U.S. Equity Markets finished the day lower after getting slammed following the release of the FOMC Minutes. It was an ugly session with the NDX leading the declines with a loss of 3.13%. Economic data was positive in the early morning – ADP Employment change data showed that private employers added more than 800,000 jobs in December. That was more than double the Wall Street estimate and marked the 12th straight month of job gains. Still, the trend of higher yields had investors pushing markets lower… Bears are trying to push the narrative that higher bond yields could choke off the economic recovery, especially among technology companies. The market downturn accelerated after the Federal Reserve’s Minutes from the December meeting, which showed that some Fed members said that the central bank could raise rates before the labour market reaches “full employment.” This likely spooked investors, as it could indicate that the Fed tightens policy sooner than expected. Within the S&P 500, all 11 sectors finished lower. European Markets closed higher. It was all positive news across Europe… French Consumer Confidence figures for December were stronger than expected, rising versus November, as individuals were increasingly optimistic about their income potential. European Central Bank Governing Council member François Villeroy de Galhau said Euro-Zone inflation was close to its peak, adding it would fall back closer to the 2% target. The British government said current health data regarding COVID-19 Omicron infections don’t suggest the need for more stringent social-distancing restrictions. In Asia, China state-run media outlet China Securities Journal suggested the government could ease monetary policy ahead of the New Year holiday that begins January 31, due to a cash crunch. Japanese Prime Minister Fumio Kishida said the government would soon introduce a five-year plan to support domestic capitalism and start-ups. The People’s Bank of China drained almost $32 billion in funds from the financial system, bringing the two-day total to around $73 billion. South Korea’s government vowed to keep a close watch on the rising risk for credit problems brought on by COVID-19-driven borrowing. Elsewhere, Oil rose 1.11% as U.S. crude inventories fell again, implying lower supply, while Bitcoin fell over 6% on little news.
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For anyone following my Platinum Service it made lost 355 points yesterday and is now down 217 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 1.94% lower at a price of 4700.
The Dow Jones Industrial Average closed 392 points lower for a 1.07% loss at a price of 36,407.
The NASDAQ 100 closed 3.12% lower at a price of 15,771.
The Stoxx Europe 600 Index closed 0.3% higher.
This morning, the MSCI Asia Pacific Index fell 1.3%.
This morning, the Nikkei closed 2.46% lower at a price of 28,611.
Currencies
The Bloomberg Dollar Spot Index closed 0.1% lower.
The Euro closed 0.1% higher at $1.1312.
The British Pound closed 0.1% higher at 1.3532.
The Japanese Yen rose 0.1%, closing at $115.82.
Bonds
Germany’s 10-year yield closed one basis points higher at -0.12%.
Britain’s 10-year yield closed one basis points higher at 1.10%.
US 10 Year Treasury closed seven basis points higher at 1.73%.
Commodities
West Texas Intermediate crude closed 1.12% higher at $77.55 a barrel.
Gold closed 0.35% lower at $1,803.10 an ounce.
This morning on the Economic Front we already had the release of German Factory Orders which came in higher than expected with a +3.7% print. At 9.30 am we have U.K. Markit Services PMI and this is followed by Euro-Zone Producer Prices Index at 10.00 am. Next, we have German CPI at 1.00 pm and U.S Weekly Jobless Claims and the Trade Balance at 1.30 pm. Finally, we have ISM Services PMI and Factory Orders at 3.00 pm.
Cash S&P 500
It has been a volatile start to the New Year with the S&P trading anywhere from 50 to 100 Handles for the three trading sessions this week. As a result, the VIX has soared, closing higher by 17% yesterday at a price of 19.73. This is significant as it is now back above its 50 and 200 Day Moving Averages. Overnight the S&P tested the 50 Day Moving Average (4669), with a low so far at trading at 4676 before rebounding to sit at 4698 as I go to press. My S&P plan did not work well yesterday as the market having just missed my 4805 sell level, traded the whole of my buy range for a 4749 average long position before stopping me out at 4729 and I am now flat. The break and close below 4720 could be significant. Today, I will be a small seller from 4722/4739 with a 4751 Stop. The S&P has strong support from 4630/4655 where I will be an aggressive buyer with a 4609 stop. If I am taken short I will have a T/P level at 4708. If I am taken long I will have a T/P level at 4669.
EUR/USD
No Change. I am still a buyer on any dip lower to 1.1200/1.1250 with the same 1.1155 stop. I will not chase the Euro lower, leaving my 1.1405/1.1455 sell level unchanged with the same 1.1501 stop.
March Dollar Index
The Dollar again traded in a narrow range, just missing my initial 95.80 buy level before rallying 30 points into the New York close. Today, I will continue to be a buyer on any dip lower to 95.20/95.70 with the same 94.95 stop. If I am taken long I will have a T/P level at 96.00.
Cash DAX
The DAX having made a new all-time high at 16300 yesterday, before falling 300 points. This move higher saw my 16270 sell level triggered before unfortunately covering this position at 16245 ahead of the FOMC Minutes and I am still flat. The DAX has strong support from 15780/15880 where I will be an aggressive buyer with a 15695 stop. The DAX is still overbought. It is difficult to be short given the insane QE Policy from the ECB which unlike the Fed has no intention of stopping for now. The DAX has further resistance from 16240/16320 where I will be a small seller with a 16405 tight stop.
Cash FTSE
Frustratingly, the FTSE missed my initial 7535 sell level by six points before trading to an overnight low of 7398 and I am still flat. I will now lower my sell level to 7480/7530 with a 7571 tight stop. Meanwhile, I will leave my 7320/7370 buy level unchanged with the same 7265 stop.
Dow Rolling Contract
The Dow tested Tuesday’s 36935 all-time high before getting hit hard after the FOMC Minutes were released. This move lower saw the whole of my buy range filled and I am now long at an average rate of 36425. I will now lower my T/P level to 36510 while leaving my 36195 stop unchanged. The Dow has strong resistance from 36900/37200 and I will continue to be a seller on any spike to this area with the same 37455 wider stop. If I am taken short I will have a T/P level at 36740.
Cash NASDAQ 100
The NDX has now fallen over 8% from Tuesday’s latest all-time high. Higher Bond Yields are weighing on Technology Stocks and I have called this market wrong again yesterday, getting stopped out of my 15975 long position near the close at 15795 and I am still flat. The NDX has strong support below from 15300/15450 where I will again be an aggressive buyer with a 15195 stop. If I am taken long I will have a T/P level at 15690.
March BUND
This morning the Bund is opening lower on the back of the spike overnight in U.S. Bond Yields. I am still flat and I will now lower my buy level to 169.20/169.70 with a 168.75 wider stop. If I am taken long I will have a T/P level at 170.18.
Gold Rolling Contract
No Change as the boring sideways price action shows no sign of ending. Therefore, I will leave my 1767/1782 buy level unchanged with the same 1755 stop.
Silver Rolling Contract
I am still flat as Silver is selling off as I go to press. I will now lower my buy level to 21.30/21.90 with a lower 20.75 stop. If I am taken long I will have a T/P level at 22.35.
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