U.S. Indices were slammed on Friday as geopolitics continues to dominate, while a heavy week of central bank activity marked a hawkish shift due to the US/Iran war. The downside saw the Russell fall 10% from peaks, officially entering correction territory. Reports had suggested that US President Trump is considering plans to occupy Kharg Island to pressure Iran to reopen the Strait of Hormuz, but reports stated that Iran is maintaining its hard line on Hormuz. The US is also sending thousands of troops to the Middle East, and CBS suggested the US is preparing for a ground invasion into Iran, but no final decision has been made. The escalating tensions saw oil prices rally, in turn seeing Treasury Yields surge in the US and Europe with Money Markets pricing in more hawkish global central bank activity, with rate cut bets turning to rate hike bets. Fed speak saw Waller voice inflation concerns from the War, while Bowman said she pencilled in three rate cuts in 2026. In the UK, 10-year Gilt yields hit the highest level since 2008, while Bund yields hit the highest level since 2011. In FX, both the Canadian Dollar and US Dollar outperformed on energy prices and haven demand, respectively. Meanwhile, AUD, JPY and NZD underperformed with Antipodes hit by risk sentiment while Yen was hit by surging US yields. Gold and Silver also plummeted on the hawkish central bank shifts seen this week, while Bitcoin was slightly lower, but not to the same extent as stocks and metals. Shortly before the close, President Trump issued remarks, saying we can have dialogue with Iran, but don’t want a ceasefire. Governor Waller took on board the risks the Middle-East conflict poses, walking back his calls for more imminent rate cuts. He said he thought he would dissent after the last jobs report at Wednesday’s meeting, but the Iran conflict has changed things. He notes that if oil stays high for months, at some point it will bleed into core inflation, with a high and persistent oil shock not having a transitory impact on inflation, which the Fed cannot look through. He believes this caution is warranted, wants to wait and see how this evolves before deciding on rate cuts for later this year and how the economy changes. On that, he would advocate for cuts again late in the year if the labour market is weak. Waller does not think there is a need to consider rate hikes, and markets have not shown any unanchoring of inflation expectations. Investors understand inflation will drop as tariffs roll off. Meanwhile, Waller expects labour force growth to be close to zero, which changes the breakeven level of job growth. Separately, he sees no reason to make bank reserves scarce just to reduce the balance sheet. Fed Member Bowman said she has pencilled in three interest rate cuts for 2026; a more dovish outlook on the rate path this year than the Fed Median SEP of one 25bps cut. Bowman says she is still concerned about the labour market. Regarding Iran, she said it is too early to say what the Iran war means for the Fed. On banking, she noted that the new bank rule proposals have broad support and hopes the changes will pull more activity back into the banking sector. Elsewhere, Oil closed higher by 3% while Gold ended its worst week in 43 years with a loss of 3% on Friday.
To mark my 3350th 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 lost 140 points on Friday and is now ahead by 4131 points for March having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points whe ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 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 1.51% lower at a price of 6506.
The Dow Jones Industrial Average closed 443 points lower for a 0.96% loss at a price of 46,225.
The NASDAQ 100 closed 1.23% lower at a price of 24,425.
The Stoxx Europe 600 Index closed 1.78% lower.
Last Friday, the MSCI Asia Pacific closed 1.1% lower.
Last Thursday, the Nikkei closed 3.38% lower at a price of 53,372 – The Nikkei was closed Friday.
Currencies
The Bloomberg Dollar Spot Index closed 0.33% higher.
The Euro closed 0.16% lower at $1.1560.
The British Pound closed 0.68% lower at $1.3337.
The Japanese Yen fell 0.93% closing at $159.29.
Bonds
U.K.’s 10-Year Gilt closed 16 basis points higher at 4.94%.
Germany’s 10-Year Bund Yield closed 11 basis points higher at 3.05%
U.S.10 Year Treasury closed 12 basis points higher at 4.38%.
Commodities
West Texas Intermediate crude closed 2.46% higher at $97.75 a barrel.
Gold closed 2.95% lower at $4512.10 an ounce.
This morning on the Economic Front we have no data of note from either the U.K. or the Euro-Zone. At 12.30 pm we have the Chicago Fed National Activity Index followed at 2.00 pm by Construction Spending. Next, at 3.00 pm we have Euro-Zone Consumer Confidence. Finally, at 5.00 pm we have the Atlanta Fed GDPNOW for Quarter 1.
