U.S. Equity Markets finished the week in the ‘’Red’’ after the S&P and NASDAQ closed lower for the fourth consecutive trading session. A huge miss on payroll data accelerated the selling. Non-Farm Payroll additions for December came in at 199,000, well below the Wall Street estimate of 450,000. December’s increase was the lowest monthly gain since January 2020. Given that the Federal Reserve is tightening policy, the report sparked fear among investors that the Fed could be hiking rates into a slowing economy. Interest rates also remained in headlines today. Remember, the concern is that higher interest rates will mean higher borrowing costs and choke off the economic recovery. This is what led to the underperformance among tech stocks, as tech stocks are seen as the most vulnerable to higher interest rates. Within the S&P 500, seven of the 11 sectors finished lower. European Markets closed lower. Euro-Zone preliminary consumer price index (“CPI”) figures for December continued to rise, as higher energy costs remain the driving factor. Germany’s government was said to be ready to announce new restrictions on restaurants and cafes in order to slow the spread of the Omicron variant. German Industrial Production data for December was weaker than expected, likely signalling industries are still dealing with supply constraints. In Asia, Communications equipment giant Samsung Electronics said fourth-quarter operating profit likely rose 53% year over year, hitting the highest level in four years. Chinese local governments have begun endorsing 2022 growth targets of between 5% and 7%, in line with recent suggestions from officials in Beijing of 5% or more. Japan’s household spending data for November unexpectedly fell, declining versus October, as income gains have been in a steady decline since August. The People’s Bank of China drained almost $16 billion in funds from the financial system, bringing the two-day total to around $104 billion. Elsewhere, Oil closed 0.21% higher on little news to end the week, while Bitcoin fell 3%, continuing its recent sell-off.
To mark my 2450th 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 was flat on Friday and is still ahead by 73 points for January, after ending December with a loss of 932 points, having made 2466 points in November, 1028 points in October, 2866 points in September, 1543 points in August, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, having ended March with an impressive gain of 3769 points, 3286 points in February, 2077 points in January, and 2273 points last December. 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 0.41% lower at a price of 4677.
The Dow Jones Industrial Average closed 4 points lower for a 0.01% loss at a price of 36,232.
The NASDAQ 100 closed 1.10% lower at a price of 15,592.
The Stoxx Europe 600 Index closed 0.5% lower.
Last Friday, the MSCI Asia Pacific Index fell 0.2%.
Last Friday, the Nikkei closed 0.2% lower at a price of 28,478.
Currencies
The Bloomberg Dollar Spot Index closed 0.5% lower.
The Euro closed 0.6% higher at $1.1359.
The British Pound closed 0.4% higher at 1.3589.
The Japanese Yen rose 0.3%, closing at $115.54.
Bonds
Germany’s 10-year yield closed seven basis points higher at -0.06%.
Britain’s 10-year yield closed two basis points higher at 1.18%.
US 10 Year Treasury closed six basis points higher at 1.77%.
Commodities
West Texas Intermediate crude closed 0.21% higher at $79.55 a barrel.
Gold closed 0.28% higher at $1,797.10 an ounce.
This morning on the Economic Front we have Euro-Zone Sentix Investor Confidence at 9.30 am and the Unemployment Rate at 10.00am. The only U.S. data of note is Wholesale Inventories which will be released at 3.00 pm.
Cash S&P 500
Volatility continued on Friday as the S&P traded again in a 53 Handle Range which included plenty of two-way price action within this range. Unfortunately, my buy level of 4655 fell shy with an intra-day low of 4663 before the S&P rallied 30 Handles, only to give up a fair chunk of this rebound into the close. Consumer Credit was released late Friday at 8.00 pm. It was a gangbuster at $39.99bn versus $19.5bn expected. There is no shortage of demand for Credit as the previous month came in at $16.9bn. This number will be closely watched going forward. I will now lower my S&P buy level to 4634/4649 with a lower 4619 stop. I will also lower my sell level to 4710/4725 with a 4741 tight stop. If I am taken short I will have a T/P level at 4698. If I am taken long I will have a T/P level at 4663.
EUR/USD
The Euro rose 0.4% on Friday which was a surprise given the fact that 10-Year Treasuries are now trading at a yield of 1.77%. I am still flat the Euro and I will now raise my buy level to 1.1260/1.1310 with a higher 1.1195 stop. Meanwhile I will continue to be a small seller on any further rally to 1.1425/1.1475 with a higher 1.1521 stop.
March Dollar Index
The Dollar again fell 0.5% on Friday. This move lower saw my 95.70 buy level executed. I am still long with a now lower 95.95 T/P level. I will not add to this position, but I will raise my stop to 95.25. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Cash DAX
Friday was a frustrating session with the DAX missing my initial 15860 buy level by one points before rallying 70 points and I am still flat. The DAX has strong support from 15700/15800 and I will now lower my buy level to this area with a 15635 tight stop. If I am taken long I will have a T/P level at 15850. I no longer want to be shot the DAX at this time.
Cash FTSE
Despite both the American and European Markets closing lower, the FTSE actually closed Friday’s session in positive territory. The FTSE has resistance from 7530/7580 and I will move my sell level higher to this range with a tight 7605 stop. I will also raise my buy level to 7380/7430 with a 7345 stop.
Dow Rolling Contract
The Dow traded in a narrow range on Friday and this was reflected in the McClellan Oscillator which closed unchanged at +37. I will not chase the Dow higher preferring to leave my 35750/35950 aggressive buy level unchanged with the same 35595 stop. I still do not want to be short the Dow at this time. If I am taken long I will have a T/P level at 36160.
Cash NASDAQ 100
The NDX fell shy of my 15450 buy level by 70 points before rallying 150 points off its 15520 intra-day low print and I am still flat. Today, I will look to buy the market from 15300/15420 with the same 15195 stop. Given the recent 9% fall in the NDX, I do not want to be short the market at this time.
March BUND
No Change. I am still a small buyer on any further dip lower to 169.00/169.50 with a 168.55 lower stop. If I am taken long I will have a T/P level at 169.90.
Gold Rolling Contract
Gold again traded in a narrow range on Friday. I still do not trust this market As a result I will not chase the price of Gold higher, despite Gold rallying 0.3% , leaving my 1655/1770 buy level unchanged with the same 1743 stop.
Silver Rolling Contract
The low for Silver on Friday was 21.92, missing my buy level by 2 points before having a nice rally into the New York close. Today, I will continue to be a buyer from 21.30/21.90 with a 0.75 stop. If I am taken long I will have a T/P level at 22.35.
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