Despite the escalation of the Russian invasion into Ukraine, U.S. Equity Markets surged on Friday led by the Dow closing higher by 2.51%. The big driver for this move was optimism over tensions cooling in Europe. Russia said that it is prepared to send a delegation to Minsk, Belarus to meet with Ukrainian officials. The potential for successful talks seems unlikely at the moment, but at least there is discussion as markets rallied on optimism around a potential resolution. Going into the weekend, the shorts dialled back their exposure, which helped push markets higher. There was also a bunch of commentary from Federal Reserve presidents. On Friday morning, Fed Governor Christopher Waller joined St. Louis Fed President James Bullard in calling for 100 basis points (1%) in rate hikes by June. This is among the most hawkish stances at the Fed. Federal Reserve Bank of Cleveland President Loretta Mester and Richmond Fed President Thomas Barkin also said that, for now, the Ukrainian conflict does not change the Fed’s stance on tightening monetary policy. Thus, Wall Street continues to expect a 25-basis-point (0.25%) hike at the March meeting, after earlier concerns over a larger rate hike. The advances outnumbered the declines led by big gains from Block (SQ) on a strong earnings report. Software names were on the weaker side, dragged down by Zscaler’s (ZS) slowing billings growth. Within the S&P 500, all 11 sectors finished higher. European Markets closed higher by over 3.5% across the board. Still, Russia remained in focus. The European Council agreed on sanctions that would inhibit Russia’s access to financial and technology markets in addition to restrictions on the energy and transportation sectors. Russian government officials said Russia intends to get rid of Western influence in Ukraine, establishing a pro-Moscow regime. European Central Bank Chief Economist Philip Lane said the Ukraine conflict could cut 3% to 4% off the region’s economic growth, weakening the case for monetary-policy tightening. Yesterday, it was announced that the EU, U.S. and allies agreed to cut off a number of Russian banks from SWIFT. The Banks affected are all those already sanctioned by the International Community. In Asia, Japanese Prime Minister Fumio Kishida condemned Russia’s actions toward Ukraine, saying it will sanction financial services, semiconductor exports, and freeze assets. Chinese Foreign Minister Wang Yi said the government does not intend to intervene in oil markets following the rally in crude prices. The People’s Bank of China added another $46 billion worth of funds to the financial system to ensure ample liquidity ahead of month-end. Taiwan’s government raised its 2022 economic growth forecast from 4.15% to 4.42%, compared with Wall Street’s expectation of 3.4%. Elsewhere, Oil fell 0.55% on reports of coming talks between Ukraine and Russia, which could lower geopolitical tensions in Europe, while Gold closed 1.76% lower as investors continued to rotate back into risk assets.
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For anyone following my Platinum Service it made 326 points on Friday and is now ahead by 5284 points for February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss, having made 2466 points in November, 1028 points in October, 2866 points in September, 1543 points in August, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, after ending March with an impressive gain of 3769 points. 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 2.24% higher at a price of 4384.
The Dow Jones Industrial Average closed 834 points higher for a 2.51% gain at a price of 34,058.
The NASDAQ 100 closed 1.53% higher at a price of 14,189.
The Stoxx Europe 600 Index closed 3.4% higher.
This morning, the MSCI Asia Pacific Index fell 0.5%.
This morning, the Nikkei closed 0.16% higher at a price of 26,526.
Currencies
The Bloomberg Dollar Spot Index closed 0.4% lower.
The Euro closed 0.6% higher at $1.1272.
The British Pound closed 0.1% higher at 1.3411.
The Japanese Yen fell 0.2%, closing at $115.52.
Bonds
Germany’s 10-year yield closed four basis points higher at 0.22%.
Britain’s 10-year yield closed one basis points higher at 1.46%.
US 10 Year Treasury closed three basis points higher at 1.97%.
Commodities
West Texas Intermediate crude closed 0.55% lower at 91.59 a barrel.
Gold closed 1.76% lower at $1,887.10 an ounce.
This morning on the Economic Front we have UK GDP at 9.00 am. Next, we have U.S. Wholesale Inventories and the Trade Balance at 1.30 pm. Finally, we have the Chicago Purchasing Managers’ Index and the Dallas Fed Business Index at 2.45 pm and 3.30 pm respectively.
