U.S. Equity Markets surged Wednesday led again by the 1.76% gain in the NASDAQ 100. Despite the across the board gain the VIX also closed higher by 2.5%. Markets finished higher after an uneventful session that lacked major macroeconomic catalysts. Fed speak remained hawkish. Over the next two days, investor focus will be on Consumer Price Index (“CPI”) data from the U.S. Bureau of Labour Statistics, the University of Michigan Survey of Consumers’ inflation expectations, and earnings from Wall Street banking giants. As for earnings season in general, money managers are eyeing major earnings revisions as a headwind for stocks. Within the S&P 500 Index, all the 11 sectors finished higher. European Markets closed positive. Euro-Zone markets finished higher on the news that Russian President Vladimir Putin was open to talks on Ukraine. Like the markets stateside, the focus is also on earnings, with investors looking for any positives coming out of the holiday spending season. The European Central Bank (“ECB”) governing council member Mario Centeno said the current process of interest-rate increases is approaching its end. Meanwhile, ECB members Robert Holzmann and Olli Rehn said rates still are not close to, as ECB member Isabel Schnabel last put it, “sufficiently restrictive” levels. In the U.K., the Bank of England said banks should expect further scrutiny of credit-card portfolios. In Asia, Markets finished mixed on a cautious trading session that ended with the markets losing steam late in the day. Australian inflation and retail sales figures came in higher than expected, with housing and transport as the key drivers. Also in Australia, Chinese Ambassador Xiao Qian said Beijing will leave the door open to start talks on resolving the two nations’ current trade dispute. And analysts are bucking the trend on earnings expectations for the region, with Reuters reporting upgrades to 2023 estimates for Asian companies. Elsewhere, Oil rose 3.33% while Gold closed 0.23% higher.
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For anyone following my Platinum Service it made 55 points yesterday and is now ahead by 1973 points for January, after 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 1.28% higher at a price of 3969
The Dow Jones Industrial Average closed 268 points higher for a 0.80% gain at a price of 33,973.
The NASDAQ 100 closed 1.76% higher at a price of 11,402.
The Stoxx Europe 600 Index closed 0.38% higher.
Yesterday, the MSCI Asia Pacific rose 0.2%.
Yesterday, the Nikkei closed 1.03% higher at a price of 26,446
Currencies
The Bloomberg Dollar Spot Index closed 0.2% lower.
The Euro closed 0.2% higher at $1.0753.
The British Pound closed 0.1% lower at 1.2140.
The Japanese Yen fell 0.2% closing at $132.41.
Bonds
Germany’s 10-year yield closed 11 basis points lower at 2.17%.
Britain’s 10-year yield closed 15 basis points lower at 3.41%.
U.S.10 Year Treasury closed 8 basis points lower at 3.54%.
Commodities
West Texas Intermediate crude closed 3.33% higher at $77.49 a barrel.
Gold closed 0.23% higher at $1876.10 an ounce.
This morning on the economic front we have Euro-Zone Economic Bulletin at 9.00 am. This is followed by U.S CPI and Weekly Jobless Claims at 1.30 pm. Finally, we have a 30 Year Treasury Auction at 6.00 pm.
Cash S&P 500
It is annoying to have the correct view and still miss yesterday’s 60 Handle rally as the S&P missed my 3910 initial buy level with a 3912 low print. With all 11 S&P sectors closing higher the McClellan Oscillator closed in overbought territory with a +272 print. Normally I would go short here but the fact that we have CPI at 1.30 I would prefer to wait. However, given the overbought nature of the MO, I will be a small seller of the S&P from 4000/4020 with a 4035 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 3975. As I have buy levels below in both the NDX and Dow I will not have a buy level in the S&P as I want to see the CPI Report first.
EUR/USD
No Change. I am still a strong buyer on any dip lower to 1.0610/1.0680 with the same 1.0545 ‘’Closing Stop’’. Despite the positive price action, I still do not want to be short the Euro at this time.
March Dollar Index
No Change. I am still a small buyer on any further dip lower to 101.90/102.50 with the same 101.55 ‘’Closing Stop’’.
Cash DAX
The DAX has now rallied 26% since its October low. This is a massive move resulting in the market being severely overbought. Yesterday’s move higher saw the whole of my sell range triggered for a now 14960 average short position. I will leave my 15055 ‘’Closing Stop’’ unchanged while raising my T/P level to 14900.
Cash FTSE
No Change. Ahead of U.S. CPI I will not chase the FTSE higher leaving my 7610/7670 buy level unchanged with the same 7555 ‘’Closing Stop’’.
Dow Rolling Contract
Unlike the S&P and NDX, the Dow never came close to yesterday’s buy range and I am still flat. I will now raise my Dow buy level to 33470/33720 with a higher 33295 tight ‘’Closing Stop’’. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
Frustratingly, the NDX also just missed my initial buy level by just 12 points before surging over 250 points and I am still flat. We have had the correct view in buying the dip all January but with the MO closing at +272 last night I no longer want to be a buyer at these levels. As I am expecting CPI to fall hard this year I am also afraid to go short. The NDX has support from 11150/11300 where I will be a small buyer with a 11065 tight ‘’Closing Stop’’.
March BUND
My latest long 136.15 Bund position worked well as the market rallied to my too tight 136.70 T/P level and I am now flat. Subsequently, the Bund rallied a further 100 points, helped by the continued gains in the DAX. The Bund has support from 136.20.136.90 where I will again be a buyer with a 135.45 ‘’Closing Stop’’
Gold Rolling Contract
Gold traded has traded in a $10 for most of the week. I am still flat and will not chase the market higher ahead of today’s crucial CPI Report. I will leave my 1832/1847 buy level unchanged with the same tight 1819 ‘’Closing Stop’’ on this position.
Silver Rolling Contract
No Change. Silver traded in a narrow range again yesterday. I am still long at 24.00 with the same no stop policy. I will now lower my T/P level to 24.50.
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