U.S. Equity Markets closed at new highs for the year after another volatile session. The NDX led the gains, closing higher by 2% helping the VIX to get crushed. Fourth Quarter GDP data showed economic growth eased compared with the third quarter of 2022, while Jobless Claims for the week ending January 21 were stronger than anticipated but held steady with the week prior. Home Sales for December rose to their highest level since August. This is a sign that the recent drop in 30-year mortgage rates is spurring demand. Slowing economic growth is important for the bond and stock markets’ outlook from a Federal Reserve policy perspective. As much as quarterly expansion eased, the same metric for all of 2022 came in below 2021 and the longer-term trend. That takes the pressure off the Fed to keep raising interest rates. The Quarterly inflation data was also released by the BEA. Its GDP Price Index saw its lowest gain since the fourth quarter of 2020. Core personal consumption expenditures (“PCE”) slowed to its lowest rate of expansion since the first quarter of 2021. Computer-Hardware manufacturer Seagate Technology (STX) reported better-than-expected fourth-quarter earnings and sales while guiding first-quarter revenue higher. Analysts said most of the bad news about customer demand is in the rearview mirror… a cyclical recovery is in the early stages. Within the S&P 500 Index, 10 of the 11 sectors finished higher. European Markets closed higher. European shares rose on the heels of Wednesday’s recovery in the U.S. Investors continue to view that the Euro Stoxx 50 Index’s 12.6 times forward 12 months price-to-earnings multiple and 2.7% dividend yield offers more upside potential than the S&P 500’s similar metrics at 18 times and 1.6%. Technology stocks gained following positive commentary from brokerage firm Morgan Stanley (MS) on the semiconductor sector. The company believes demand should recover in the back half of 2023 as excess inventories are worked off. Automotive and industrial semiconductor manufacturer STMicroelectronics (STM) reported fourth-quarter revenue that was in line with analysts’ expectations. The company also said it expects sales to grow 4% to 11% this year compared with the expectation for a 1% gain. Management cited resilient automobile demand for this increase. In Asia, stocks rallied as Hong Kong’s Hang Seng Index reopened from the Lunar New Year holiday break. Early reports from Bloomberg and Reuters indicate Chinese travellers are spending liberally as more people visit popular destinations like Macau and Hong Kong. Recent People’s Bank of China figures show the amount of deposits at banks is roughly $6.6 trillion greater than loans. The figure is up 11.3% compared with a year ago and the gap is the largest on record. That is a sign there is a lot of pent-up demand from consumers who had been locked down for three years until the recent removal of strict COVID-19 measures. The Bank of Japan’s Minutes showed policymakers are sceptical about whether recent inflation growth is sustainable without rising wages. Elsewhere, Oil closed 1.17% higher while Gold fell 0.88% after a late rally in the Dollar.
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 713 points yesterday and is now ahead by 3426 points for January, after 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 1.10% higher at a price of 4060
The Dow Jones Industrial Average closed 205 points higher for a 0.61% gain at a price of 33,949.
The NASDAQ 100 closed 2% higher at a price of 12,051.
The Stoxx Europe 600 Index closed 0.42% higher.
This morning, the MSCI Asia Pacific rose 0.4%.
This morning, the Nikkei closed o.07% higher at a price of 27,382.
Currencies
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.3% lower at $1.0865.
The British Pound closed 0.3% lower at 1.2367.
The Japanese Yen rose 0.1% closing at $130.15.
Bonds
Germany’s 10-year yield closed 2 basis points higher at 2.22%.
Britain’s 10-year yield closed 2 basis points higher at 3.33%.
U.S.10 Year Treasury closed 3 basis points higher at 3.53%.
Commodities
West Texas Intermediate crude closed 1.19% higher at $81.39 a barrel.
Gold closed 0.88% lower at $1923.10 an ounce.
This morning on the economic front we have no data of note from either the U.K. or the Euro-Zone. At 1.30 pm we have U.S. Personal Income/Spending and the PCE Indicator. Finally, at 3.00 pm we have Pending Home Sales and the University of Michigan Consumer Sentiment Index.
