U.S. Indices closed lower on Wednesday following a trading session that saw two-way trade with upside in stocks seen throughout most of the US session before selling off in the afternoon into the closing bell to see indices close predominantly in the red, albeit Nasdaq was flat. The downside extended with US President Trump taking aim at two sectors in the US, housing and defence. The President announced he will ban large institutional investors from buying more single-family homes, weighing on the real estate sector and Blackstone (BX). Meanwhile, for Defence, Trump said he will not permit buybacks or dividends until problems, like slow production and maintenance, are fixed. T-notes were predominantly firmer with the curve flattening. Focus was largely on US data, which saw ADP Employment post job gains in December but short of analyst expectations, while the ISM Services PMI beat expectations. JOLTS, however, saw a notable drop below forecasts. Crude prices saw two-way trade but settled in the red with oil sales from Venezuela set to continue indefinitely with sanctions reduced as part of an agreement; Trump announced overnight Venezuela will be turning over between 30-50 million barrels of oil to the US, with sources later noting 50 million barrels will be sold in the first tranche. In FX, the Dollar saw gains against G10s with CAD lagging as crude prices fell. ISM Services for December rose to 54.4 from 52.6, and above the expected 52.3. Business activity rose to 56.0 (exp. 54.0, prev. 54.5), and Employment lifted back above 50 to 52.0 (exp. 48.7, prev. 48.9), printing in expansionary territory for the first time since May. New orders also impressed as it lifted to 57.9 from 52.9, well above the forecasted 52.2, with the inflationary gauge of prices paid encouragingly dipping to 64.3 (exp. 65.5, prev. 65.4), which is the slowest since April, indicating the bulk of the impact from tariffs may be in the rear-view. Overall, it was a strong report that continues to highlight the resilience of the US economy, especially in service-providing industries. Regarding new orders, the pace of expansion was the fastest in over a year and indicates the momentum should be carried into the new year. The November JOLTS report was soft. The headline fell to 7.146 million from 7.449 million (revised down from 7.67 million), despite expectations for a rise to 7.60 million. Within the report, the vacancy rate eased to 4.3% from 4.5%. Quits rose to 3.161 million from 2.973 million, with the quits rate rising to 2% from 1.9%. The hiring rate declined to 3.2% from 3.4%, with the separation rate unchanged at 3.2%. Summarising the data, Pantheon Macroeconomics notes rock-bottom hiring, but with layoffs also still low, it continues the low hiring, low firing economy seen recently. The consultancy notes that the report suggests “the FOMC still needs to ease policy further in order to prevent the unemployment rate from rising further and inflation eventually sliding below the 2% target”. Elsewhere, Oil closed higher by 0.6% while Gold ended a volatile session with a loss of 0.45%.
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For anyone following my Platinum Service it made 140 points yesterday and is now ahead by 605 points for January having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 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 0.34% lower at a price of 6920.
The Dow Jones Industrial Average closed 466 points lower for a 0.94% loss at a price of 48,996.
The NASDAQ 100 closed 0.06% higher at a price of 25,653.
The Stoxx Europe 600 Index closed 0.05% lower.
This Morning, the MSCI Asia Pacific closed 0.4% lower.
This Morning, the Nikkei closed 1.19% lower at a price of 51,342.
Currencies
The Bloomberg Dollar Spot Index closed 0.04% higher.
The Euro closed 0.03% lower at $1.1688.
The British Pound closed 0.19% lower at $1.3472.
The Japanese Yen rose 0.08% closing at $156.63
Bonds
U.K.’s 10-Year Gilt closed 7 basis points lower at 4.42%.
Germany’s 10-Year Bund Yield closed 4 basis points lower at 2.81%
U.S.10 Year Treasury closed 5 basis points higher at 4.13%.
Commodities
West Texas Intermediate crude closed 0.59% higher at $56.32 a barrel.
Gold closed 0.45% lower at $4435.10 an ounce.
