U.S. Equity Markets surged on Friday, led by the 2.86% rise in the NASDAQ 100. The VIX fell 3.25% as a result, closing at a price of 19.85. December Existing Home Sales fell 15% month over month to 4.02 million, posting the biggest monthly decline since 2008 and the lowest number of homes since 2010. Annual sales were down 17.8% year over year (“YOY”), as rising mortgage rates and tighter supply strangled the housing market in 2022. Federal Reserve Governor Christopher Waller said that he favoured a 25-basis-point rate hike at the central bank’s next policy meeting in February. Netflix logged a strong earnings report for the fourth quarter, as it added 7.78 million subscribers, much higher than the 4.5 million estimated. Within the S&P 500 Index, all the 11 sectors finished higher, helping the McClellan Oscillator to close higher with a +177 print. European Markets also closed higher after a volatile session. German Producer Price Inflation slowed to an annual growth rate of 21.6% in December, the lowest reading since November 2021 and less than half the peak seen in August and September. U.K. Retail Sales unexpectedly fell for December, finishing off the worst year on record since the data started being recorded in 1997. Lower spending was driven by a drop-off in sales of non-food items as consumers’ purchasing power continues to be constrained. European Central Bank Chief Christine Lagarde urged policymakers and central banks around the world to stay the course on its collective rate-tightening monetary policy. Asian Markets closed higher led by the 1.86% rally in the Hang Seng. Japanese Prime Minister Fumio Kishida directed his cabinet to downgrade the current COVID-19 classification –to be in line with the seasonal flu – to refocus on the nation’s economic recovery, while The People’s Bank of China left loan prime rates unchanged at the one-year and five-year maturities. Meanwhile, Chinese Markets will be closed next week for the Lunar New Year holiday. Elsewhere, Oil rose 1.33% while Gold closed 0.3% lower.
To mark my 2700th 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 225 points on Friday and is now ahead by 2668 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 1.89% higher at a price of 3972
The Dow Jones Industrial Average closed 330 points higher for a 1% gain at a price of 33,375.
The NASDAQ 100 closed 2.86% higher at a price of 11,619.
The Stoxx Europe 600 Index closed 0.37% higher.
Last Friday, the MSCI Asia Pacific rose 0.9%.
Last Friday, the Nikkei closed 0.56% higher at a price of 26,553.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% lower.
The Euro closed 0.2% higher at $1.0856.
The British Pound closed 0.1% higher at 1.2401.
The Japanese Yen fell 0.9% closing at $129.58.
Bonds
Germany’s 10-year yield closed 13 basis points higher at 2.18%.
Britain’s 10-year yield closed 3 basis points lower at 3.37%.
U.S.10 Year Treasury closed 8 basis points higher at 3.48%.
Commodities
West Texas Intermediate crude closed 1.33% higher at $81.40 a barrel.
Gold closed 0.3% lower at $1928.10 an ounce.
This morning on the economic front we have the Chicago Fed National Activity Index at 1.30 pm. The only other data of note is Euro-Zone Consumer Confidence at 3.00 pm.
Cash S&P 500
There is nothing worse than getting stopping out of a position on Thursday’s close only to see the S&P surge over 70 Handles on Friday. This move higher did not allow me to get on board adding to my frustration. However, we have had a nice start to the year having being a buyer of dips all-month. The surge in the NASDAQ saw the S&P regain its 50 Day Moving Average. With the MO closing at +177 on Friday there is plenty of room for the market to trade higher. Friday’s move lower to 3885 saw positive divergence helping the market to produce a strong rally. Earnings reactions will be key this week ahead of next week’s key Fed Meeting. I will now raise my buy level to 3937/3955 with a 3923 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 3971.
EUR/USD
The Euro continues to trade above my 1.0750 buy level, consolidating the last 10 day’s aggressive move higher. The Euro is overbought while the Dollar is oversold given the extent of their respective moves since last October. Today, I will move my buy level higher to 1.0710/1.0780 with a higher 1.0645 ‘’Closing Stop’’.
March Dollar Index
No Change. I am still long at an average rate of 102.10 with the same 101.35 ‘’Closing Stop’’. I will now lower my T/P level to 102.45. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
The DAX never came close to Friday’s buy range, trading 150 points higher from where I marked prices on Friday morning. The way the NDX surged on Friday shows that Bulls are in control despite the worsening economic back ground and job losses across the globe. I keep mentioning the old adage that markets that cannot sell-off on bad news have to be respected. I will now raise my buy level in the DAX to 14860/14950 with a higher 14785 ‘’Closing Stop’’. I still do not want to be short the DAX at this time.
Cash FTSE
The FTSE just missed my buy level by 15 points before having a nice 60 point rally into the New York close. The FTSE has support from 7690/7760. I will now raise my buy level to this range with a higher 7615 ‘’Closing Stop’’.
Dow Rolling Contract
My Dow plan worked well as the market traded lower to my 32,940 buy level before rallying to my revised 33095 T/P level and I am now flat. Although the Dow rose 1% on Friday it is no surprise that it continues to underperform the NDX given how oversold tech stocks are at this time. Despite the nasty sell-off on Thursday, you have to be impressed by the extent of Friday’s come back across the board. The price action is bullish. It will become even more bullish if the Dow can break and close back above its 50 Day Moving Average (33583). Today, I will be a buyer from 33000/33250 with a wider 32795 ‘’Closing Stop’’. I no longer want to be short the Dow at this time.
Cash NASDAQ 100
It is amazing that the companies with the biggest layoffs ripped higher on Friday. Amazon, Google and Microsoft having announced a large number of redundancies saw their respective share prices surge, helping the NDX to close higher by 2.86%. This came against a background of rising bond yields making their gains even more impressive. I have stated all year that the forced tax selling in late December was the catalyst for this month’s aggressive rally as tech stocks have become extremely cheap relative to the past few years. This move higher saw my 11390 T/P level triggered on my latest 11320 long position and I am now flat. In the process the NDX closed 200 points above its 50 Day Moving Average (11414) and this level will attract a lot of buying on any subsequent test. Today, I will be an aggressive buyer from 11370/11520 with a tight 11255 ‘’Closing Stop’’.
March BUND
Thankfully, we had no buy level in the Bund on Friday as the market is trading over 150 points lower from where I marked prices. The Bund Yield has now risen 25 Basis points higher from last Thursday’s low. This is a big move. The Bund has support from 136.80/137.60 where I will be a buyer with 135.95 ‘’Closing Stop’’.
Gold Rolling Contract
No Change. Gold continues to outperform Silver and I am still flat. As I have a large, long Silver position, I will leave my Gold buy level at 1890/1905 with a the same 1879 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I am still long at 23.65 with the same 24.10 T/P level. If my T/P level is triggered, I will again look to buy the market from 23.10/23.70 with the same no stop. If I am taken long a second time I will have a T/P level at 24.30.
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