Markets closed higher on Friday following another dip that was aggressively bought in a trading session which had low volume. The NDX led the gains. Closing higher by 0.71% while the VIX fell a further 2.55% for a now 12-month low at a price of 18.35. Investors continued to digest last week’s positive momentum for slowing inflation, a slowdown in the Federal Reserve’s rate hikes, and a declining Dollar. Major U.S. banks provided a lacklustre start to earnings season on Friday, fuelling concerns that softer net interest income guidance and rising deposit rates could hamper yearly earnings. Fed speak remained largely hawkish, with officials remaining steadfast to a terminal rate above 5%, despite some calls for a slowdown to 25-basis-point rate hikes starting in February. Within the S&P 500 Index, eight of the 11 sectors finished higher. European Markets closed higher. Following a week of better-than-expected economic news in the region, support grew for more monetary-policy tightening from the European Central Bank. In Asia, Markets closed mixed. The Bank of Korea hiked its base rate by 25 basis points, raising its seven-day repo rate to 3.50%. China’s exports fell 9.9% in December – the fastest annual decline since February 2020. Elsewhere, Oil closed 1.70% higher while Gold rose 1.25%, closing above $1900.
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For anyone following my Platinum Service it made 162 points on Friday and is now ahead by 2320 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 0.40% higher at a price of 3999
The Dow Jones Industrial Average closed 112 points higher for a 0.33% gain at a price of 34,302.
The NASDAQ 100 closed 0.71% higher at a price of 11,541.
The Stoxx Europe 600 Index closed 0.52% higher.
This morning, the MSCI Asia Pacific fell 0.6%.
This morning, the Nikkei closed 1.14% lower at a price of 25,822.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% lower.
The Euro closed 0.1% lower at $1.0830.
The British Pound closed 0.3% higher at 1.2234.
The Japanese Yen fell 0.8% closing at $127.95.
Bonds
Germany’s 10-year yield closed 2 basis points higher at 2.14%.
Britain’s 10-year yield closed 4 basis points higher at 3.37%.
U.S.10 Year Treasury closed 4 basis points higher at 3.50%.
Commodities
West Texas Intermediate crude closed 1.70% higher at $79.77 a barrel.
Gold closed 1.25% higher at $1917.10 an ounce.
This morning on the economic front we already had the release of German Wholesale Price Index which fell 1.6% versus -0.9% expected. With the U.S. closed for the Martin Luther Holiday the only other data of note is the Bank of Canada Business Outlook Survey at 3.30 pm.
Cash S&P 500
Friday, saw similar price action to Thursday as the initial dip got bought as bears were again slammed after a further epic crash in the VIX to 12 month lows saw the S&P make a new recovery high above 4000. The VIX is now sitting close to an important trendline at 17.50. A break and close below here indicates a further melt-up in the S&P back to the post December CPI high above 4100. However if the VIX finds strong support at 17.50 then the VIX could rip higher leading to an aggressive sell-off in the S&P. This latter scenario is favoured by me at this stage given the fact that the McClellan Oscillator again closed at +300. This has been a great start to the year for my Members as buying the dip has worked well each trading session so far this year. Overnight the S&P just missed my 4008 sell level by 1 Handle before selling off to sit at 3994 this morning. Today, I will continue to be a seller on any further rally to 4010/4028 with a higher 4041 ‘’Closing Stop’’. My only interest in buying the S&P is on a further dip lower to 3935/3953 with a 3919 ‘’Closing Stop’’.
EUR/USD
No Change. I am still flat as the Euro took a rest from last week’s aggressive move higher. I will not chase the Euro higher, leaving my 1.0680/1.0750 buy level unchanged with the same 1.0615 ‘’Closing Stop’’.
March Dollar Index
I am still long from last Thursday at an average rate of 102.10. I will leave my 101.55 ‘’Closing Stop’’ unchanged while lowering my T/P level to 102.60. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
The DAX hit my initial 15150 sell level just before the New York close on Friday. As I want to bank some points for Friday’s commentary, I emailed my Platinum Members to exit any short position at 15118 and I am now flat. Given how overbought the DAX is trading I will continue to look to sell rallies. The DAX has resistance from 15210/15300 where I will again be a seller with a 15370 tight ‘’Closing Stop’’.
Cash FTSE
Just like the DAX there is no stopping the FTSE as the market closed over 7850 on Friday. The FTSE is now trading over 6% higher for the year despite the worsening economy and awful political situation. Thankfully we have had no sell levels in this market as short positions have been squeezed dramatically since the October low. I will now raise my buy level to 7700/7770 with a higher 7635 ‘’Closing Stop’’.
Dow Rolling Contract
Overnight, the Dow hit my sell level at 34360 before selling off to my 34270 revised T/P level and I am now flat. With the MO closing at +300 I have no interest in buying the Dow. We have further resistance from 34400/34650 where I will again be a seller with a 34805 ‘’Closing Stop’’.
Cash NASDAQ 100
Frustrating! The NDX missed my 11300-buy level by 20 points before rallying 220 points off its 11320 low print and I am still flat. We have had a nice start to the year by buying to dip across all the American Indexes but unfortunately these buy levels fell short on Friday and I am still flat. With the MO again closing at +300 I am reluctant to chase the NDX higher from here. As a result I will only raise my buy level slightly to 11260/11410 with a higher 11045 ‘’Closing Stop’’.
March BUND
No Change. I am still flat and will continue to be a buyer on any dip lower 136.20.136.90 with the same 135.45 ‘’Closing Stop’’
Gold Rolling Contract
Gold rallied ended last week on a high, helped by the falling Dollar. Commodities in general have surged as a result- take a look at the charts for both Copper and Steel with both rallying over 15% this month alone. We are now short-term overbought as a result. I am reluctant to chase the price of Gold, only moving my buy level slightly higher to 1970/1885 with a tight 1845 ‘’Closing Stop’’.
Silver Rolling Contract
Overnight, Silver hit my 24,40 T/P level on my latest 24.00 long position and I am now flat. There is no doubt that Silver is struggling to break above the key 24.00/25.50 strong resistance area despite the aggressive move higher in Gold over the past few weeks. I still believe that it is only a matter of time before Silver joins the party. Today, I will again be a buyer from 23.40/24.10 with no stop. If triggered, I will have a T/P level at 24.80.
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