U.S. Equity Markets surged on Friday led by the 2.04% gain in the NASDAQ 100. Bond Yields fell 11 Basis points setting the tone for Friday’s out of the box rally. This move higher saw the VIX get crushed, closing by lower by 5.62% at a price of 18.49. The Supply Management’s February Services Index showed pricing pressures easing while employment rose. Investors look ahead to this week’s significant list of macro news, including key employment data ahead of Federal Reserve Chairman Jerome Powell’s monetary-policy testimony. In its semi-annual report to Congress, the Federal Reserve said that the committee is strongly committed to returning inflation to its 2% objective. Within the S&P 500 Index, all the 11 sectors finished higher. European Markets closed higher. Euro-Zone PPI for January was 15.0% year over year, falling 2.8% from December, with declines from the energy sector providing the most support. ECB Governing Council member Pierre Wunsch said that he would not be surprised if peak rates reach 4% if inflation persists, while the ECB Meeting Minutes showed members were surprised by the regional economy’s resilience yet remain committed to their fight against inflation. Bank of England Chief Economist Huw Pill said the British economy has held up better than expected, implying the central bank may have to raise interest rates even more. In Asia, China’s Composite Purchasing Managers’ Index data for February saw a second straight month of expansion as activity in the services and manufacturing sectors surged. Japan’s CPI growth for February eased compared with January as government subsidies brought down costs. The Australian Bureau of Statistics said new-home loan values contracted more than expected in January as rising interest rates weighed on borrowing demand. Bank of Korea researchers warned that inflation risks remain to the upside due to rising utility and labour costs, potentially requiring more interest-rate hikes. Elsewhere, Oil continued its bullish tone, closing higher by 2.11% while Gold rose 1.08% on a weaker Dollar.
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For anyone following my Platinum Service it made 100 points on Friday and is now ahead by 1060 points for March after finishing February with a gain of 3164 points, after closing January with a gain of 4687 points, while 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 1.61% higher at a price of 4045
The Dow Jones Industrial Average closed 387 points higher for a 1.17% gain at a price of 33,390.
The NASDAQ 100 closed 2.04% higher at a price of 12,290.
The Stoxx Europe 600 Index closed 0.92% higher.
Last Friday, the MSCI Asia Pacific rose 0.54%.
Last Friday, the Nikkei closed 1.56% higher at a price of 27,927.
Currencies
The Bloomberg Dollar Spot Index closed 0.4% lower.
The Euro closed 0.3% higher at $1.0632.
The British Pound closed 0.8% higher at 1.2043.
The Japanese Yen rose 0.7% closing at $135.82.
Bonds
Germany’s 10-year yield closed 6 basis points lower at 2.69%.
Britain’s 10-year yield closed 6 basis points lower at 3.86%.
U.S.10 Year Treasury closed 11 basis points lower at 3.95%.
Commodities
West Texas Intermediate crude closed 2.11% higher at $79.81 a barrel.
Gold closed 1.08% higher at $1854.10 an ounce.
This morning on the Economic Front we have U.K. Construction PMI at 9.30 am. Next, we have Euro-Zone Sentix Investor Confidence and Retail Sales. Finally, we have U.S. Factory Orders at 3.00 pm.
Cash S&P 500
What a week? The S&P bounced perfectly off my 3920 low print on Thursday, closing 125 Handles higher at 4045 on Friday, helped by the VIX which got crushed on Friday, filling its lower gap in the process. Although the S&P missed my 3968 buy level with a 3970 low print – early Friday morning- it was an excellent start to the month. The S&P again closed over both its 50 and 200-Day Moving Averages while the Golden Cross (50 Day MA above the 200 Day MA) adds to the positive environment. Markets are now short-term overbought but structurally they are not. This may lead to a small pullback this week but in my opinion any sell-off will be bought. The S&P has support from 4010/4025 where I will be a strong buyer with a 3993 ‘’Closing Stop’’. I still do not want to be short the S&P at this time.
EUR/USD
The Euro had a late rally on Friday, closing at 1.0635. I am still long at a price of 1.0620. I will leave my T/P level unchanged at 1.0670. I will continue to look to add to this position at 1.0550 while leaving my 1.0495 ‘’Closing Stop’’ unchanged. If any of the above levels are hit I will be back with a new update for my Platinum Members.
March Dollar Index
The aggressive rally in equity markets on Friday morning led to me emailing my Platinum Members to exit any short Dollar position at my revised 104.70 T/P level and I am now flat. Today, I will again be a seller on any further rally to 105.00/105.60 with the same 106.10 ‘’Closing Stop’’.
Cash DAX
Lower Bund yields helped the DAX to rally over 1.50% on Friday. I am still flat as my buy range never came close to being triggered. Just like the FTSE I would not be surprised if the DAX makes a new all-time high over the coming weeks despite the ongoing worsening economic situation in Germany. One of the best rules that I learnt early in my trading career is a market that does not fall on bad news has to be respected. We have seen nothing but bad news from Germany since October, yet the DAX has now risen over 30%. Friday’s break and close over 15500 is bullish. I will now raise my buy level to 15380/15460 with a wider 15295 ‘’Closing Stop’’.
Cash FTSE
Although the FTSE closed positive on Friday, the price action was decidedly boring. Earlier the market hit my 7920 buy level. I am still long with the same 7970 T/P level. I will add to this position at 7850 while leaving my 7795 ‘’Closing Stop’’ unchanged. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The Dow has rallied 900 points since Thursday’s low, closing at 33390 on Friday. The next hurdle is the 50 Day Moving Average at 33528. Given we are short-term overbought I will be a small seller from 33600/33850 with a 34005 tight ‘’Closing Stop’’. We have support from 32850/33100. I will move my buy level to this area with a 32695 ‘’Closing Stop’’
Cash NASDAQ 100
Frustratingly, the NDX missed my initial 11960 buy level by 30 points before rallying over 300 points after Treasury Yields fell 11 Basis points on Friday afternoon. Poor Bears are again licking their wounds after Friday’s aggressive move higher. Unless the NDX breaks and closes below its 50 Day (11778) and 200 Day Moving Averages (11902) there is no point in trying to sell the market unless we get severely overbought again. The trend is higher as it has been all year despite the late February wobble. Today, I will raise my buy level to 12030/12180 with a 11895 ‘’Closing Stop’’.
March BUND
My latest 131.40 long Bund position worked well as the market rallied to my 132.10 T/P level and I am still flat. Despite Friday’s rally, the Bund is still severely oversold. We have support from 130.90/131.70 where I will again be a buyer with the same wider 129.95 ‘’Closing Stop’’.
Gold Rolling Contract
Gold surged on Friday, never coming close to my buy range and I am still flat. I will now raise my buy level to 1825/1840 with a higher 1809 ‘’Closing Stop’’.
Silver Rolling Contract
Silver continues to struggle, although we did close over $21. I am still long at 23.10 with the same no stop or T/P level. If this view changes I will be back with a new update for my Platinum Members.
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