U.S. Equity Markets Stocks continued the downward New Year trend after the Santa Rally towards the end of 2023 with the downside led by the Russell 2000. Crude prices saw upside on Wednesday with Geopolitical concerns still rife with Iran warning of a severe response to the terrorist attack that occurred on Wednesday. Meanwhile, Hezbollah has warned there will be no ceilings or rules to Hezbollah’s fighting if Israel wages war against Lebanon. In the US, the November JOLTS revealed further signs of a cooling labour market ahead of December’s Non-Farm Payrolls tomorrow, while the ISM Manufacturing PMI rose more than expected on the headline led by a jump in Unemployment, but New Orders and Prices declined, with the latter falling more than expected. The data led to a revision higher to the Q4 ’23 Atlanta Fed GDP estimate to 2.5% from 2.0% previously. The December FOMC Minutes were balanced but gave little indication of when rate cuts would start. The downbeat risk tone gave further support to the Dollar Index which rose above 102.50 although gains were capped by lower yields and the soft JOLTS report. Meanwhile, Bitcoin slumped on a report that suggested the Spot Bitcoin ETF will not be approved in January. The December Meeting Minutes had both dovish and hawkish aspects. The Minutes confirmed that members generally viewed the addition of the word “any” to comments on possible additional firming as relaying their judgement that rates were likely at or near the peak of the cycle. A number of participants highlighted uncertainty around how long restrictive policy would need to be maintained with participants pointing to downside risks the economy faces with an overly restrictive stance. Meanwhile, participants also noted that their outlooks were associated with an unusually elevated degree of uncertainty, and it was possible that the economy could evolve in a manner that would make further increases in the target range appropriate and several observed that circumstances might warrant keeping the policy rate at the current level for longer than currently anticipated. On the balance sheet, several suggested it would be appropriate to begin discussing the technical factors about slowing the balance sheet run-off, well before such a decision was reached. On the economy, participants forecast that upside risks to inflation have diminished, and several observed the ongoing rebalancing of labour supply and demand would help reduce core services inflation. Several also assesed that housing services inflation would fall further over time. Several on the FOMC noted that longer-term inflation expectations remained well anchored, and that near-term inflation expectations of households had declined recently. Many highlighted the decline in Job Openings and a few remarked on the lower quits rate, several said that the risk if the labour market could transition quickly from a gradual easing to a more abrupt downshift in conditions. Meanwhile, the staff economic outlook was broadly similar to the projection prepared for the prior meeting. There was little within the Minutes to suggest when rate cuts could start to occur, aside from what the SEP showed in December that almost all participants indicated their baseline implied a lower FFR would be appropriate by the end of the year. Elsewhere, Oil rose 3.3% while a stronger Dollar saw Gold fall a further 1.1%.
To mark my 2925th 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 245 points yesterday and is now ahead by 313 points for January. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 points, after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 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 0.80% lower at a price of 4704.
The Dow Jones Industrial Average closed 284 points lower for a 0.76% loss at a price of 37,430.
The NASDAQ 100 closed 1.06% lower at a price of 16,368.
The Stoxx Europe 600 Index closed 0.86% lower.
This morning, the MSCI Asia Pacific closed 0.3% higher.
This morning, the Nikkei closed 0.53% lower at a price of 33,288.
Currencies
The Bloomberg Dollar Spot Index closed 0.30% higher.
The Euro closed 0.2% lower at $1.0920.
The British Pound closed 0.3% higher at 1.2665.
The Japanese Yen fell 0.8% closing at $143.12.
Bonds
Germany’s 10-year yield closed 4 basis points lower at 2.03.
Britain’s 10-year yield closed 3 basis points higher at 3.67%.
U.S.10 Year Treasury closed 1 basis points lower 3.93%.
Commodities
West Texas Intermediate crude closed 3.3% higher at $72.70 a barrel.