Cash S&P 500
The S&P 500 finished down for a fourth straight week, putting the index roughly 7% below its recent high. From a technical standpoint, the market is in oversold territory on both the Weekly and Daily charts, with momentum readings flashing levels that have historically suggested a bounce is due. There is a decent setup for a rally early this week—volatility tends to deflate on Monday mornings as over-weekend hedges get unwound—but we saw the exact same thing play out last week, and it fizzled by Tuesday afternoon. The bigger picture has not changed: oil is driving everything. Crude continues to trend higher, and until that changes, the downstream effects are going to keep pressuring risk assets. Rising oil prices are pushing Interest Rates sharply higher across the curve—both in the US and Europe. Look at what is happening in Britain, where short-term rates have gone nearly vertical over the past week. Markets are repricing inflation expectations fast, and for good reason. Gasoline prices have surged dramatically since late February—up over 50%. When you think about how that feeds into CPI calculations, even a rough back-of-the-envelope estimate suggests headline inflation could be heading back toward levels we have not seen in a while, potentially approaching the kind of readings that completely take rate cuts off the table. That is ultimately what is driving the move in rates, and it is why the long end of the curve is also climbing back toward levels last seen over the summer. Financial conditions are tightening across the board. Rising oil, higher rates, a firmer U.S Dollar, and—critically—credit spreads starting to widen. Credit spreads are still relatively tight compared to where they got in 2022, and that is actually the more worrisome part. If they continue to widen toward those prior stress levels, the implied compression in equity valuations could be significant. There is a lot of room for the market to reprice lower if financial conditions keep deteriorating. Systematic flows are also starting to shift. Models are suggesting further selling pressure may be building in both equities and treasuries, and these flows do not care about headlines or oil prices—they just follow the trend. Meanwhile, there is some options-related positioning that could provide a floor for the market in the near term, at least through the end of March. But once we get into April, that support goes away. Volatility is elevated but not in a place where it is necessarily going to collapse. Realised volatility is running high enough to keep implied volatility somewhat supported, even if the short-dated measures come in on Monday. The setup is fragile: technically oversold, some flows potentially supportive near term, but the macro backdrop—oil trending higher, rates repricing, credit starting to crack—all argues for caution. I still think everything revolves around where oil prices are and where they are going. If crude opens flat to start the week, stocks can probably catch a bid. But if oil takes another leg higher, that is going to overwhelm any technical bounce. Being oversold is a condition, not a timing mechanism—and in this kind of environment, conditions can stay stretched for a lot longer than people expect. The S&P 500 dropped sharply on Friday, falling more than 1.5% to finish at its lowest level since September. The Index is technically oversold — trading below its lower Bollinger Band and with the RSI below 30 — setting up a potential bounce. But if the market fails to hold here, there is not much support below, and a deeper pullback could come quickly. What makes this more than a simple technical story is the rate picture. Fed Funds Futures are now pricing in rates near the current upper bound through year-end. The market has gone from expecting cuts to pricing in the possibility of a hike in a matter of weeks. And it is not just the U.S. — the Euro-Zone is pricing in multiple ECB hikes before year-end, and the UK is even further ahead, with SONIA futures implying more than three rate hikes. The repricing in rates has been violent, and the most severe moves have been in the UK. So, while the S&P 500 looks oversold on a technical basis, the fundamental backdrop may not support a sustainable rally. Shifting from an easing cycle to a tightening cycle in just two weeks is a rapid and significant regime change. Bond market volatility has soared, which is not supportive of equities. And if the rate outlook is correct, the Index likely has not fallen enough — a reversion to historical median valuations would imply significant further downside from current levels. However, with the McClellan Oscillator closing at -228 on Friday and the Fear & Greed Index at 15, in my opinion a relief rally is close. As I wrote on Thursday that Trump always chickens out and we saw glimpses of this on Friday evening when he said the war may end soon. 10-Year Bond yields at 4.38% is a major issue for the US given the level of debt. Friday’s sell-off across the board wiped out all the gains (and more) that I had made on Thursday resulting in an expensive lesson. My S&P plan had worked well as the market hit my 6575-buy level before rallying to my 6612 revised T/P level. Subsequently, I bought the S&P again at 6560 before exiting this position at 6584. Friday’s lates sell-off saw the S&P hit my next buy range as emailed to my Platinum Members for a 6530 average long position. The S&P hit a low at 6474 before rallying to a 10.00 pm London high of 6535 as Trump’s comments were taking positively by the markets. This rally saw the S&P hit a high on Saturday morning at 6570 before unravelling again after Iran up the anti by threatening to fire ballistic missiles. As I go to post the S&P is expected to open well below 6500. Given the technical backdrop I am comfortable with my 6530 long position where I will have no stop or T/P level for now and reassess on Monday morning. If this view changes I will be back with an update for my Platinum Members this evening after the Futures Markets re-open at 10.00 pm London Time.
