U.S. Indices choppy on Friday, hindered by the Quadruple Witching Expiration with stocks ultimately closing mixed with outperformance in the NASDAQ 100 as Mega cap stocks caught a bid in the final minutes of trade. T-notes steepened with bonds chopping to the volatile risk environment. The Dollar outperformed while cyclical currencies lagged with Sterling under pressure ahead of the Spring Statement this week. There was little economic data to digest on Friday with the focus on the return of Fed speak after the FOMC blackout period. Waller explained the reason for his dissent against the balance sheet slowdown, while Williams and Goolsbee stressed a wait-and-see approach. Williams noted they are in no rush to adjust monetary policy. In Europe, the German Bundesrat passed the debt reform bill and EUR 500 billion fund, as was expected. On Geopolitics, Russia and Ukraine blamed each other for an attack on the Sudzha gas metering station in Russia’s Kursk region. In US, Nike (NKE), FedEx (FDX), Micron (MU) and Lennar (LEN) earnings disappointed but Boeing (BA) rallied after US President Trump awarded the company with the new fighter jet contract. Attention this week turns to treasury supply, Final Q4 US GDP and the February PCE data. Fed Governor Waller explained his reasoning for his dissent on the balance sheet at last week’s FOMC rate decision. The Governor voted with others to keep rates on hold, but he was against slowing the pace of the balance sheet runoff. Waller said he preferred to continue the current pace of the balance sheet decline, noting slowing or stopping the run-off will be appropriate as they get closer to an ample level of reserves, but in his view, the Fed is not there yet as reserve balances stand at over USD 3 Trillion, and this level is abundant. He added there is no evidence from money market indicators, or from his conversation that the banking system is close to an ample level of reserves. He believed the slowed run-off pace beginning in June 2024 continues to be the right one. Waller said the Fed has tools available to mitigate unanticipated market disturbances and should rely on these and develop a plan to respond to any short-run strains. He added that even with the new slower pace of runoff, a plan is still needed. New York Fed President Williams said the current modestly restrictive monetary policy is ‘entirely appropriate’; the current rate policy fits with a ‘solid’ job market and above-target inflation. The Vice-Chair reiterated his prior view that there are no signs inflation expectations are becoming unmoored. He added that data shows public believes near-term inflation climb will dissipate. On the balance sheet, Williams said it was a ‘natural step’ to slow the pace of the drawdown. Similar to Chair Powell, Williams said the Fed is not in a hurry to make the next monetary policy decision. With regards to the University of Michigan Survey, he said inflation expectations data is an outlier. Williams echoed the wait-and-see approach, highlighting the many different economic scenarios, noting it is hard to know of performance and the clear impacts of tariffs on inflation. Regarding growth, he expects it to slow in part due to lower immigration. Meanwhile 2025 Voter Goolsbee said when you have a lot of uncertainty you have to wait for things to clear up, and the current conditions are “maybe” a shock to the economy depending on how long they last. The Chicago Fed President added that before judging how monetary policy reacts to tariffs, Fed needs to know how long the tariffs last, the possible retaliation and pass through to consumers. On data, Goolsbee added a lot of the hard data is strong. Ahead, Goolsbee noted that waiting is not free, the longer you wait, the cuts when they come will be backloaded. Right now, Goolsbee said they have to wait amid tariff threats, but there can be a cost to waiting. Furthermore, the Chicago Fed President said a slowdown in the economy would be a reason to cut, and if inflation ticked up outside of tariffs, and inflation expectations rose, they would have to revise the outlook. Elsewhere, Oil closed 0.31% higher while a stronger Dollar saw Gold close lower by 1.1%.
To mark my 3150th 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 1183 points on Friday and is now ahead by 2609 points for March after 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 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 0.08% higher at a price of 5667.
The Dow Jones Industrial Average closed 32 points higher for a 0.08% gain at a price of 41,985.
The NASDAQ 100 closed 0.39% higher at a price of 19,753.
The Stoxx Europe 600 Index closed 0.60% lower.
Last Friday, the MSCI Asia Pacific closed 0.4% lower.
Last Friday, the Nikkei closed 0.2% lower at a price of 37,677.
Currencies
The Bloomberg Dollar Spot Index closed 0.29% higher.
The Euro closed 0.8% lower at $1.0806.
The British Pound closed 0.6% lower at 1.2912.
The Japanese Yen fell 0.7% closing at $149.25.
Bonds
Germany’s 10-year yield closed 1 basis points lower at 2.76%.