This morning on the Economic Front we have German Factory Orders at 7.00 am. This is followed by Euro-Zone PPI, Consumer Confidence and the Unemployment Rate at 10.00 am. Next, we have U.S. Weekly Jobless Claims and the Trade Balance at 1.30 pm, followed by Wholesale Inventories at 3.00 pm. Finally, we have the New York Fed 1-year Consumer Inflation Expectations at 4.00 pm.
Cash S&P 500
The S&P 500 closed 0.34% lower on Wednesday. The index now appears to be forming a potential reversal after attempting to break out to a new high. Instead, it reversed lower and closed the session back near support at 6,920. A failure to push through the 6,950 area, followed by a drop below 6,920, would open a path toward 6,835. More importantly, the index has done very little since late October, and such a move would also put it at risk of breaking the uptrend that formed off the November 21 lows. As a result, the index is in a more vulnerable position than it may appear at first glance. BTIC S&P 500 Total Return Futures (EFFR) finished lower again yesterday for the December 2026 contracts, at their lowest level since March 2024. While some may view this as bullish because financing costs are falling, one would have difficulty finding a time when the S&P 500 has risen, as these futures contracts were falling. At least that is what I have observed. This, to me, is outright bearish and a sign that demand for leverage is slipping or positions are being closed. Implied volatility rose yesterday ahead of Friday’s jobs report and the Supreme Court’s opinion releases, which may include a decision on tariffs. Kalshi assigns a 30% probability that the Court rules in favor of the tariffs, implying a 70% chance they are struck down. I would expect implied volatility to continue rising into this news event. The VIX 1-day is likely to be materially higher by this evening and may even continue to rise after the jobs report, since the Court’s rulings are expected later in the day. A VIX 1-day reading in the 15 to 20 range seems highly likely, in my view. Wednesday’s sell-off saw the S&P hit my 6924 T/P level on my latest 6938 average short position and I am now flat. Today, I will again be a seller from 6935/6960 with a higher 6978 ‘Closing Stop’. If I am taken short, I will have a T/P level at 6910. I still do not want to be long the S&P at this time.
EUR/USD
I am still flat as the Euro never came close to Wednesday’s sell range. Today, I will lower my sell level to 1.1740/1.1820 with a lower 1.1895 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1685. I still do not want to be long the Euro at this time.
Dollar Index
The Dollar traded in a narrow range on Wednesday and I am still flat. The Dollar has support below from 97.40/98.20 where I will be a small buyer with the same 96.85 ‘Closing Stop’. If I am taken long, I will have a T/P level at 98.70.
Russell 2000
I am still short the Russell from Monday at a price of 2550 with the same 2510 T/P level. I will continue to look to add to this trade on any further move higher to 2610 while leaving my 2655 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
I am still flat as the FTSE traded lower before coming anywhere near Wednesday’s sell range. Today, I will lower my sell level to 10100/10200 with a lower 10305 ‘Closing Stop’. If I am taken short, I will have a T/P level at 10030.
Dow Rolling Contract
Frustrating! The Dow reversed all of Tuesday’s gains, falling over 700 points from its latest 49600 new all-time high and is now back to where I was short on Monday. Today, I will lower my sell level to 49500/49800 with a lower 50005 ‘Closing Stop’ If I am taken short, I will have a T/P level at 49230.
Cash NASDAQ 100
I am still short the NDX at a price of 25650 with the same 25510 T/P level. I will add to this position at 25850 while leaving my 26005 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
The Bund never came close to Wednesday’s buy range and I am still flat. Today, I will raise my buy level to 126.60/127.40 with a higher 125.85 ‘Closing Stop’. If I am taken long, I will have a T/P level at 127.90. I still do not want to be short the Bund at this time.
Gold Rolling Contract
No Change: I am still flat Gold and I am going to stay flat as I still have no edge at these price levels. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
I am still flat. Wednesday saw plenty of two-way volatility before a late sell-off saw Silver close below 78. Today, I will now lower my sell level to 80.30/82.30 with a lower 84.05 ‘Closing Stop’. If I am taken short, I will have a T/P level at 78.70.
Please Note: There will be no Daily Commentary tomorrow. Any of my calls that are not executed today and are subsequently triggered on Friday will see me return with updated emails for my Platinum Members.
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