Cash S&P 500
Thursday’s reversal in the S&P continued on Friday as we just witnessed one of the strongest two-day bounces in history with the S&P rallying an incredible 280 Handles. Thankfully, we had no sell levels in any of our Equity Indexes on Friday having correctly called for all sell-offs to be bought given the positive divergence and the oversold nature of my charts. Last week’s early stock market drop and subsequent late reversal followed the pattern seen at the start of previous wars. Personally, I remember this happening at the start of the two Iraq wars. In both instances, stocks fell in the weeks leading up to both invasions, while Gold and Oil surged. After the wars started, these trends quickly reversed as investors sold Gold and bought stocks aggressively as we saw on Thursday afternoon and all-day Friday. Part of the late buying may have something to do with the Fed who may be inclined to be less aggressive with their rate hikes which will start next month. However, for this reversal to gain more legs we need to see the 4460 level captured which is the 200 Day Moving Average. Initially, any rally to the 4445/4475 area will be met by strong selling. I will be a seller here with a wider 4501 stop. The VIX is getting closer to my 25 target, closing 9% lower on Friday at a price of 27.59. Overnight, the S&P Futures got hit hard following the removal of the Russian Banks from SWIFT and Putin threatening to set off a nuclear bomb. The S&P opened 120 Handles lower but are rebounding to sit at 4315 as I go to press. One positive headline will drive the market higher with most of the bad news now priced into this market in my opinion. The S&P has strong support from 4260/4290 where I will be a buyer with no stop.
EUR/USD
The rebound in Equity Markets saw the Euro rally to my 1.1260 sell level. As I wanted to be flat over the weekend I emailed my Platinum Members to exit any short position at 1.1247. Overnight, the Euro sold off to my 1.1150 buy level before rallying to my 1.1185 T/P level and I am now flat. The Euro has further resistance from 1.1295/1.1345 where I will be a seller with a 1.1381 tight stop. The Euro has support from 1.1090/1.1140 where I will again be a strong buyer with no stop for now.
March Dollar Index
My Dollar plan worked well with the market trading higher to my 97.30 sell level before trading lower to my 97.00 T/P level and I am now flat. The Dollar has resistance from 97.50/98.00 where I will again be a seller with no stop.
Cash DAX
No Change. I will not chase the DAX higher, leaving my 13880/13980 buy level unchanged with the same 13735 wider stop. I still do not want to be short the market at this time.
Cash FTSE
The FTSE surged 4% higher on Friday, never coming close to my buy range and I am still flat. This morning on the back of the Putin Nuclear threat the FTSE is trading 200 points lower than Friday’s close. We have support from 7240/7320 and I will move my buy level to this area with again no stop for now. If I am taken long, I will have a T/P level at 7390. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The Dow surged over 1000 points from where I marked prices on Friday, enabling me to cover my 33200 latest average long position too early at 33280 and I am still flat. The Dow made a high above 34100 before selling off over 700 points on the re-open last night. I had no buy level in the Dow. We have support from 33050/33350 where I will be a small buyer with no stop. The Dow remains oversold and bulls need to see the Dow break back above 35000 which is its 200 Day Moving Average to regain control. Given how oversold the Dow remains I still do not want to be short the market at this time..
Cash NASDAQ 100
The NDX built on Thursday’s late reversal, trading the whole of my sell range for a 14050 average short position. Subsequently the NASDAQ fell 150 points enabling me to cover this position at my revised 14028 T/P level and I am still flat. This morning the NDX is rebounding off its overnight 13760 low print, sitting at 14010 as I go to press. The NDX is severely oversold, has support from 13650/13850 where I will again be a buyer with no stop.
March BUND
My Bund plan worked really well with the market trading lower to my 165.98 buy level. I stayed long over the weekend. On the back of the equity sell-off, the Bund opened higher at 167.00 enabling me to book a decent gain on this long position and I am now flat. With Equity Markets rallying, I will look to buy the Bund again from 165.70/166.30 with no stop.
Gold Rolling Contract
Gold reversed all of Thursday’s gains which is no surprise given the amount of buying we saw early Thursday morning, as Gold hit a high above $1990. Gold just missed my 1880 buy level on Friday and I am still flat. I still do not trust the price of Gold and today I will lower my buy level to 1853/1868 with a wider 1839 stop.
Silver Rolling Contract
My Silver plan worked well as Silver rallied overnight to my 24.55 T/P level on my 24.10 latest long position and I am still flat. I will continue to look to buy the dip in Silver. We have support from 23.10/23.70 where I will again be a buyer with no stop.
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