Cash S&P 500
My Dow plan has worked well over the past 48 hours. The S&P traded the whole of my buy range for a 3874 average long position before rallying to my revised 3888 T/P level. Yesterday, the S&P rallied to my revised 3952 sell level before selling off to my 3936 T/P level and I am now flat. For Premium Members the rally into the Chicago close saw the S&P hit my original 3960 sell level before selling off overnight to my 3943 T/P level. The 4200 T/P level for the S&P that I mentioned a few times this month is now only 3.7% above last night’s close. If the S&P were to hit this level I do not think the Fed will be happy as the market has totally ignored any bearish comments from Fed Members all-month making next week’s FOMC Statement important for February’s trading. Given the background I will continue to look to get short especially if we can break above 4100 ahead of Wednesday. Today, my sell level will be from 4090/4105 with a higher 4121 ‘’Closing Stop’’. The S&P has support from 4005/4020 where I will be an aggressive buyer with a 3989 ‘’Closing Stop’’.
EUR/USD
Although the Euro managed to make a new high for the week at 1.0950 yesterday’s 80 point reversal is another warning that the Euro is finding strong resistance above 1.09. I am still flat. I will not chase the Euro higher, continuing to be a buyer on any lower to 1.0710/1.0780 with a the same 1.0645 ‘’Closing Stop’’.
March Dollar Index
No Change. I am still long at an average rate of 102.10 with the same 101.35 ‘’Closing Stop’’. I will leave my T/P level unchanged at 102.45. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
I am still flat the DAX as the market again missed my buy level on Wednesday. . Although the American Indexes surged since Friday the DAX is struggling to make much headway. The DAX has support from 14880/14960. I will now raise my buy level to this area with a higher 14795 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 15030. I still do not want to be short the DAX at this time.
Cash FTSE
My FTSE plan worked well as the market sold off to my 7720 buy level before rallying to my 7765 revised T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 7650/7720 with the same 7595 ‘’Closing Stop’’.
Dow Rolling Contract
My Dow plan worked very well as Wednesday’s aggressive sell-off saw the Dow hit my 33300 buy level before rallying to my 33570 T/P level and I am now flat. Last night the Dow closed higher at 33950 as yet again anyone trying to see this market is crushed. The challenge next week is the Fed Meeting. With the $NYSI and $NYMO maximum overbought I will now look to get a short position on, hopefully from higher levels ahead of the Meeting. These two technical signals have worked well over the past 12 months. Internally the market is struggling to rally as shown by the McClellan Oscillator which closed unchanged from Wednesday at +165 last night. The Dow has resistance from 34100/34350 where I will be a seller with a 34525 ‘’Closing Stop’’. The Dow has support from 33350/33600 where I will be an aggressive buyer with a 33195 tight ‘’Closing Stop’’.
Cash NASDAQ 100
The strategy of buying all dips in the NDX this year following the aggressive tax based selling in December continues to pay nice dividends. On Wednesday, the NDX traded the whole of my buy range for a 11625 average long position before rallying to my revised 11700 T/P level as emailed to my Platinum Members and I am now flat. Last night’s late rally saw the NDX close above 12000. Even though the NDX has rallied 1500 points this month, I will continue to be a buyer of dips unless we close below 11500. Today, my buy level will be from 11700/11850 with a wider 11495 ‘’Closing Stop’’.
March BUND
No Change. I am still flat the Bund as the market again found resistance above 139.50. Today, I will continue to be a small buyer from 136.50/137.20 with the same 135.75 ‘’Closing Stop’’.
Gold Rolling Contract
No Change. Gold continues to outperform Silver and I am still flat. Gold continues to find strong resistance above 1940. I will not chase the market higher leaving my 1890/1905 buy level unchanged with the same 1879 ‘’Closing Stop’’.
Silver Rolling Contract
Silver rallied to my revised 23.63 T/P level on my latest 23.40 long position and I am now flat. Silver continues to find strong resistance above $24. Today, I will again be a buyer from 22.70/23.30 with the same no stop policy. If triggered, I will have a T/P level at 23.90.
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