U.S. Equity Markets finished Monday mixed after a volatile session that saw plenty of two-way price action, resulting in the VIX ending yesterday with a gain of 4%. Markets finished mostly higher after hawkish-leaning Fed-speak continued to maintain its stance of higher interest rates with no indication of pausing anytime soon. Economists continue to note risks around a Federal Reserve policy mistake while investors continue to flag Fed pushback against looser financial conditions. However, there is still a lot of traction for a bullish narrative driven by “soft landing” hopes with signs of disinflation leading the way. The New York Fed Survey of Consumer Expectations showed the lowest one-year inflation expectations since July 2021. The Manheim Used Vehicle Index rose slightly from last month, but still registered its largest annual decline in history (negative 14.9%). Looking forward, investors are playing a waiting game ahead of Consumer Price Index on Thursday and Michigan inflation expectations and bank earnings on Friday. Within the S&P 500 Index, six of the 11 sectors finished lower. European Markets again closed higher. Euro-Zone markets finished higher with investor morale rising for the third straight month, according to the Euro-Zone Sentix Investor Confidence Index for January. German Industrial Production rebounded in November, but a Reuters report foreshadowed a gloomy 2023 with 40% of German companies expecting a contraction in overall output. Eurostat said the Euro-Zone Unemployment rate in November was 6.5% – the same as October – and in line with consensus forecasts. Investors reacted cautiously. Fears are growing that a tight labour market and surging wage growth projections would pose a risk for further rate hikes from the European Central Bank. In Asia, Markets ended mostly higher as follow-through effects from Friday’s U.S. rally gained momentum. The big story continues to follow China, adding to its economic support measures for the property market and larger economy. The top 100 major developers reported 33% annual growth in financing for December as Beijing relaxed restrictions nationwide. Additionally, China reported an influx of travellers after border crossing restrictions eased on Sunday. Following the extended fiscal support from Beijing, major cities are forecasting annual growth targets north of 5% for the year. Elsewhere, Taiwan’s exports decline continues as rising interest rates effects on global demand keeps hitting the nation hard. In an interview Sunday, Japanese Prime Minister Fumio Kishida said the government and Bank of Japan must discuss its relationship in economic policy. This comes after his announcement of a new governor in April. Elsewhere, Oil rose 1.53% while Gold rallied 0.33% on a weaker Dollar.
To mark my 2700th 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 270 points yesterday and is now ahead by 1543 points for January, after 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 0.03% lower at a price of 3892
The Dow Jones Industrial Average closed 112 points lower for a 0.34% loss at a price of 33,517.
The NASDAQ 100 closed 0.62% higher at a price of 11,108.
The Stoxx Europe 600 Index closed 1.0% higher.
Yesterday, the MSCI Asia Pacific rose 0.8%.
Yesterday, the Nikkei closed 0.59% higher at a price of 25,973
Currencies
The Bloomberg Dollar Spot Index closed 0.7% lower.
The Euro closed 0.8% higher at $1.0742.
The British Pound closed 0.7% higher at 1.2175.
The Japanese Yen rose 0.2% closing at $131.85.
Bonds
Germany’s 10-year yield closed 1 basis points higher at 2.22%.
Britain’s 10-year yield closed 6 basis points higher at 3.53%.
U.S.10 Year Treasury closed 3 basis points lower at 3.53%.
Commodities
West Texas Intermediate crude closed 1.53% higher at $75.08 a barrel.
Gold closed 0.33% higher at $1871.10 an ounce.
This morning on the economic front we have a speech from ECB Member Schnabel at 10.10 am, followed by U.S. NFIB Business Optimism at 11.00 am. Next, we have speech from Fed Chair Powell at 2.00 pm. Finally, at 3.00 pm we have Wholesale Inventories.
Cash S&P 500
An ugly reversal at yesterday’s 3950 high print saw the S&P again fail to close above its 50 Day Moving Average. The main cause of the late sell-off was the Fed Officials hanging on to their hawkish beliefs. However, both the Dollar and Treasury Yields are not believing any of this hawkish rhetoric as both classes again closed lower. All eyes will be on Powell’s speech this afternoon. I am still flat the S&P as I continue to be a buyer on any dip lower to 3858/3876 with the same 3843 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 3894
EUR/USD
Unfortunately, the Euro never came close to yesterday’s buy level as the market continued to rally following Friday’s aggressive Key Day Reversal. The Euro is now trading 270 points higher from Friday’s 1.0480 low print. I am still flat. I will now raise my buy level to 1.0610/1.0680 with a higher 1.0545 ‘’Closing Stop’’.
March Dollar Index
Late in the session the Dollar traded lower to my 102.70 buy level. I am still long with a lower 103.15 T/P level. I will add to this position at 102.00 while leaving my 101.55 ‘’Closing Stop’’ unchanged. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Cash DAX
My DAX plan worked well yesterday. After the market hit my 14820 sell level we sold off to my 14745 revised T/P level as emailed to my Platinum Members and I am now flat. Given how overbought the DAX is trading I will again be a small seller from 14840/14920 with a 15005 ‘’Closing Stop’’. I still do not want to be long the DAX at this time.
Cash FTSE
I am still flat the FTSE. Despite the late sell-off in the FTSE the market never came close to yesterday’s buy range. I will now lower my buy level to 7570/7630 with a lower 7495 ‘’Closing Stop’’.
Dow Rolling Contract
Having hit a high at 33920 yesterday afternoon, the Dow was met by plenty of selling, falling 400 points from this high into the close. I did not see this move happening but I guess traders are nervous ahead of Powell’s speech at 2.00 pm. I will now lower my buy level to 33050/33300 with a lower 31795 ‘’Closing Stop’’. Despite the aggressive selling into the close I still do not want to be short the Dow at this time.
Cash NASDAQ 100
Buying the dip on the NDX is certainly working since the start of the New Year. Everyone had plenty of time to get long at or better than my latest 11075 long position. At one stage the NDX was up over 2.5% on the day, enabling me to cover my long position at my 11230 T/P level and I am now flat. Although both the S&P and Dow closed lower yesterday, the continued fall in Treasury Yields saw the NDX end the session with a gain of 0.62%. The NDX has support from 10880/11030 where I will again be an aggressive buyer with the same 10795 ‘’Closing Stop’’.
March BUND
After the Bund hit my 136.60 buy level, we had a small rally into the New York close, enabling me to cover this position at my 137.00 revised T/P level and I am now flat. The Bund has strong support from 135.60/136.30 where I will again be a buyer with a 134.95 ‘’Closing Stop’’.
Gold Rolling Contract
Despite the reversal in American Indexes, Gold held onto most of yesterday’s gains. I am still flat. I will not chase the market higher, leaving my 1832/1847 buy level unchanged ahead of Powell’s speech this afternoon. I will have a tight 1819 ‘’Closing Stop’’ on this position.
Silver Rolling Contract
No Change. Silver traded in a narrow range yesterday. I am still long at 24.00 with the same no stop policy. I will now lower my T/P level to 24.50.
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