U.S. Equity Markets ended Friday’s session lower after a volatile trading session following the weaker than expected Non-Farm Payroll Report. The NASDAQ 100 led the decline, closing lower by 1.74%. Non-Farm Payroll data fell well short of expectations, with the economy adding 210,000 jobs versus the expectation of 546,000 additions. However, the Unemployment Rate fell to 4.2% versus the 4.5% estimate. The data supports the Federal Reserve’s decision to begin tapering its $120 billion in monthly purchases of Treasurys and mortgage-backed securities. It also means the pace at which the central bank pulls back on that stimulus is appropriate. In other economic data, ISM non-manufacturing PMI hit a fresh record high as demand remained strong and business outlook remained positive. Yet, there are still concerns over the Omicron variant and the potential to damage economic growth. Until there’s more data on vaccine effectiveness within the next few weeks, stock market action will remain choppy. Within the S&P 500, eight of the 11 sectors finished lower. European Markets closed higher. European Central Bank (“ECB”) President Christine Lagarde said a rate hike in 2022 was off the table, but she added the central bank will use other tools to combat inflation if needed. ECB Governing Council member Madis Müller said he doesn’t see the COVID-19 Omicron strain as a reason for ending pandemic bond purchases next year. On that front, biotechnology company BioNTech’s (BNTX) CEO Ugur Sahin said its COVID inoculation should continue to protect individuals against severe disease from the Omicron variant. His comments are notable because his company developed one of the most used coronavirus inoculations in combination with Pfizer (PFE). He added they will quickly be able to adapt their vaccine to better protect against the Omicron and future variants. World Health Organisation Chief Scientist Soumya Swaminathan added to the optimism, saying current COVID-19 vaccines are likely to offer some protection against the Omicron variant. In Asia, The People’s Bank of China said it would extend an interest-payment tax exemption through 2025 for foreign institutional investors’ domestic bond investments. It wants to keep foreigners investing in the nation’s economic growth. At the same time, Premier Li Keqiang said the government would reduce the amount of cash banks need to hold in reserve, to boost lending to smaller firms. That should also be supportive of spending going forward. Meanwhile, the growth picture looked rosy elsewhere in the region…Markit Japan’s final composite purchasing managers’ index (“PMI”) data for November rose versus October. It hit the highest level in over four years. Markit Australia’s final composite PMI figures for November rose versus the initial reading and October, driven by strength in new orders and employment. The Bank of Korea said it expects inflation data for 2021 to exceed the 2.3% prediction it made in late November, potentially increasing pressure to raise interest rates. Elsewhere, Oil rose 1.30% as investors rotated out of risk and into safe-haven assets, while Bitcoin fell 6% along with most risk assets. However, over the weekend Bitcoin got slammed hitting a low of $42000 before rebounding to sit at $49000 as I go to press.
To mark my 2450th 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 285 points yesterday, and is now down by 65 points for December, 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, having ended March with an impressive gain of 3769 points, 3286 points in February, 2077 points in January, and 2273 points last December. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Equities
The S&P 500 closed 0.84% lower at a price of 4538.
The Dow Jones Industrial Average closed 59 points lower for a 0.17% loss at a price of 34,580.
The NASDAQ 100 closed 1.74% lower at a price of 15,712.
The Stoxx Europe 600 Index closed 0.6% higher.
Last Friday, the MSCI Asia Pacific Index rose 0.3%.
Last Friday, the Nikkei closed 1% lower at a price of 28,029.
Currencies
The Bloomberg Dollar Spot Index closed 0.1% lower.
The Euro closed 0.1% higher at $1.1309.
The British Pound closed 0.5% lower at 1.3230.
The Japanese Yen rose 0.3%, closing at $112.82.
Bonds
Germany’s 10-year yield closed two basis points lower at -0.39%.
Britain’s 10-year yield closed eight basis points lower at 0.74%.
US 10 Year Treasury closed eight basis points lower at 1.36%.
Commodities
West Texas Intermediate crude closed 1.30% higher at $68.62 a barrel.
Gold closed 1.30% higher at $1,783.20 an ounce.
This morning on the Economic Front we have German Factory Orders at 7.00 am. This is followed by U.K. Markit Construction PMI and Euro-Zone Sentix Investor Confidence at 9.30 am. We have no date due from the U.S. this afternoon.
December S&P 500
Friday turned out to be another volatile trading session which was no surprise given what happened over the rest of the week. The only surprise was the 35 Handle rally in the last thirty minutes of trading to reduce the S&P loss on the day to 0.84%. My S&P plan worked well as post NFP, the market rallied to my 4595 sell level with a 4605 high print before falling to an evening low at 4498. This move lower saw my 4585 revised T/P level executed before the S&P hit my initial 4543 buy level. Subsequently, we rallied to my 4556 T/P level and I am now flat. The McClellan Oscillator closed weak again on Friday with a -218 print. One more serious down-day will set up another buy signal for U.S. Indexes. The S&P has strong support at 4487 and 4474. I will be an aggressive buyer from 4470/4490 with a wider 4455 ‘’Closing Stop’’. We have resistance from 4570/4585 where I will be a small seller with a 4601 ‘’Closing Stop’’.
EUR/USD
I am still flat the Euro. I will continue to be a strong buyer from 1.1190/1.1240 with the same 1.1145 stop. I will now lower my sell level to 1.1360/1.1410 with a lower 1.1455 stop.
December Dollar Index
I am still flat. The Dollar has resistance from 96.50/97.00 where I will continue to be a seller with the same 97.41 tight stop. If I am taken short I will have a T/P level at 96.20.
December DAX
My DAX plan worked well with the market trading lower to my 15080 buy level before rallying to my 15135 T/P level and I am now flat. The DAX has support from 14900/14970 where I will be a stronger buyer with a 14835 stop. I still do not want to be short the DAX at this time.
December FTSE
The FTSE continues to hold steady at lower prices. I will now raise my buy level to 7010/7060 with a higher 6965 stop.
Dow Rolling Contract
The Dow hit had a wild trading range of 550 points. We hit a post NFP high of 34800 before trading to a low of 34260 – 30 minutes before the Close. Subsequently, we rallied 300 points into the New York Close and I am still flat. The Dow has strong support from 34150/33950 where I will be an aggressive buyer with a 33795 ‘’Closing Stop’’.
December NASDAQ
The NASDAQ traded the whole of my buy range for a now 15750 average long position. I will now lower my T/P level to 15790 while leaving my 15595 ”Closing Stop” unchanged. If any of the above levels are hit I will be back with a new update for my Platinum Members.
March BUND
I have now rolled to the March Contract which trades at a Premium of 146 points to the December Contract. The March Contract has resistance from 174.85/175.25 where I will be a seller with a 175.71 stop. I still do not want to be long the Bund at this time.
Gold Rolling Contract
No Change. I am a small buyer on any further dip lower to 1737/1752 with the same 1725 stop.
Silver Rolling Contract
I am still long from last week at an average price of 22.75 with the same 21.75 stop. Meanwhile, I will leave my 22.95 T/P level unchanged.
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