U.S. Equity Markets surged on Friday helping the S&P 500 to hit a fresh record high with Technology names doing a lot of the heavy lifting. The yield curve flattened with front-end yields rising ahead of supply this week. The highlight of the session was the University of Michigan Consumer Survey which saw a huge surge in consumer sentiment with jumps in both current conditions and expectations, while the inflation expectations dipped. The Dollar was flat, however, and failed to benefit from the strong data with Dollar Index trading in a narrow range while both the Australian Dollar and Canadian Dollar outperformed thanks to their cyclical nature. Oil prices settled in the red, however, despite the winter freeze in the U.S. and heightened Middle East tensions. Highlights this week include the Bank of Japan and ECB policy meetings along with American PCE and GDP metrics with the data to be eyed to help gauge Fed expectations. Note, Money Markets briefly priced in less than a 50% probability of a cut in March on Friday with Fed Member Daly the latest to push back on near-term rate cuts, but Bostic repeated he is open to changing his rate cut timing outlook depending on the data. The preliminary University of Michigan Consumer Sentiment Survey for January saw the headline jump to 78.8, well above the expected 70.0 and the prior 69.7. Internally, current conditions and forward-looking expectations rose to 83.3 (prev. 73.3) and 75.9 (prev. 67.4), respectively. On the inflation footing, 1yr ahead expectations fell to 2.9% from 3.1%, the lowest since December 2020, while the longer-term 5-10yr gauge dipped to 2.8% from 2.9%. On the release, Pantheon Macroeconomics said, “The key number, in the survey is the expectations index, because it has been a decent guide to growth in real consumption spending. If the rise in the January expectations index, to 75.9 from 67.4, is sustained through Q1, it will be consistent with another strong real consumption print, following the likely rise of around 2.5% in Q4.” Elsewhere, Oil fell 0.47% while Gold recovered some of last week’s losses, ending Friday with a 1.1% gain.
To mark my 2925th 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 215 points on Friday and is now ahead by 2625 points for January. December saw a gain of 1890 points after finishing 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 a gain of 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 1.23% higher at a price of 4839.
The Dow Jones Industrial Average closed 395 points higher for a 1.05% gain at a price of 37,863.
The NASDAQ 100 closed 1.95% higher at a price of 17,314.
The Stoxx Europe 600 Index closed 0.26% lower.
Last Friday, the MSCI Asia Pacific closed 0.5% higher.
Last Friday, the Nikkei closed 1.40% higher at a price of 35,963.
Currencies
The Bloomberg Dollar Spot Index closed 0.26% lower.
The Euro closed 0.2% higher at $1.0893.
The British Pound closed 0.1% higher at 1.2697.
The Japanese Yen rose 0.1% closing at $148.10.
Bonds
Germany’s 10-year yield closed 1 basis points lower at 2.30%.
Britain’s 10-year yield closed 4 basis points lower at 3.94%.
U.S.10 Year Treasury closed 4 basis points higher 4.15%.
Commodities
West Texas Intermediate crude closed 0.47% lower at $73.73 a barrel.
Gold closed 1.1% higher at $2028.10 an ounce.
The only Economic data of note on either side of the Atlantic today, is the German Bundesbank Monthly Report which will be released at 11.00 am.
Cash S&P 500
The S&P has rallied over 100-Handles since Thursday’s commentary. Although I was not long for this latest move to new all-time highs, at least we were not short as yet again anyone trying to press the downside is caught seriously offside. The 4730/4740 support level continues to hold the market, but even I am shocked by Friday’s vertical move to new highs. The previous high of 4818 should now act as strong support on any test. As a result, I will now raise my buy level to 4807/4822 with a tight 4795 ‘’Closing Stop’’. The 14-Day RSI closed at 67 on Friday. One more strong up-day will see this indicator issue a sell signal. Internally, the market is awful but as we have seen since the October lows, liquidity trumps everything. Despite Friday’s new highs, the RSI for the $BPSPX only closed at 40 which is bizarre. If the internals improve then the S&P can fly from here. The S&P has resistance above from 4870/4886 where I will be a small seller with a 4901 ‘’Closing Stop’’.
EUR/USD
I am still long the Euro from last Wednesday morning at a price of 1.0910. I will continue to look to add to this position at 1.0840 while leaving my 1.0795 ‘’Closing Stop’’ unchanged. I will leave my T/P unchanged at 1.0950. If any of the above levels are hit, I will be back with a new update form my Platinum Members.
Dollar Index
The Dollar traded in a narrow range on Friday, recording another ‘’inside day’’ following Tuesday’s 1% rally. I am still flat. My only interest in selling the Dollar is still on a rally to 104.10/104.80 with the same 105.35 ‘’Closing Stop’’. I no longer want to be long the Dollar at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash DAX
Despite the recovery in U.S. Indexes, the DAX continues to trade heavy. Even though the DAX never came close to Thursday’s buy range, I would have expected the DAX to be trading higher. Despite the heaviness in the market, I have no interest in being short the DAX. Today, I will raise my buy level to 16430/16520 with a higher 16355 ‘’Closing Stop’’.
Cash FTSE
It took a while but finally the FTSE rallied to my 7480 T/P level on my latest 7445 average long position and I am now flat. This morning the FTSE is trading basically unchanged at a price of 7490. We have short-term support from 7385/7455 where I will again be a buyer with a 7335 ‘’Closing Stop’’. Given how oversold the FTSE is trading, I have no interest in being short the market.
Dow Rolling Contract
Thankfully we had no sell level in the Dow with the market trading 700 points higher from where I marked prices last Thursday. The Dow has support from 37480/37730 where I will be a small buyer with a higher 37295 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 37920. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
After the NDX cam nowhere close to Thursday’s buy range, I emailed my Platinum Members to buy the NDX at a price of 16830 before the market rallied to my 16920 T/P level and I am now flat. I did not see the NDX rallying a further 400 points on Friday. Thankfully we were not short. The 14 Day RSI closed at an overbought 72 print on Friday night. The NDX has resistance from 17410/17560 where I will be a small seller with a 17665 ‘’Closing Stop’’. Despite the aggressive rally over the past two trading sessions, I have no interest in putting on a long position at these levels. If this view changes, I will be back with a new update for my Platinum Members.
March BUND
Higher Treasury Yields saw the Bund hit my second buy level at 133.75 for a now 134.10 average long position. The Bund traded in a narrow range on Friday. I will now lower my T/P level on this position to 134.60. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
My long 2003 Gold position worked well as the market rallied to my 2012 T/P level and I am still flat. The weaker Dollar on Friday saw Gold rally, sitting at 2028 as I go to press. Today, I will again be a buyer on any dip lower to 1995/2010 with the same 1979 wider ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I still believe in the bull case for this precious metal. I will continue to hold my 24.40 average long position with no stop or T/P level for now. If this view changes, I will be back with a new update for my Platinum Members
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