Britain’s 10-year yield closed 8 basis points higher at 4.72%.
U.S.10 Year Treasury closed 2 basis points higher at 4.26%.
Commodities
West Texas Intermediate crude closed 0.31% higher at $68.28 a barrel.
Gold closed 1.1% lower at $3024.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone U.K. and U.S. Composite PMI at 8.30 am, 9.00 am, 9.30 am and 1.45 pm respectively. Finally, we have a speech from Fed Member Bostic at 5.45 pm.
Cash S&P 500
A late rally into Friday’s Chicago close prevented the S&P from having a weak Quarterly Expiration close. I have written at length how oversold the S&P is following the near 650 Handle fall from the February highs. Despite the awful ‘’Extreme Fear’’ readings on the ‘’Fear & Greed ‘’ Sentiment Index, internally the market has been strong as shown by the McClellan Oscillator which has now closed in positive territory for the past two trading session. This is a massive vote of confidence in my opinion that we are close to a sustainable bottom. My plan of buying dips in the American Indexes has worked well over the past two weeks especially as we have witnessed a number of positive divergences that so far has not been met with a sustained break higher. My S&P plan worked well as after the market traded the whole of my buy range for a 5647 average long position we rallied to my revised 5673 T/P level. Subsequently, I emailed my Platinum Members to buy the S&P again which I did at a price of 5635 before rallying to my 5648 T/P level and I am now flat. This morning, the S&P is trading higher at a price of 5668. We have short-term support below from 5635/5655 where I will again be a buyer with a 5619 ‘’Closing Stop’’.
EUR/USD
The Euro is now trading 140 points lower from where I marked prices last Thursday. This should as no surprise given how over extended the Euro has become after rising over 500 points in a week. The Euro has support below from 1.0670/1.0750 where I will be a small buyer with a 1.0595 wider ‘’Closing Stop’’.
Dollar Index
Finally, the Dollar rallied to my 104.10 T/P level on my latest 103.75 average long position and I am still flat. Today, I will again be a buyer on any dip lower to 103.00/103.80 with a now lower 102.45 ‘’Closing Stop’’. If triggered, I will have a T/P level at 104.30
Russell 2000
On Friday the Russell hit my buy range for a now 2040 long position, I will continue to look to add to this trade on any further move lower to 1980 while leaving my 1935 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 2090. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash FTSE
My FTSE plan worked well as the market sold off to my 8620-buy level before rallying to my revised 8678 T/P level as emailed to my Platinum Members and I am still flat. This morning the FTSE is trading at a price of 8650. We have short-term support below from 8500/8570 where I will again be a buyer with a lower 8435 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 8635. Despite the higher Gilt Yields I still do not want to be short the FTSE at this time.
Dow Rolling Contract
It took a while but finally on Friday the Dow sold off to my 41580-buy level before a late rally into Friday’s close saw my 41940 T/P level triggered, and I am now flat. Given how oversold the American Indexes are I will continue to be a buyer of dips. Today, I will again be a buyer from 41400/41650 with the same 41095 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 41900. I still do not want to be short the Dow at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
My NDX plan worked well as after the market hit Thursday’s buy range for a 19660 long position the market rallied to my revised 19820 T/P level. Subsequently. I emailed my Platinum Members to buy the NDX again at 19660. Overnight, the NDX opened above my T/P level for a 19870 exit level and I am now flat. Today, I will again be a buyer on any dip lower to 19650/19810 with a higher 19495 ”Closing Stop”. If I am taken long, I will have a T/P level at 19970. I still do not want to be short the NDX at this time.
December BUND
While both the U.K. Gilt and U.S. Treasury Markets have sold off since Thursday, the Bund has been strong, trading at 129.00 as I go to post. I will not chase the market higher, preferring to be a buyer on any dip lower to 127.40/128.20 with the same 126.75 ‘’Closing Stop’’. If triggered, I will have a T/P level at 128.90. I still do not want to be short the Bund at this time. If this view changes, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold briefly fell below 3300 on Friday before bouncing to close at 3325 and I am still flat. I will now lower my sell level to 3070/3088 with a lower 3111 ‘’Closing Stop’’. I still do not want to be long Gold at this time. If I am taken short, I will have a T/P level at 3053.
Silver Rolling Contract
Silver sold off to my buy range for a now 33.10 long position. Silver hit a low at 33.65 on Friday before bouncing to close over 33.00 at its New York close. I will add to this position on any further move lower to 32.30 while leaving my 30.95 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 33.65. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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