Despite a 7% print in American CPI, U.S. Equity Markets finished yesterday’s session higher, led by the 0.38% gain in the NASDAQ 100. December’s Consumer Price Index (“CPI”) reading matched estimates on a year-over-year basis, while coming in ahead of expectations on a month-over-month basis. Importantly, the data was below Wall Street’s unofficial estimate (the “whisper” number). So while the reading seems high, it was not as bad as many on the Street had feared. That is why we saw markets rise despite the inflation print. The Federal Reserve remained in focus, with Cleveland Fed President Loretta Mester saying she would support a March rate hike, joining other Fed Presidents. There was also positive news on the COVID-19 Omicron variant, with reports that the wave of cases has peaked in the U.K. and could do so in the U.S. next week. If that were to happen, with lower hospitalisations and deaths, this wave could pass without a drastic impact on the economy. Within the S&P 500, 10 of the 11 sectors finished higher. Euro-Zone Industrial Production figures for November were stronger than expected, rising from October as Irish activity rebounded. German financial authorities told banks they must rebuild a capital buffer of $25 billion by February of next year, after allowing it to be depleted for pandemic spending. European Central Bank Governing Council member Martins Kazaks reiterated that the bank is prepared to adjust policy action if inflation remains persistently high. In Asia, China’s Producer Price Index (“PPI”) and CPI numbers for December were weaker than expected, falling from November, as commodity and food costs slid. Japan’s government was said to prepare subsidy qualification rules requiring semiconductor manufacturers to maintain domestic production for 10 years to boost supply. Bank of Japan Governor Haruhiko Kuroda said the country’s economy is rebounding gradually and he expects inflation to increase over the long term. Australia’s job vacancies for the September to November time frame surged back into positive territory as businesses reopening from COVID-19 restrictions sought employees. Elsewhere, Oil rose 1.67% on a larger-than-expected decline in U.S. crude inventories, while Gold consolidated Tuesday’s close above $1800 with a 0.47% gain.
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 140 points yesterday and is now ahead by 674 points for January, after ending December with a loss of 932 points, 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 0.28% higher at a price of 4726.
The Dow Jones Industrial Average closed 38 points higher for a 0.11% gain at a price of 36,290.
The NASDAQ 100 closed 0.38% higher at a price of 15,905.
The Stoxx Europe 600 Index closed 0.4% higher.
Yesterday, the MSCI Asia Pacific Index rose 0.8%.
Yesterday, the Nikkei closed 1.92% higher at a price of 28,765.
Currencies
The Bloomberg Dollar Spot Index closed 0.7% lower.
The Euro closed 0.7% higher at $1.1448.
The British Pound closed 0.6% higher at 1.3710.
The Japanese Yen rose 0.7%, closing at $114.53.
Bonds
Germany’s 10-year yield closed four basis points lower at -0.06%.
Britain’s 10-year yield closed three basis points lower at 1.14%.
US 10 Year Treasury closed one basis points higher at 1.74%.
Commodities
West Texas Intermediate crude closed 1.67% higher at $82.57 a barrel.
Gold closed 0.47% higher at $1,828.10 an ounce.
This morning on the Economic Front we have Euro-Zone Economic Bulletin at 9.00 am. This is followed by U.S. Weekly Jobless Claims and PPI at 1.30 pm. Finally, we have a speech from Fed Member Brainard at 3.00 pm.
Cash S&P 500
My S&P plan worked well with the market trading higher to my 4746 sell level before selling off to my 4732 T/P level and I am now flat. Yesterday was the quietest trading session for the year so far. Yesterday’s post CPI high print at 4748 saw the S&P rally almost 170 Handles off Monday afternoon’s low print as yet again anyone trying to short the market for any length of time gets slammed. The recent 5% sell-off in the S&P has nearly been fully recovered. One more new high in the Fed’s Balance Sheet should do the trick. UBS made a valid point yesterday saying ‘’ And at this point in time they are still printing. So you must be wondering why they are still printing at this level, right?” This is very true when we have wages north of 4.5% while the Fed Funds Rate is just above Zero. This is an insane situation in my opinion as most traders are still long this market at valuation levels that are at an all-time high. However, we have to be nimble and respect the price action The S&P is comfortably trading above its 50-Day Moving Average and this price of 4680 should attract plenty of buying on any test. I will now raise my buy level to 4670/4685 with a tight 4659 stop. The S&P has resistance from 4750/4765 where I will again be an aggressive seller with the same 4776 stop.
EUR/USD
Despite a 7% print in CPI, the Euro rallied 0.7% yesterday and I am still flat as thankfully we had no sell level in the market. The Euro has strong support from 1.1360/1.1405 and I will move my buy level to this area with a 1.1315 tight stop. If I am taken long I will have a T/P level at 1.1445. I still do not want to be short the Euro at this time.
March Dollar Index
The Dollar got hit hard yesterday, hitting my 95.00 buy level. I am still long and I will now add to this trade at 94.40 while lowering my stop to 93.95. I will also lower my T/P level to 95.30. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Cash DAX
The positive price action for the DAX continues with the market closing back above the 16000 level. The ECB will not let you be short European Indexes as they show no sign of ending their insane Bond Buying programme anytime soon. The Bundesbank are not happy with this scenario and I expect ongoing tensions to increase especially if we see no easing of Inflation over the coming weeks. I am still flat the DAX and today I will raise my buy level to 15810/15890 with a tight 15745 stop. I still do not want to be short the DAX at this time.
Cash FTSE
The FTSE again traded in a narrow range and I am still flat. The FTSE is getting overbought. We have short-term resistance from 7595/7645 where I will be a small seller with a 7705 wider stop. I no longer want to be long the FTSE at this time.
Dow Rolling Contract
No Change. Ahead of this afternoon’s PPI release I am reluctant to go short the Dow unless we traded back to the 37000 area over the coming days. The Dow has support from 35820/36020 where I will be a small buyer with a 35625 wider stop. If I am taken long I will have a T/P level at 36170.
Cash NASDAQ 100
No Change. I will still look to buy the market on any dip lower to from 15420/15650 with a 15295 wider stop. The 50 Day MA comes in above the market at 16146 and this area should act as strong resistance on any initial attempt. For this reason I will be an aggressive seller from 16100/16200 with the same 16305 stop. If I am taken long I will have a T/P level at 15730. If I am taken short I will have a T/P level at 16020.
March BUND
The Bund just missed my 169.40 buy level before rallying to close higher at 170.18. I will now raise my buy level to 169.10/169.60 while leaving my 168.55 stop unchanged. If I am taken long I will have a T/P level at 169.95.
Gold Rolling Contract
Gold consolidated Tuesday’s break above 1810 and I am still flat. I will again raise my buy level to 1791/1806 with a higher 1779 stop.
Silver Rolling Contract
Silver again missed my buy level and I am still flat. I will now raise my buy level to 21.95/22.65 with a higher 21.25 stop. If I am taken long I will have a T/P level at 23.05.
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