U.S. Equity Markets made modest gains on Friday, reversing an initial hawkish reaction to the hot NFP report with participants preparing for this week’s CPI and FOMC with a hesitation to miss out on the ‘Santa Rally’ too. The 199k jobs added in November exceeded the estimated 190k, whilst the Unemployment Rate also tumbled to 3.7% from 3.9%, despite rising participation, with mixed wage growth figures – doves point to the trend lower in the headline figures once you detract the returning UAW union workers. The figures saw rates bear-flatten with the aggressive Fed cut pricing in recent weeks seeing a notable unwind, with 110bps cuts priced across 2024 now vs 120bps beforehand, although the first rate cut priced remains for May. Note that the tumble in the University of Michigan Consumer Survey’s inflation expectations reported after the jobs data had little sustained effect on price action, especially given the headline sentiment index surged. The U.S. Dollar ultimately caught a bid, albeit flows were choppy, with the Yen pulling back from its recent peaks – note BoJ sources via Reuters saying recent consumption data is a concern for policymakers who are “eyeing” an exit from NIRP, whilst adding that Bank of Japan Governor Ueda did not intend to signal anything about the timing of a policy change. The oil benchmarks saw short-covering after confirming their seventh week of consecutive losses. Gold prices tumbled after the jobs data, testing beneath the USD 2,000/oz figure before having a small rally into the close. Elsewhere, Oil ended Friday with a gain of 2.73% following another volatile trading session.
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For anyone following my Platinum Service it made 247 points on Friday and is now ahead by 372 points for December after ending 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 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 0.41% higher at a price of 4604.
The Dow Jones Industrial Average closed 130 points higher for a 0.36% gain at a price of 36,247.
The NASDAQ 100 closed 0.39% higher at a price of 16,084.
The Stoxx Europe 600 Index closed 0.74% higher.
This morning, the MSCI Asia Pacific closed 0.6% higher.
This morning, the Nikkei closed 1.50% higher at a price of 32,791.
Currencies
The Bloomberg Dollar Spot Index closed 0.36% higher.
The Euro closed 0.2% lower at $1.0763.
The British Pound closed 0.1% lower at 1.2548.
The Japanese Yen fell rose 1.8% closing at $144.93.
Bonds
Germany’s 10-year yield closed 6 basis points higher at 2.26%.
Britain’s 10-year yield closed 5 basis points higher at 4.02%.
U.S.10 Year Treasury closed 11basis points higher 4.23%.
Commodities
West Texas Intermediate crude closed 2.73% higher at $71.23 a barrel.
Gold closed 1.1% lower at $2003.10 an ounce.
This morning on the Economic Front we have no data of note from either the U.K. or the Euro-Zone. The only economic news of significance in America, is a 10 Year Treasury Auction at 6.00 pm.
Cash S&P 500
A 5.5% fall in the VIX on Friday saw the S&P close at a new recovery high at 4604. The VIX closing at 12.35 was a new low for the year as the S&P remains bulletproof in this low volatility regime. Wednesday’s close below the 5 EMA at 4561 was quickly reversed. Any initial notion that the Fed would be hawkish on Wednesday at their upcoming Meeting following Friday’s stronger than expect NFP Report was rendered moot in seconds as the post NFP sell-off was immediately bought as the 5 EMA was again defended. Subsequently, the S&P hit the July highs following the University of Michigan lower than expected inflation data. The Friday VIX crush has been a theme all-year. However, I am still seeing a number of negative divergences at Friday’s highs, not least the internals as shown by the McClellan Oscillator which again closed weak on Friday. That said unless we see a breakdown then risk remains for a test of the February 2022 highs above 4720. The VIX is so compressed in the 12 Handle range that a break to the upside is inevitable in my opinion. My S&P plan worked well as the Market hit a high at 4590 on Thursday before selling off to a post NFP spike low at 4558. This move higher had me short at 4580 before hitting my revised 4569 T/P level and I am now flat. This morning, the S&P is trading at 4600. We have resistance from 4610/4626 where I will again be a seller with a 4641 ‘’Closing Stop’’. The S&P has support from 4547/4564 where I will be a small buyer with a tight 4539 ‘’Closing Stop’’.
EUR/USD
No Change. I am still long the Euro from Tuesday at an average rate of 1.0830 with the same 1.0875 T/P level. I will leave my 1.0735 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September Dollar Index
I am still flat the Dollar as the market traded in a narrow range over the past few days. This morning, the Dollar is trading higher at 104.15. We have strong resistance from 104.50/105.10 where I will be a seller with the same 105.65 ‘’Closing Stop’’. I will still be a buyer on any dip lower to 102.50/103.20 with the same 101.95 ‘’Closing Stop’’.
Cash DAX
Wrong! I have tried to pick a top in the DAX twice this month only to be stopped at the close. On Friday, I was stopped out of my latest 16580 average short position at 16725 and I am now flat. I just cannot justify a long position in the DAX given the vertical move higher since the end of October. Selling the market has been a costly exercise. For this reason, I am going to stay flat until I feel I have a better edge in the market.
Cash FTSE
On Friday morning the FTSE hit my initial 7555 sell level before selling off to my revised 7539 T/P level and I am still flat. This morning, the FTSE is trading unchanged at 7550. We have resistance from 7590/7660 where I will again be a seller with a higher 7715 ‘’Closing Stop’’. I still do not want to be long the FTSE at this time. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
My Dow plan worked well but again you had to be quick to take any profit. On Friday afternoon, the Dow hit my 36250-sell level before trading lower to my revised 36115 T/P level and I am now flat. The 14 Day RSI closed at 76 on Friday. The RSI has a reading over 70 for the past two weeks which is not normal. Given how over extended the Dow is, I will continue to be a seller of rallies. The Dow has further resistance from 36350/36600. I will be a strong seller in this area with a higher 36755 ‘’Closing Stop’’. I still do not want to be long the Dow at this time.
Cash NASDAQ 100
The NDX saw no follow through to the downside following Wednesday’s 200-point fall. Instead, the NDX found little time in regaining these lost points, trading at 16060 as I go to press this morning. I am still flat as I have no interest in being short the NDX. We have short-term support from 15800/15950. I will now raise my buy level to this area with a higher 15695 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 16090.
December BUND
My patience paid off as following the stronger than expected NFP Report, the Bund sold off to my 134.40 T/P level on last week’s 134.86 average short position and I am now flat. There is no doubt that Bond Yields have fallen too far. The Bund has resistance from 135.00/135.70 where I will again be a seller with a higher 136.31 ‘’Closing Stop’’.
Gold Rolling Contract
My Gold pan worked well but you had to be quick. After Gold hit my 2004 buy level we rallied to my revised 2012.50 T/P level before falling to hit an afternoon low at 1995. Subsequently, we had a small $9 rally into the New York close. Last week saw a massive reversal in the price of Gold from Monday’s 2151 spike. Gold has support below from 1965/1981 where I will be a small buyer with a 1953 ‘’Closing Stop’’. Despite Monday’s downside Key Day Reversal, I still do not want to be short Gold at this time.
Silver Rolling Contract
No Change. Silver ended last week with a 2% fall. I am still long at an average rate of 24.40 with the same 25.05 T/P level. Given how bullish I am on Silver, I will now cancel any stop on this position. If this view changes, I will be back with a new update for my Platinum Members.
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