U.S. Equity Markets closed mixed. While the Dow closed lower by a further 0.26% the small Cap Russell 2000 ended Wednesday with a gain of 0.38%. The quiet session saw the VIX close lower by 2.54% while internally the market was strong as reflected by the McClellan Oscillator which improved to close at -211 last night. Minutes from the Federal Reserve’s February meeting showed that the central bank is taking cautious steps in its rate policy. It believes that inflationary risk outweighs the possibility of tightening rates too far. St Louis Fed President James Bullard reiterated that he expects more rate hikes. He thinks a soft-landing could be imminent even if the central bank raises rates to at least 5.375% given the strength of the labour market. Investors increasingly believe that the Fed will be forced to raise interest rates to a higher peak and hold them at that level for much of the year. According to a survey of economists by Bloomberg, forecasters raised projections for the personal consumption expenditures price index. The Index anticipates Friday’s January report will show inflation remained stubbornly high to start the year. Within the S&P 500 Index, nine of the 11 sectors finished lower. European Markets again closed lower. The German IFO for February rose to 88.5, improving for the fifth month in a row. Investor sentiment also rose off the heels of greater optimism within the energy and services sectors. French Business Confidence for February showed a slight improvement over the previous month with confidence growing most notably in the services and retail sectors. ECB President Christine Lagarde said it is committed to bringing inflation growth back to target. And it will raise interest rates by 50 basis points in March to 3%. Investors are increasing bets that the ECB will raise interest rates to an all-time high following a multitude of better-than-expected economic data points from the region. In Asia, China has urged state-owned firms to end dealings with the four biggest international accounting firms, furthering the decoupling of international relations between itself and the U.S. within certain competitive private sector areas. Chinese President Xi Jinping is said to be preparing for a summit in Moscow with Russian President Vladimir Putin as part of a push for peace talks with Ukraine. Bank of Japan board member Naoki Tamura said it will need to review monetary policy in the near future, stoking speculation of pending interest-rate hikes. Elsewhere, Oil fell 3.26% while Gold closed lower by 0.43%.
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For anyone following my Platinum Service it made 140 points yesterday and is now ahead by 2014 points for February 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 0.16% lower at a price of 3991
The Dow Jones Industrial Average closed 84 points lower for a 0.26% loss at a price of 33,045.
The NASDAQ 100 closed 0.05% higher at a price of 12,066.
The Stoxx Europe 600 Index closed 0.33% lower.
Yesterday, the MSCI Asia Pacific fell 0.8%.
Yesterday, the Nikkei closed 1.34% lower at a price of 27,104.
Currencies
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.3% lower at $1.0608.
The British Pound closed 0.4% lower at 1.2046.
The Japanese Yen fell 0.1% closing at $134.94.
Bonds
Germany’s 10-year yield closed 3 basis points lower at 2.52%.
Britain’s 10-year yield closed 1 basis points lower at 3.60%.
U.S.10 Year Treasury closed 4 basis points lower at 3.93%.
Commodities
West Texas Intermediate crude closed 3.26% lower at $73.87 a barrel.
Gold closed 0.43% lower at $1825.10 an ounce.
This morning on the Economic Front we have Euro-Zone CPI at 10.00 am. This is followed by U.S. Chicago Fed National Activity Index, Weekly Jobless Claims and GDP at 1.30 pm. Finally, we have the Kansas City Fed Manufacturing Activity Index at 4.00 pm.
Cash S&P 500
Although the S&P finally made a new low near the close yesterday it was immediately bought by investors with the one-minute chart showing an aggressive move higher into the Chicago close. This move has continued in overnight with the S&P now trading at 4008 – 32 Handles higher than the pre-close low. Internally the market was strong as shown by the McClellan Oscillator which improved from Tuesday’s -250 print to close last night at -211. Given the seasonality and the more oversold readings Bears are again running out of room to see a more meaningful correction. After yesterday’s Fed Minutes focus will now turn to every inflation report over the next few weeks starting with the PCE reading tomorrow. In Contrast to Tuesday, my S&P plan worked well as after we hit my 3978 buy level, we had a nice 30 Handle rally. This move higher enabled me to cover this position at my 3992 revised T/P level and I am now flat. Today, I will again be a strong buyer from 3958/3978 with no stop. If I am taken long, I will have a T/P level at 3998. I still do not want to be short the market at this time.
EUR/USD
The sell-off in Equity Markets saw the Euro hit my second buy level at 1.0600 for a now 1.0635 average long position. I will leave my 1.0545 ‘’Closing Stop’’ unchanged while lowering my T/P level on this position to 1.0700. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
March Dollar Index
No Change. I am still a seller on any rally higher to 104.70/105.30 with the same 105.75 ‘’Closing Stop’’. I no longer want to be long the Dollar at this time.
Cash DAX
No Change. Anyone trying to short the DAX is left frustrated as any accrued profit quickly evaporates given the level of buying on any dip. This was evident again in yesterday’s session. I am still flat. The price action keeps telling me there is no point in being short unless the DAX breaks and closes below 15,000 for two consecutive trading sessions. Today, I will still be a small buyer from 15100/15180 with a wider 14995 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 15265.
Cash FTSE
The FTSE finally saw a small sell-off yesterday having traded near all-time highs for the past week. Yesterday’s move lower now has me long at 7900. I will add to this position at 7830 while leaving my tight 7795 ‘’Closing Stop’’ unchanged. I will now lower my T/P level on this position to 7955.
Dow Rolling Contract
No Change. I am still flat the Dow as the market was not able to get any positive price action yesterday following Tuesday’s aggressive 700-point decline. We are still trading below the 50-Day Moving Average (33620). As a result, I will continue to be a small seller from 33550/33800 with a tight 33905 ‘’Fixed Stop’’. If I am taken short, I will have a T/P level at 33370. I do not want to be long the Dow at this time.
Cash NASDAQ 100
No Change. I am still long the NDX at an average rate of 12130. The NDX was the strongest of the three American Indexes that I cover. The NDX is severely oversold. I will continue to hold this long position with the same 11895 ‘’Closing Stop’’. I will also lower my T/P level to 12200. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
March BUND
Following Tuesday’s aggressive sell-off the Bund traded in a narrow range yesterday and I am still flat. Ahead of today’s GDP print I will leave my 132.60/133.30 buy level unchanged with the same 131.95 ‘’Closing Stop’’.
Gold Rolling Contract
I am still flat Gold as the market sits $5 above yesterday’s buy range. I do not like the price action in Gold but I am not confident enough to go short. As I continue to have a large, long position in Silver, I will now lower my Gold buy level to 1798/1813 with a lower 1787 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. Silver has traded sideways since we saw the market fall 3%,10 days ago. I am still convinced that it is only a matter of time before Silver takes out the key 24.00/25.00 resistance area. Remember in May 2011, Silver was trading above $50. I am still long at an average rate of 23.10 with the same no stop policy. I will leave my T/P level unchanged at 23.50. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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