U.S Equities extended last week’s relentless push to all-time highs as positive U.S. and China economic data, low interest rates and easing trade tensions propelled investor optimism. The US Dollar strengthened and Gold climbed. The benchmark S&P 500 Index, along with the tech heavy Nasdaq Composite, set record highs for an eighth consecutive trading session. Boeing Co. slumped after a Fitch downgrade, weighing on the Dow Jones Industrial Average. The Stoxx Europe 600 Index closed at a record, posting its biggest gain since mid-December. The longest-dated Treasuries dipped after the U.S. announced plans for a new 20-year bond. The dollar increased against its major peers including the Euro and Pound, with the latter reversing gains while gilts turned higher after U.K. retail sales data disappointed. Investors in risk assets headed into the weekend looking confident after the completion of an initial Sino-American trade deal and solid results from the biggest banks on Wall Street. U.S. markets are closed Monday for the Martin Luther King Jr. holiday. The earnings season continues to ramp up next week with Procter & Gamble Co. and Intel Corp. reporting, but for now most economic data is supporting sentiment: China GDP was in line with estimates, while Housing Starts surged in the U.S. Elsewhere, oil slumped for a second week as optimism following the signing of the America-China trade agreement offset signs that supplies remain plentiful. Emerging-market equities also climbed for a seventh week of gains.
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For anyone following my Platinum Service it made 97 points on Friday and now ahead by 1361 points for January, having made 818 points in December, 780 points in November, 1649 points in October, 1620 points in September, 2387 points in August, 1153 points in July, 1346 points in June,1722 points in May, 955 points in April and 1027 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 Index increased 048% to close at 3329, the highest on record.
The Dow Jones Industrial Average gained 0.2% to close at yet another record high at 29.347, with its fifth consecutive advance.
The NASDAQ Composite climbed 0.3% to 9389, the highest on record.
The Stoxx Europe 600 Index climbed 1.0% to close at 425, the highest on record with its biggest advance in more than a month.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index advanced 0.2%.
The British Pound dipped 0.5% to $1.3014.
The Euro fell 0.4% to $1.1093, the weakest in more than three weeks on the largest drop in more than a week.
The Japanese Yen was little changed at 110.15 per dollar.
Bonds
The yield on 10-year Treasuries advanced two basis points to 1.83%.
Britain’s 10-year yield fell one basis points to 0.63%, the lowest in more than eleven weeks, on its sixth straight decline.
Germany’s 10-year yield closed unchanged at -0.22%.
Commodities
West Texas Intermediate crude advanced 0.3% to $58.70 a barrel.
Gold rose weakened 0.3% at $1,557 an ounce, the highest in more than week.
This morning on the Economic Front the only data of note is German Producer Prices which will be released at 7.00 am. There is no data from the U.S due the markets being closed for the Martin Luther King Day.
March S&P 500
The current market action has continued to subdivide higher with the Dow Jones now closing higher for 9 of the 12 trading days in January. The Daily percentage changes have not been large, but they have been persistent, which is one reason why sentiment measures have jumped to the top of their historic range. The Daily Percentage change in the S&P has not been greater or less than 1% since October 11, 2019, a span of 66 trading days. This is the longest stretch since June 26, 2018 to October 9, 2018, a span of 73 trading days. This latter time period was the run up the October 3, 2018 high, where the Dow topped and then dropped nearly 20% to December 26, 2018. The Daily Sentiment Index pushed to 92% after last Thursday’s close, which is its highest level since January 2018. This still stands as the peak for the KBW Banking Index. Why is the DSI at 92%? Because the market is rallying. Extreme levels occur in the late stages of rallies and declines. I am still convinced that we at or very near to a significant top. Friday’s S&P plan worked well with the market trading higher to my 3327 sell level before selling off to my 3319 T/P level and I am still flat. Today I will be a seller from 3333/3346 with a 3355 stop. With the Cash Equity Markets closed today it is unlikely that we will see much price action until traders return to their desks tomorrow.
EUR/USD
The Euro traded lower to my 1.1100 buy level on Friday. I am still long and I will look to add this position on any further move lower to 1.1060 with the same 1.1035 stop. I will now lower my T/P level on this position to 1.1125 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
March Dollar Index
As I am long the Euro I will now raise my Dollar sell level to 97.50/97.905 with a higher 98.25 stop.
March DAX
The DAX had its strongest session in a couple of weeks as the market followed the Euro Stoxx higher. I am still flat and today I will raise my buy level to 13330/13400 with a higher 13285 stop.
March FTSE
Late on Friday the FTSE traded higher to my 7625 sell level. As I wanted to be flat the FTSE over the weekend because I am still short the Dow I emailed my Platinum Members to exit and short position at 7608 and I am still flat. The FTSE has strong resistance from 7660/7700 and I will be a seller in this area with a 7735 stop.
Dow Rolling Contract
It is interesting that the ‘’Fear & Greed’’ Index topped with a Greed reading of 97 two weeks ago. Despite all three US Indices making new highs almost every day the ‘’Fear & Greed’’ Index closed lower at 89 on Friday. I am still short the Dow from last Thursday at a price of 29240 with the same 29170 T/P level. I will continue to add to this position at 29440. For now I will leave my stop unchanged at 29545.
March NASDAQ
I am still flat the NASDAQ which again closed at a new all-time high. The NASDAQ has initial resistance from 9230/9290 and today I will lower my sell level to this area with a 9335 stop.
March BUND
No Change as I am still a buyer on any dip lower to 170.70/171.10 with the same 170.35 stop.
Gold Rolling Contract
Gold came close to my initial 1541 buy level before turning around and rallying into the close. With the US Dollar stronger I am not going to chase Gold higher and I will leave my 1531/1541 buy level unchanged with the same 1525 stop.
Silver Rolling Contract
I am still flat Silver as the market again traded in a narrow range on Friday. Today I will continue to be a buyer on any dip lower to 17.45/17.85 with a 17.15 stop. If I am taken long I will have a T/P level at 18.05.
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