Tame inflation data boosted U.S. Equity Markets, ending the day higher after a choppy session. The Dow was again the big winner, closing higher by 1.46%, helped by Boeing’s 6% gain. U.S. consumer price index (“CPI”) rose 0.4% on a month-over-month basis, in line with expectations. On a year-over-year basis, CPI rose 1.7%, matching estimates and below the Federal Reserve’s goal of 2% inflation. These data eased some of the recent fears of a spike in inflation. The data show that inflation is not an issue yet, allowing monetary policy to remain accommodative. On stimulus, the House of Representatives prepared a vote on the $1.9 trillion support bill. Treasury Secretary Janet Yellen said its ready to distribute coronavirus-aid cheques as quickly as possible, in order to have maximum economic impact. Vaccine news was also positive, on reports that the White House was planning to buy an additional 100 million doses of Johnson & Johnson’s COVID-19 vaccine. European Markets closed higher, led by the DAX which closed at a new all-time high. European Central Bank officials are said to be studying whether the recent rise in bond yields is unwarranted and requires immediate action, as its two-day policy meeting kicks off. French Industrial Production data for February were stronger than expected, rising versus January, and now sitting 1.7% below pre-pandemic levels. German Foreign Minister Heiko Maas said the country would prefer joint actions with the U.S. against China to protect their common interests and values. European Union coronavirus vaccinations rose to 42.7 million yesterday, with a daily average of 1.17 million doses administered over the last week. Elsewhere, Oil rose 1.23% after a reported large drawdown in U.S. gasoline inventories, implying future demand for crude, while Gold rose 0.5% on Dollar weakness.
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For anyone following my Platinum Service it made 155 points yesterday and is now ahead by 1588 points for March, having closed February with an impressive gain of 3286 points, having made 2077 points in January, 2273 points in December, 2025 points in November, 2779 points in October, 3042 points in September, 2383 points in August, 3128 points in July, 2580 points in June, 2456 points in May, 4773 points in April, and an incredible 9264 points in March. 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 0.60% higher at a price of 3898.
The Dow Jones Industrial Average closed 464 points higher for a 1.46% gain at a price of 32,297.
The NASDAQ 100 closed 0.33% higher at a price of 12,752.
The Stoxx Europe 600 Index closed 0.6% higher.
The MSCI Asia Pacific Index rose 0.1%.
This morning the Nikkei closed 0.60% higher at a price of 29,211.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% lower.
The Euro closed 0.4% higher at $1.1930.
The British Pound closed 0.8% higher at $1.3941.
The Japanese Yen closed 0.1% higher at 108.52 per dollar.
Bonds
Germany’s 10-year yield closed two basis points lower at -0.33%.
Britain’s 10-year yield closed one basis points lower at 0.71%.
US 10 Year Treasury closed three basis points lower at 1.51%.
Commodities
West Texas Intermediate crude closed 1.23% higher at $63.48 a barrel.
Gold closed 0.50% higher at $1,723.80 an ounce.
This afternoon on the Economic Front we have the ECB Rate Decision at 12.45 pm followed by the Lagarde Press Conference at 1.30 pm. In the U.S, President Biden is speaking at 1.00 pm and this is followed at 1.30 pm by the Weekly Jobless Claims. Finally, at 3.00 pm we have the JOLTS Job Openings at 3.00 pm.
March S&P 500
My S&P plan worked well with the market trading higher to my 3902 sell level before falling 20 Handles. This move lower enabled me to cover this position at my 3893 revised T/P level and I am now flat. With the Dow having closed at new all-time highs last night, again trading higher this morning, resulting in the S&P trading 25 Handles above last night’s Chicago close. I will now raise my buy level in the S&P to 3875/3890 with a higher 3863 ‘’Closing Stop’’. The S&P has further support from 3830/3845 where I will again be a buyer with a 3812 ‘’Closing Stop’’. We have resistance from 3945/3960 where I will be a small seller with a 3972 ‘’Closing Stop’’.
EUR/USD
The Euro rallied yesterday as the Dollar weakened across the board and I am still flat. I will now raise my buy level to 1.1860/1.1910 with a tight 1.1825 stop. I still do not want to be short the Euro at this time.
June Dollar Index
I am still flat and I will now lower my Dollar sell level to 92.15/92.55 with a lower 92.91 stop.
March DAX
This morning Germany reported its highest Coronavirus cases at 14,326 – the highest level since January 23 – reaffirming that the virus situation in Germany has reached a peak in terms of improvement. However, the DAX does not care surging to close at yet another new all-time high. This move higher saw my 14540 sell level triggered before dipping to my revised 14525 T/P level and I am now flat. The DAX is severely overbought with resistance coming in from 14650/14730 where I will again be a small seller with a 14805 stop. I would expect plenty of volatility in both the Euro and DAX after we get the rate decision and Lagarde press conference at 12.45 pm and 1.30 pm respectively.
March FTSE
The FTSE traded sideways to lower for most of yesterday before rallying to hit my 6740 sell level this morning. I am still short and I will now raise my T/P level to 6710 while lowering my stop to 6785. I will now raise my buy level to 6600/6650 with a 6555 stop. If I am taken long I will have a T/P level at 6685.
Dow Rolling Contract
The Divergence between the NASDAQ and Dow continues to widen, The Dow is now trading over 600 points higher from where I marked prices 24 hours ago while the NASDAQ is basically unchanged. We have seen these divergences many times over the years. Yesterday marked the 21st Anniversary when the NASDAQ Composite registered its intraday and closing highs, ending the dot-com mania era. The NASDAQ 100 held up for ten more days, peaking on March 24, 2000 along with the S&P 500. The NASDAQ crashed 78% over the following 31 months. It took the NASDAQ 15 years to match the high of March 2000. Current conditions are indicative of another mania as we now have a new ETF called the FOMO Exchange Traded Fund (Fear of Missing Out) as investors desperately chase the ‘’Everything Rally’’. I do not know when this mania will end but in my opinion every piece of good news is now priced into the market. The Dow has now rallied a staggering 14000 points since the 18100 low print on March 23, 2020. The Dow has strong resistance from 32580/32750 where I will be a seller with a 32925 ‘’Closing Stop’’. We have support from 31830/31980 where I will be a small buyer with a 31680 ‘’Fixed Stop’’.
March NASDAQ
My NASDAQ plan worked well with the market rallying to my 12940 sell level before falling 200 points. This move lower saw my 12890 revised T/P level filled and I am still flat. This morning the NASDAQ is back above 12900. We have resistance from 12990/13090 where I will be a seller with a 13205 wider ‘’Closing Stop’’. I still do not want to be long the NASDAQ at this time.
June BUND
There is no doubt that the ECB having been buying European Bond Markets over the past week as the Bund yield has fallen from -22 basis points to sit at -34 this morning. I am still flat the Bund and ahead of the ECB Meeting I will now raise my buy level to 170.50/171.05 with a 169.95 stop.
Gold Rolling Contract
Gold has rallied hard this week of the key 1680 support level and I am still flat. I still do not trust this move higher in Gold and my only interest in buying the market is still on a dip lower to 1689/1702 with a higher 1676 stop.
Silver Rolling Contract
I am still flat and I will now raise my buy level to 25.20/25.70 with a tight 24.85 stop.
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