EUR/USD
My 1.1450 long Euro position worked well as the market rallied to my 1.1550 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 1.1410/1.1490 with a higher 1.1325 ‘Closing Stop’. If I am taken long, I will have a T/P level at 1.1560.
Dollar Index
I am still flat. The Dollar never came close to Thursday’s sell range. I will now lower my sell level to 100.20/101.00 with a lower 101.75 ‘Closing Stop’. If I am taken short, I will have a T/P level at 99.60.
Russell 2000
My 2470 long Russell position worked well as the market rallied to my 2510 T/P level and I am now flat. The Russell closed at a price of 2450 on Friday having hit an intra-day low at 2423. Today, I will again be a buyer from 2360/2420 with a lower 2215 ‘Closing Stop’. If I am taken long, I will have a T/P level at 2470.
FTSE 100
Wrong! It is no surprise the FTSE got slammed for over 2% on Friday following a 16 basis point rise in 10-Year Gilt Yields, closing the week at 4.94% which is the highest rate since 2008. This move lower saw my second buy level at 10110 triggered for a 10160 average long position before stopping me out of this trade at 9995 and I am now flat. IG is projecting the FTSE to open at 9840 this evening. The FTSE is severely oversold and has gone from trading outside the top of its Daily Bollinger Band to trade below the bottom of the Ban in just three weeks which is a remarkable move. I will be a strong buyer of the FTSE from 9720/9820 with a wider 9595 ‘Closing Stop’. If triggered, I will have a T/P level at 9960.
Dow Rolling Contract
Wrong! The Dow has been a frustrating and volatile contract to trade over the past month. Given the size of the contract in points terms the moves have been huge. On Friday I was stopped out of my 46425 average long position well be low my stop at 45995. As soon as I was stopped out of this position the Dow rallied, hitting a high on Saturday morning with IG at 46280. As I go to post IG is calling for the Dow to open between 45500 and 45600. Just like all the Indexes that I follow the Dow is severely oversold. We have short-term support below from 44900/45200 where I will be a strong buyer with a lower 44635 ‘Closing Stop’. If I am taken long, I will have a T/P level at 45910. If any of these views change, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
Wrong! Just like the Dow above I was stopped out of my 24425 average long position well below my stop at a price of 23995 and I am still flat. The NDX has strong support below from 23420/23720 where I will be an aggressive buyer with a 23195 tight ‘Closing Stop’. If I am taken long, I will have a T/P level at 24180.
December BUND
Thankfully the Bund rallied to my 127.05 T/P level on my latest 126.60 long position and I am now flat. On Friday the Bund got slammed with Yields rising above 3.05% for the first time since 2011. The Bund has support below from 124.90/125.60 where I will again be a buyer with a lower 124.15 ‘Closing Stop’. If I am taken long, I will have a T/P level at 126.80.
Gold Rolling Contract
My Gold plan worked well as the market traded the whole of my buy range for a 4625 average long position before rebounding on Friday morning to a high at 4735. This move higher saw my revised 4695 T/P level triggered. Friday’s aggressive sell-off saw the market hit my latest buy level at 4480. I will add to this position on any further move lower to 4380 while my ‘Closing Stop’ will be at a price of 4295. I will have a T/P level on this position at 4630. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Wrong! Incredible two-way volatility in Silver since Thursday’s Daily Commentary was posted. Silver hit my second buy level at 72.50 for a 73.75 average long position before stopping me out of this position at 69.95 and I am now flat. Although Silver is extremely oversold I am going to stay flat especially as I am long Gold which is enough exposure for now. If Silver continues to sell-off I will be back with a new buy level for my Platinum Members.
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