0.1% closing at $133.94.
Bonds
Germany’s 10-year yield closed 1 basis points lower at 2.48%.
Britain’s 10-year yield closed 1 basis points lower at 3.50%.
U.S.10 Year Treasury closed 7 basis points higher at 3.86%.
Commodities
West Texas Intermediate crude closed 0.62% lower at $78.10 a barrel.
Gold closed 0.09% lower at $1838.10 an ounce.
This morning on the Economic Front we have German PPI and U.K. Retail Sales at 7.00 am. This is followed by Euro-Zone Current Account at 9.00 am. Finally, at 1.30 pm we have the U.S. Import Export Price Index.
Cash S&P 500
Following a dreadful PPI Report and the equally as horrific Philly Fed Report saw the S&P bought on the first aggressive move lower. The initial sell-off saw the whole of my S&P range filled for a 4102 average long position before the market rallied above 4130, enabling me to cover this position at my revised 4121 T/P level as emailed to my Platinum Members. Subsequently, the S&P sold off into the close, making new lows on the day. Bears will be happy as the Daily Reversal Candle saw the S&P close below the 5EMA and 8MA. If the S&P can break the 4080/4090 support area then we may well sell-off to my aggressive 4020/4035 buy range. The late sell-off has me long the S&P again at an average rate of 4086 as emailed to my Platinum Members. I will have a 4063 ‘’Closing Stop’’ on this position with a 4097 T/P level. Meanwhile, I will continue to be an aggressive buyer from 4020/4035 with no stop or T/P level for now. The U.S. Markets are closed on Monday for the Presidents’ Day Holiday so liquidity will be light today as most traders will be on a four-day weekend.
EUR/USD
The Euro just missed my 1.0725 T/P level with a 1.0722 high print before selling off on the higher-than-expected PPI. I will continue to add to my 1.0670 long position at 1.0600 while leaving my 1.0545 ‘’Closing Stop’’ unchanged. I will now lower my T/P level on this position to 1.0715.
March Dollar Index
The Dollar rose 0.4% yesterday and I am still flat as the market never came close to my buy range. I will now raise my buy level to 102.40/103.10 with a higher 101.85 ‘’Closing Stop’’.
Cash DAX
No Change. The DAX again closed higher yesterday, ignoring the American Indexes which continue to trade heavy. Despite the DAX being extremely overbought there is no point in trying to go short. For me to turn bearish I need the DAX to break and close below 15,000 for two consecutive trading sessions. Today, I will lower my buy level slightly to 15270/15350 with the same 15195 ‘’Closing Stop’’.
Cash FTSE
No Change. The FTSE made another new all-time high, closing again above 8000. I am still flat, reluctant to chase the market higher given how overbought we are at this time. Therefore, I will leave my 7870/7940 buy level unchanged with the same tight 7815 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
My Dow plan worked well as the market traded lower to my 33870 buy level before rallying over 150 points off this buy level. This move higher saw me thankfully exit this position at my revised 33960 T/P level and I am now flat. Subsequently, the Dow got slammed into the close, trading at 33650 as I go to press. The Dow has support from 33200/33450 where I will be a small buyer with a 32995 ‘’Closing Stop’’. Ahead of the long-weekend I do not want to be short the Dow.
Cash NASDAQ 100
The NDX had a wild trading session yesterday following the PPI release. The initial move lower had me long at 12550 before rallying to my 12630 T/P level and I am still flat. Subsequently, the NDX fell 200 points into the close for a 1.93% fall. This is not a surprise given the move higher in Treasury Yields. The NDX has plenty of room to fall as the next major support is not until 11925 which is where the 200-Day Moving Average comes in. The NDX has short-term support from 12000/12200 where I will be a strong buyer with a wider 11885 ‘’Closing Stop’’.
March BUND
No Change. I am still long from Wednesday at an average rate of 135.35 with the same 134.55 ‘’Closing Stop’’. Despite the higher-than-expected U.S. PPI, the Bund actually closed a few points higher. I will now lower my T/P level on this position to 135.75. If any of the above levels are hit, I will be back with a new update form my Platinum Members.
Gold Rolling Contract
Gold hit a post PPI low at 1827 before rallying back above 1840. I used this rally to exit Wednesday’s 1837 long position at my 1843 revised T/P level and I am now flat. Today I will again be a buyer on any dip lower to 1807/1822 with a lower 1795 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. Silver has traded sideways since we saw the market fall 3% last Thursday. I am still convinced that it is only a matter of time before Silver takes out the key 24.00/25.00 resistance area. Remember in May 2011, Silver was trading above $50. I am still long at an average rate of 23.10 with the same no stop policy. I will leave my T/P level unchanged at 23.50. If any of the above levels are hit I will be back with a new update for my Platinum Members.
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