Gold closed 1.1% lower at $2036.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Composite PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed by German CPI at 1.00 pm. Next we have the U.S. ADP Employment Change at 1.15 pm and Weekly Jobless Claims at 1.30 pm. Finally, we have the Composite PMI at 2.45 pm.
Cash S&P 500
My S&P plan worked well as the market traded lower to my 4707 buy level before rallying 15 Handles into the FOMC Minutes. This move higher saw my 4714 revised T/P level triggered as given the number of open positions, I wanted to be flat ahead of the Minutes. I am still flat. The S&P hit a post Minute high at 4727 before falling 25 Handles into the close. Overnight, the buy the dip sees the S&P trading at 4716 as I go to press. The S&P has short-term support from 4683/4698. I will be an aggressive buyer on any dip to this area with a wider 4669 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 4714. Ahead of Non-Farm Payrolls tomorrow, I do not want to be short the S&P. If this view changes I will be back with a new update for my Platinum Members.
EUR/USD
Weaker Equity Market saw the Euro trade lower to my second buy level at 1.0900 for a now 1.0935 average long position. I am still long with the same 1.0855 ‘’Closing Stop’’. I will now lower my T/P level to 1.0980. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
Just before the FOMC Minutes, the Dollar rallied to my 102.60 sell level with a 102.71 high print. I am still short. I will add to this position at 103.30 while leaving my 104.10 ‘’Closing Stop’’ unchanged. I will now raise my T/P level to 102.20. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
The DAX sold off after I posted yesterday morning, trading the whole of my buy range for a 16550 average long position, As so many of my calls had hit at the same time, to reduce risk I covered this long position at my revised 16570 T/P level as emailed to my Platinum Members and I am now flat. This morning the DAX is trading at 16560. The DAX has short term support from 16350/15440. I will be a strong buyer on any dip tom this area with a lower 16255 ‘’Closing Stop’’. I still do not want to be short the DAX at this time.
Cash FTSE
The FTSE continues to trade heavy, and I am still flat as the market never came close to yesterday’s sell range. With the FTSE trading lower at 7700 this morning, I will now lower my sell level to 7760/7820 with a lower 7895 ‘’Closing Stop’’. I still do not want to be long the FTSE at this time.
Dow Rolling Contract
I am still flat the Dow as the market never came close to yesterday’s sell range, trading at 37480 as I go to press. The 14-Day RSI finally closed slightly lower last night with a 67-print. I still cannot justify a long position at these elevated levels. Interestingly, the VIX closed higher by 6.5% yesterday at a price of 14.04. Both the 50 day and 200 day Moving Averages for the VIX are just above current prices at 14.33 and 15.96 respectively. These MAs have held since the October 27 low. Any break and close over 16 will see an aggressive sell-off in Equity Markets. This indicator we need to keep a close eye on. Today, I will now lower my Dow sell level to 37750/38000 with a lower 38205 ‘’Closing Stop’’.
Cash NASDAQ 100
The sell-off in tech stocks yesterday saw the NDX hit my buy level at 16410. I am still long and I will add to this position at 16270 while leaving my 16195 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 16480. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
This morning the Bund opened higher at my 137.80 sell level. We are selling off as I go to press allowing me to cover this short position here at 137.35 and I am now flat. Today, I will again be a seller on any further rally to 138.10/138.90 with a higher 139.65 ‘’Closing Stop’’. I still do not want to be long the Bund at this time.
Gold Rolling Contract
My Gold plan worked well as the market sold off to my 2036 buy level before rallying to my revised 2047 T/P level overnight and I am now flat. Gold has support from 2015/2030 where I will again be a buyer with a lower 1999 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Despite Silver falling 2.5% yesterday I still believe in the bull case for this precious metal. I will continue to hold my 24.40 average long position with no stop or T/P level for now.
Please Note: There will be no Daily Commentary tomorrow Friday. Any of my calls that are not hit today and are subsequently triggered tomorrow, will see me return with updated emails to my Platinum Members.
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