Following a volatile trading session, U.S. equity markets ended the week in positive territory after a late rally into the close with the S&P now trading within 0.5% of its all-time high. The NDX led Friday’s gains closing higher by 1.13%. CPI was the big data release of the day. On a year-over-year basis, CPI jumped 6.8% in November. The last time the annualised CPI number was this high was back in June of 1982 at 7.1%. Still, the reading of 6.8% was below Wall Street’s unofficial estimate (the “whisper” number) of 7%. That is why we saw markets move higher on Friday despite the high inflation print. In other economic data, University of Michigan Consumer Sentiment rebounded in December’s first reading, and beat estimates. Now, all eyes turn to this week’s Federal Reserve meeting, where the central bank is expected to announce an accelerated tapering of asset purchases. Within the S&P 500 Index, all 11 sectors finished higher. European Markets closed mixed. The German Federal Statistics Office’s final Consumer Price Index (“CPI”) figures for November were in line with expectations, as energy costs continue to be the underlying driver of annualised gains. German Chancellor Olaf Scholz is reportedly planning to suspend the country’s debt limit for 2022, allowing it to borrow in order to fund economic growth. The European Central Bank was said to consider lengthening the time frame for reinvesting the proceeds of maturing bonds under the pandemic purchase programme, to support the economy. In Asia, The People’s Bank of China said it would increase the foreign exchange reserve requirement for banks from 7% to 9%, in an attempt to weaken the Yuan and support growth. The Bank of Japan’s Producer Price Index (“PPI”) figures for November exceeded expectations, driven by a rise in energy prices. China’s new Yuan loan growth data for November was weaker than anticipated, but rose roughly 50% versus October’s level, implying an improvement in financial system liquidity. South Korea’s government brought forward the timing for COVID-19 booster shots from six months to three months, in an attempt to stem rising infections. Elsewhere, Oil rose 1.41% as it continued its recent rebound, while Gold closed 0.37% higher.
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For anyone following my Platinum Service it lost 381 points on Friday, and is now down by 681 points for December, 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 0.95% higher at a price of 4712.
The Dow Jones Industrial Average closed 216 points higher for a 0.60% gain at a price of 35,970.
The NASDAQ 100 closed 1.13% higher at a price of 16,331.
The Stoxx Europe 600 Index closed 0.3% lower.
This morning, the MSCI Asia Pacific Index rose 0.4%.
This morning, the Nikkei closed 0.71% higher at a price of 28,640.
Currencies
The Bloomberg Dollar Spot Index closed 0.1% higher.
The Euro closed 0.1% lower at $1.1289.
The British Pound closed 0.1% higher at 1.3235.
The Japanese Yen rose 0.1%, closing at $113.42.
Bonds
Germany’s 10-year yield closed one basis points lower at -0.35%.
Britain’s 10-year yield closed three basis points lower at 0.74%.
US 10 Year Treasury closed three basis points lower at 1.49%.
Commodities
West Texas Intermediate crude closed 1.41% higher at $72.22 a barrel.
Gold closed 0.35% higher at $1,781.20 an ounce.
This morning on the Economic Front we already had the release of German Wholesale Price Index which rose 1.3% versus +1.6% expected. We have no other data of note on either side of the Atlantic as we wait for Wednesday’s FOMC Statement and Powell press conference.
December S&P 500
A late rally saw the S&P closed trade higher to my initial 4708 sell level. I am still short and I will continue to look to add to this position at 4733 with the same wider 4751 Stop. Breadth was negative on Friday due to the Small Cap Russell Index closing lower by 0.36% while the McClellan Oscillator continues to print negative closing at -32 on Friday. This should not be happening with the S&P trading 0.5% from all-time highs. The S&P has strong support from 4685/4701 and I will now raise my buy level to this area with a 4673 Stop. On my 4708 short-position, I will now raise my T/P level to 4703. If I am taken long I will have a T/P level at 4713.
EUR/USD
No Change. I am still a buyer on any dip lower to 1.1190/1.1240 with a 1.1145 stop. The Euro has resistance from 1.1380/1.1430 where I will be a small seller with the same 1.1471 stop.
March Dollar Index
I am still short the Dollar from last week at 96.25 sell level with the same 96.81 stop. I will now raise my T/P level on this position to 95.95.
December DAX
The DAX saw some more profit taking on Friday As the market continues to struggle near all-time highs. This morning the DAX is opening higher at 15630 and I am still flat. I will now raise my buy level to 15410/15490 with a tight 15345 stop. If I am taken long I will have a T/P level at 15545.
December FTSE
The FTSE continues to trade in a narrow range and I am still flat. I will not chase the market higher, leaving my 7185/7235 buy level unchanged with the same 7128 stop. If I am taken long I will have a T/P level at 7270.
Dow Rolling Contract
After the CPI print the Dow sold off to an afternoon low below 35700, missing my T/P level before turning around and rallying over 250 points into the close. I have never had a losing month on my Platinum Service since I started writing my Daily Commentary in February 2013, but this month is proving a challenge to keep that record going. Friday’s late vertical rally saw my 35600 latest Dow position stopped at 35981 and I am now flat. We are now approaching the timeframe for the Santa rally making it even more difficult for the Bears to get anything going on the downside. The Dow has support from 357000/35880 and I will be a small buyer in this area with a 35595 Stop. I do not want to be short the Dow at this time.
December NASDAQ
I am still flat the NDX. The NDX traded weak on Friday before a late rally saw the market end Friday’s session with a 1.13% gain. The NASDAQ just missed my initial 16020 buy level much to my frustration before rallying to sit higher at 16360 this morning. The NDX has resistance from 16440/16520 where I will be a small seller with a 16605 tight stop. I will now raise my buy level to 16180/16260 with a higher 16055 wider stop.
March BUND
I am still flat the Bund as the market never came close to Friday’s sell range. I will now lower my sell level to 174.45/174.95 with a 175.25 stop.
Gold Rolling Contract
The boring sideways price action in Gold continues. With a lot of traders still trapped long $100 above current prices I will not chase Gold higher, leaving my 1739/1754 buy level unchanged with the same 1725 stop. If I am taken long I will have a T/P level at 1762.
Silver Rolling Contract
No Change. I am still an aggressive buyer on any dip lower to 20.95/21.55 with a 19.95 higher stop.
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