U.S. Equity Markets finished Friday’s session in the red but well off their lows, led by the NASDAQ 100 closing the week with a loss of 1.41%. Anything can happen over the weekend when it comes to Russia. Thus, investors sold their long positions instead of holding on to them and possibly getting bad news this weekend. It is easier to buy back in on Monday, on a no-news day, than take a hit if markets gap lower on bad news. Chicago Federal Reserve President Charles Evans spooked markets as well. Evans said that he could see the central bank raising rates back near pre-pandemic levels (around 2%) this year. This would imply three or four more rate hikes than the market is currently pricing in. This accelerated the sell-off in the markets, as it could mean that the Fed tightens policy a lot quicker than currently expected. That wasn’t what investors wanted to hear, pushing stocks lower. Non-Farm Payroll data made the case for more rate hikes. The U.S. Bureau of Labour Statistics’ nonfarm payroll data showed 678,000 new hires last month compared with the expectation for 423,000 and the prior month’s upwardly revised 481,000. The numbers tell us the domestic economy continues to experience steady growth. The strong labour market is just another reason the Fed will begin its rate-hike cycle later this month. Within the S&P 500, six of the 11 sectors finished lower. European Markets closed sharply lower. Ukrainian Foreign Minister Dmytro Kuleba warned of a disaster worse than Chernobyl, saying Russian troops were firing on Europe’s largest nuclear power plant. Officials from Ukraine and Russia said they secured a temporary ceasefire and civilian evacuation corridors from besieged cities following the second round of negotiations. French President Emmanuel Macron said Russian President Vladimir Putin insists on a “demilitarization” of Ukraine as a precursor to ceasing hostilities. In Asia, Japanese Prime Minister Fumio Kishida said Bank of Japan Governor Haruhiko Kuroda’s successor should stick with the current 2% inflation target. China’s annual National People’s Congress commences on Saturday, where President Xi Jinping is expected to unfold strategies for rebuilding economic growth. Japanese Consumer Confidence Index data for February fell for the third straight month, falling to the lowest level since June, as coronavirus infections weighed. South Korea’s Consumer Price Index figures for February were stronger than anticipated, remaining above 3% since October. Elsewhere, Oil Jumped 7.53% on reports that the U.S. was considering a ban of Russian energy imports, while Gold rose 1.87% as investors continued to rotate out of risk assets and into safe havens.
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For anyone following my Platinum Service it made 430 points on Friday and is now ahead by 820 points for March. The Platinum Service made an impressive 5324 points gain in 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 0.79% lower at a price of 4328.
The Dow Jones Industrial Average closed 180 points lower for a 0.53% loss at a price of 33,614.
The NASDAQ 100 closed 1.41% lower at a price of 13,837.
The Stoxx Europe 600 Index closed 3.6% lower.
This morning, the MSCI Asia Pacific Index fell 1.4%.
This morning, the Nikkei closed 2.94% lower at a price of 25,221.
Currencies
The Bloomberg Dollar Spot Index closed 1.1% higher.
The Euro closed 1.3% lower at $1.0930.
The British Pound closed 1% lower at 1.3233.
The Japanese Yen rose 0.4%, closing at $114.85.
Bonds
Germany’s 10-year yield closed six basis points lower at 0.07%.
Britain’s 10-year yield closed nine basis points lower at 1.21%.
US 10 Year Treasury closed ten basis points lower 1.73%.
Commodities
West Texas Intermediate crude closed 7.53% higher at 115.68 a barrel, the highest level since 2008.
Gold closed 1.87% higher at $1,967.10 an ounce.
This morning on the Economic Front we already had the release of German Retail Sales Factory Orders which rose 2% versus +1.8% expected. Next, we have Euro-Zone Sentix Investor Confidence at 9.30 am. Finally, we have U.S. Consumer Credit at 8.00 pm.
