U.S. Equity Markets bounced around to end the week, finishing the day mixed, as the NASDAQ 100 closed lower by 0.89% while the Dow closed at a new all-time high with a gain of 0.90%. Bond Yields returned as the main story. Treasury yields picked up once again, bringing back concerns of higher borrowing costs for high-growth and technology companies. This, along with the inflation debate, will be something to watch in the coming weeks and months. Aside from that, news was positive. President Joe Biden called on states to make COVID-19 vaccines available to all eligible individuals by May 1, a month sooner than his prior guidance. In terms of economic data, Consumer Sentiment jumped, boosted by optimism on both the current state of the economy and the near-term outlook. The rotation into “value” and away from tech continued, evident by Refinitiv data, which showed huge inflows for value funds and outflows for growth. European Markets closed lower despite positive news. The European Central Bank said it would “significantly increase” Sovereign Bond Purchases in the coming quarter to keep Interest Rates low and support economic growth. The European Union’s drugs regulator said the benefits of AstraZeneca’s COVID-19 vaccine still outweigh the risks, and it can still be administered despite the clotting investigation. Euro-Zone Industrial Production data for January were stronger than expected, rising versus December, signalling the regional economy is rebounding. European Union coronavirus vaccinations rose to 45.4 million through yesterday, with a daily average of 1.21 million doses administered over the last week. Late in the day, Germany also warned of a “third wave” of coronavirus cases. Elsewhere, Oil declined 0.61% while Gold closed flat on little news.
To mark my 2275th 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 185 points on Friday and is now ahead by 2043 points for March, having closed February with an impressive gain of 3286 points, having made 2077 points in January, 2273 points in December, 2025 points in November, 2779 points in October, 3042 points in September, 2383 points in August, 3128 points in July, 2580 points in June, 2456 points in May, 4773 points in April, and an incredible 9264 points in March. 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 0.1% higher at a price of 3943.
The Dow Jones Industrial Average closed 293 points higher for a 0.90% gain at a price of 32,778.
The NASDAQ 100 closed 0.89% lower at a price of 12,937.
The Stoxx Europe 600 Index closed 0.6% higher.
The MSCI Asia Pacific Index rose 0.2%.
This morning the Nikkei closed 0.17% higher at a price of 29,767.
Currencies
The Bloomberg Dollar Spot Index closed 0.1% lower.
The Euro closed 0.1% lower at $1.1948.
The British Pound closed 0.4% lower at $1.3918.
The Japanese Yen closed 0.1% lower at 109.02 per dollar.
Bonds
Germany’s 10-year yield closed one basis points higher at -0.30%.
Britain’s 10-year yield closed ten basis points higher at 0.83%.
US 10 Year Treasury closed eight basis points higher at 1.62%.
Commodities
West Texas Intermediate crude closed 0.61% lower at $63.09 a barrel.
Gold closed 0.02% higher at $1,726.80 an ounce.
This morning on the Economic Front we already had the release of German Wholesale Prices which rose 1.4% versus +2.1% expected. Today, we have no other data of note from either the UK or the Euro-Zone. At 12.30 pm we have U.S New York State Empire Manufacturing Index. Finally, at 7.00 pm we have Total Net TIC Flows.
March S&P 500
This is the last week for the trading the March Contract as it expires on Friday. I will now roll to the June Contracts tomorrow. America changed clocks over the weekend, resulting in U.S Markets opening and closing one hour earlier for the next two weeks. The S&P frustratingly missed my 3910 buy level with a 3910.25 low print before rallying to settle at 3944 on Friday in what turned out to be a low volume trading session. In my opinion we are very close to a meaningful top in the market and I am expecting this to happen in March which as we know from history has seen many reversals both up and down over the past 50 years. Most of the up move in U.S Indices has been on the back of the Fed intervening on the first sign of trouble as expressed with downside in markets. We have seen a cumulative injection of $24 trillion since 2007 by just four Central Banks with nearly $10 trillion in the past year alone. Indeed, the Fed has now doubled its balance sheet since the temporary and rather marginal effort to reduce it, came to a sudden end 19 months ago. The latest third installment of Stimulus Money sees Free Money to all of those people that do not really need it. Even people that never lost their jobs or loss in income get stimulus cheques not only for themselves but for their children as well at a time when Household Wealth has never been higher. Equity valuations are higher than ever, heading towards three Standard Deviations above the historic mean. Markets are approaching this week with not only the highest valuations and equity allocations in history but also with dramatic chart extensions the extent which we have never seen before especially Small Caps (Russell 2000). As a result of Central Banks are intervening at any sign of trouble and we are rapidly approaching the point of peak liquidity. This coming week will come at an interesting time: Can new highs be sustained with the help of an accommodative Fed, or will those highs fail as traders send Bond Yields higher. As I mentioned last week, the last time we saw technology suddenly correcting and seeing a weaker bounce for lower highs occurred precisely during that infamous March 21 years ago, leading to a 78% fall in the NASDAQ. I can’t wait for Fed Chairman Powell’s Press Conference on Wednesday. Overnight, the S&P traded higher to my 3955 sell level before trading lower to my 3943 T/P level and I am now flat. The S&P has resistance from 3959/3974 where I will be a small seller with a 3985 ‘’Closing Stop’’. I will now raise my buy level to 3902/3917 with a 3989 ‘’Closing Stop’’. I will continue to be an aggressive buyer on any further dip to 3838/3853 with the same 3825 ‘’Closing Stop’’.
EUR/USD
My Euro plan worked well with the market trading lower to my 1.1910 buy level before rallying to my 1.1945 T/P level and I am still flat. Today, I will again be a buyer from 1.1865/1.1905 with a 1.1826 stop. I still do not want to be short the Euro at this time.
June Dollar Index
I am still flat and I will now lower my sell level to 92.05/92.45 with a tight 92.71 stop.
March DAX
I am still flat and today, I will now raise my sell level to 14610/14680 with the same 14725 stop. I will also leave my 14280/14360 buy level unchanged with the same 14215 tight stop.
March FTSE
Thankfully we had no sell level in the FTSE on Friday as the market rallied over 100 points from where I marked prices and I am still flat. The FTSE has resistance from 6830/6880 where I will be a seller with a 6925 stop.
Dow Rolling Contract
On Friday, the Dow gapped higher at the ‘’Open’’ while the S&P and NASDAQ Composite gapped lower. The near-term movements in the main U.S Indexes remain highly fractured, which is often an indication of a trend which is late in development. Friday was the sixth consecutive trading session of contracting stock market volume, a rare event with 11.8 billion shares trading marking the slowest day of the entire year. Friday’s move higher saw the whole of my sell range traded for a now 32730 average short position. I will leave my stop unchanged at a ‘’Closing 32925 Stop’’. I will now raise my T/P level to 32680 and if any of the above levels are filled I will be back with a new update for my Platinum Members.
March NASDAQ
The NASDAQ fell short of my 13010 sell level by five points overnight and I am still flat. As I am now short the Dow I will raise my NASDAQ sell level to 13050/13150 with a higher 13225 ‘’Closing Stop’’.
June BUND
No Change. I am still a buyer on any dip lower to 170.30/170.80 with the same 169.85 stop.
Gold Rolling Contract
Gold traded sideways on Friday and I am still flat. I will now raise my buy level to 1682/1697 with a higher 1669 stop.
Silver Rolling Contract
Silver rallied to my 25.90 T/P level on my latest 25.60 long position and I am still flat. Today, I will again be a buyer on any dip lower to 24.70/25.40 with a tight 23.95 stop.
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