U.S. Equity Markets closed slightly higher after a volatile and mixed trading session where the NASDAQ closed lower by 0.40% while the Dow finished with a small gain of 0.12%. Stimulus remained in the news as Senate Majority Leader Charles Schumer set the wheels in motion to pass President Joe Biden’s $1.9 trillion Coronavirus aid bill via the reconciliation process. And the Biden administration is reportedly open to limiting income eligibility for the next round of stimulus cheques. This would be a possible way to get bipartisan support for the Bill. Earnings were also a driver yesterday after Alphabet (GOOGL) and Amazon (AMZN) reported on Tuesday night. These are two of the biggest companies in the world by market cap, so big moves in their price action can impact markets. They both reported strong quarters. Economic data were also positive. ADP Employment data showed that private employers added twice as many jobs as expected in January. This indicates that the job market is back heading in the right direction. European Markets closed higher for the third straight session. Former European Central Bank President Mario Draghi was summoned by Italian President Sergio Mattarella to try and form a new government. The European Union anticipates 300 million Coronavirus vaccine doses to be delivered in the second quarter as new supply from recently approved inoculations comes online. Markit Euro-Zone’s final composite purchasing mangers’ index (“PMI”) data for January rose versus the preliminary reading but fell versus December, as social-distancing restrictions continue to weigh on the services sector. Elsewhere, Oil again closed higher, by 1.86% after EIA data showed a continued drawdown in U.S. crude inventories, implying strong demand, while Bitcoin rose 3.23% after Guggenheim’s chief investment officer put a $600,000 price target on the cryptocurrency.
To mark my 2225th 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 295 points yesterday and is now ahead by 360 points for February, having finished January with a gain of 2077 points, 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 0.1% higher at a price of 3830.
The Dow Jones Industrial Average closed 36 points higher for a 0.12% gain at a price of 30,723.
The NASDAQ 100 closed 0.40% lower at a price of 13,402.
The Stoxx Europe 600 Index closed 0.5% higher.
The MSCI Asia Pacific Index fell 0.3%.
This morning, the Nikkei closed 1.06% lower at a price of 28,341.
Currencies
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.1% lower at $1.2015.
The British Pound closed 0.1% lower at $1.3648.
The Japanese Yen closed 0.1% lower at 105.18 per dollar.
Bonds
Germany’s 10-year yield closed one basis points higher at -0.46%.
Britain’s 10-year yield closed two basis points higher at 0.37%.
US 10 Year Treasury closed three basis points higher at 1.14%.
Commodities
West Texas Intermediate crude closed 1.86% higher at $55.34 a barrel.
Gold closed 0.1% lower at $1,833.20 an ounce.
This morning on the Economic Front we have UK Construction Output at 9.30 am and Euro-Zone Retail Sales at 10.00 am. This is followed by the Bank of England Rate Decision and Asset Purchase Facility. Finally, at 1.30 pm we have the latest U.S Weekly Jobless Claims, Non-Farm Productivity, Unit Labour Costs and Factory Orders.
March S&P 500
Although the VIX closed 10% lower yesterday as the market finally caught up with the massive rally for the U.S Indices this week. I am still concerned by the volatility in the VIX last week, and in particular on Wednesday when although the S&P only closed lower by 2.6%, the VIX surged an incredible 60% on a day when we were waiting for the FOMC Statement and Powell press conference. The price action is very similar to last February ahead of the 35% crash for the stock market in just 27 trading days. The 60% surge in the VIX was sheer panic and in my opinion is a clue as to what will happen over the coming weeks. As we know Central Banks will do everything in their power to prevent a crash but this is not time for complacency. To add to the mix, internally the market is weak with the McClellan Oscillator only closing in positive territory with a +16 print last night. This should not be happening when we have the main US Indices close to all-time highs. My game plan worked well yesterday as initially the S&P traded lower to my 3821 exit level on my 3814 short position for a 70 point loss. Subsequently the S&P traded lower to my 3810 buy level before rallying to my 3822 revised T/P level and I am now flat. Ahead of the Non-Farm Payrolls tomorrow I would expect any losses to be contained. Today I will again be a buyer from 3793/3808 with a wider 3778 stop. My only interest in selling the S&P is still on a further rally to 3863/3878 with the same 3891 stop.
EUR/USD
After the Euro traded lower to my 1.2005 buy level we had a small rally which allowed me to cover this position at my 1.2025 revised T/P level and I am now flat. The Euro has strong support from 1.1930/1.1980 where I will be an aggressive buyer with a 1.1885 stop.
March Dollar Index
I am still flat the Dollar as the market has not come close to my buy range. This morning the Dollar is trading higher at 91.30. We have strong resistance from 91.55/91.95 where I will be a seller with a 92.40 stop.
March DAX
The DAX continues to hold this week’s gains and I am still flat. I will now raise my sell level slightly to 14110/14200 with the same 14275 stop. I still do not trust this rally in the DAX and I will not chase the market higher. Therefore, I will continue to be a buyer on any dip lower to 13650/13730 with the same 13585 stop.
March FTSE
My FTSE plan worked well with the market trading lower to my 6450 buy level before rallying to my 6490 T/P level and I am now flat. The FTSE has support from 6385/6435 where I will again be a buyer with a tight 6340 stop.
Dow Rolling Contract
Despite the increase in volatility over the past week, yesterday was the fifth consecutive of contracting volume, a relatively rare event. This tells me that traders are nervous. Yesterday my Dow plan worked well with the market trading lower to my 30610 buy level before rallying to my revised 30675 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 30430/30590 with a tight 30295 stop. I still do not want to be short the Dow at this time especially as we are close to the 50 Day Moving Average, which comes in at 30377 this morning.
March NASDAQ
It took a while but finally the NASDAQ traded lower to my 13420 T/P level from Tuesday’s 13450 average short position and I am still flat. The NASDAQ has resistance from 13510/13600 where I will be a seller with a 13705 stop. The NASDAQ has strong support from 13220/13300 where I will be an aggressive buyer with a 13135 ‘’Closing Stop’’.
March BUND
No Change as I am still long at 176.70. I will continue to add to this position at 176.20 with the same 175.85 stop. I will leave my T/P level unchanged at 176.90 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Overnight Gold traded lower to my 1814 buy level before having a small rally to my 1819 revised T/P level and I am now flat. The 1800/1810 is key support for Gold. Technically a break and close below here opens up the possibility of a further move lower to the 1670 level. Today. I will be a buyer from 1790/1802 with a 1779 stop.
Silver Rolling Contract
Silver rallied to my 26.95 T/P level on my latest 26.70 long position and I am now flat. The Daily Sentiment Index hit 91% bulls on Monday so it was no wonder that we saw the strong subsequent sell-off in the market. Silver has support from 25.60/26.20 where I will again be a buyer with a 25.15 stop.
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