Cash S&P 500
My S&P plan worked well with the market trading lower to my 4317 buy level before rallying following the stronger than expected NFP report to my 4341 revised T/P level as emailed to my Platinum Members. I stayed flat over the weekend as I have enough exposure with my long FTSE and DAX positions. Individual investors got more bullish last week. But bullish sentiment is still well off its historical average…In the week ending March 2, the American Association of Individual Investors (“AAII”) said that 30.4% of investors surveyed had a bullish outlook on markets. That is the third straight week of increasing bullishness. It is up from 23.4% last week and 19.2% in the week ending February 16. I like to look at these sentiment surveys from a contrarian perspective. When retail investors are overly bullish, I get cautious. And when investors are overly cautious, I like to take that as a bullish sign., because herd mentality leads people to chase at the top and sell at the bottom. Despite, the big increase in bullishness over the past few weeks, we are nowhere near peak euphoria. Over the past 12 months, the high for bullish sentiment was 56.9%. And the historical average is about 38%. In addition, this is still around some of the lowest levels since July of 2020. On the other hand, 41.4% of respondents said they were bearish which is well above the historical reading of 30.5%. It indicates that investors are still cautious on markets. That is quite a statement considering at the time, the American economy was just starting to recover from one of the worst contractions on record. This hints to me that Equity Markets are set to rally once we get some positive news out of the Ukraine. Right now, investors are coming off the least bullish readings in about five years. The February 16 reading of 19.2% was the lowest since May 2016. After that May 2016 reading, the S&P 500 Index rose 16% over the next 12 months. This marks the 15th-straight week of below-historical-average positive sentiment. Typically, these types of events are followed by above-average returns for the S&P 500 Index over the next six- and 12-month time horizons. Overnight, the S&P got hit hard again following European Indexes lower while Oil is trading 9% higher at $125 a barrel. Despite the DAX falling over 23% in the past few weeks, the S&P still trading 170 Handles above the low made last Thursday week. The S&P has support from 4210/4245 where I will again be a buyer with no stop. Given how oversold the markets are trading, I do not want to be short the S&P at this time.
EUR/USD
The Euro got hit hard on Friday, trading lower to my 1.0915 buy level. I am still long with a now lower 1.0950 T/P level. I will add to this trade at 1.0850 with no stop for now. If any of the above levels are hit I will come back with a new update for my Platinum Members.
March Dollar Index
No Change. The Dollar rallied 1% on Friday, trading at a price of 98.50 this morning. I am still short at 97.30 with the same 97.10 T/P level. I will have a stop at 99.05 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Cash DAX
I did not see this move lower in the DAX with the market falling over 13% in the last week, and is now trading 23% lower from its all-time high, made a few weeks ago. I bought the DAX again in small size on Friday at 13300, for a now 13500 average long position. This morning the DAX is trading lower at 12700. Wars can escalate fast. Look where we are today and where were 14 days ago. Where will we be 14 days from now? Russia continues to press on into Ukraine. However, it is suffering huge losses, allegedly now 11,000 men, and does not appear to hold vast new territory that it controls. The DAX is now the most oversold since 2008. I will stay long at 13500 for now with no stop, given it is only a small stake. I will not add to this trade today, especially with Oil trading at $125.
Cash FTSE
Just like the DAX above, I am long and wrong the FTSE at a price of 7160. This morning the FTSE is trading lower at 6920. I will add to this trade at 6810 and if this level is hit I will come back with a new update for my Platinum Members.
Dow Rolling Contract
My Dow plan worked well with the market trading lower to my 33450 buy level before rallying post the NFP release to my 34600 revised T/P level and I am now flat. The Dow had a nice rally into the close but this move higher was reversed shortly after the Futures Markets re-opened last night. The Dow has strong support from 32700/33050 where I will again be a buyer with no stop. If I am taken long, I will have a T/P level at 33390.
Cash NASDAQ 100
The NDX reversed afternoon, gains, hitting my second buy level at 13830 for a now 13905 average long position. I am still long with a now lower 13960 T/P level and if this level is triggered I will come back with an update for my Platinum Members.
March BUND
The Bund traded higher to my 169.70 T/P level on my 169.30 long position and I am now flat. This morning the Bund is trading higher at 171.00. We have support from 169.50/170.10 where I will be a small buyer with a 168.95 stop.
Gold Rolling Contract
Thankfully, I emailed my Platinum Members to cancel any sell level in Gold ahead of the weekend and I am still flat. This morning Gold is trading at 1992. I am going to stay flat as I want to see how Gold trades given how overbought the market is trading at this time.
Silver Rolling Contract
I am still flat Silver as the market again juts missed my buy level before rallying to sit at 25.80 this morning. I will now raise my buy level to 24.50/25.10 with a 23.85 stop.
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