Monday was an historic day for markets, and without sounding cliche “one of two halves”, highlighted by WTI (oil) seeing its 2nd biggest daily ever move. The day, sentiment, and market moves, turnaround in the last 40 minutes of cash equity trade after President Trump, in a CBS phone interview, said the war could be over soon, noting “I think the war is very complete, pretty much. They have no navy, no communications, they have got no Air Force”, and that the US is “very far” ahead of his initial 4-5 week estimated time frame.” Following these remarks, crude prices were hammered, with WTI and Brent hitting lows of . USD 81/bbl and USD 83/bbl, respectively, against earlier peaks of USD 119/bbl. US equity indices surged, and even closed in the green, with all sectors (aside from Financials and Energy) also reversing losses to close in positive territory. Despite already being firmer versus the U.S. Dollar, Antipodeans extended on daily gains, the Pound flipped to gains, while the Japanese Yen pared losses. All in all, the Dollar was smashed and went from notable strength to lower by 0.5%. In addition, Treasuries saw a notable bid as crude plummeted, with all attention now on Trump’s press-conference for 17:30EDT/21:30GMT, which was scheduled before the CBS interview remarks were released. Spot Gold also reversed to end the day with gains. For clarity, direction of trade entirely flipped in the last 40 minutes of trade, although the crude complex had already pared a decent chunk of its earlier losses given a couple of bearish reasons. As a reminder, WTI and Brent gapped higher at the open, given the weekend escalations in the Middle East war, and the continued closure of the Strait of Hormuz, but came off highs amid FT reports that the G7 is to discuss a joint release of emergency oil reserves in an emergency meeting on Monday. Note, in the meeting they discussed oil prices but did not come to an agreement but they are scheduled to meet again on Tuesday, but it is now not clear if this will still be on the agenda given the dramatic swings in oil prices seen after Trump’s comments. As you can imagine, Middle East/geopolitics has dominated the tape and likely will so for the foreseeable future as US inflation data this week will likely take a backseat given it does not incorporate the recent volatility. Elsewhere, Oil closed lower by 3% while Gold ended Monday’s session with 0.6% loss.
To mark my 3325th 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 625 points yesterday and is now ahead by 2623 points for March having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, 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 whe 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 0.83% higher at a price of 6795.
The Dow Jones Industrial Average closed 239 points higher for a 0.50% gain at a price of 47,740.
The NASDAQ 100 closed 1.32% higher at a price of 24,967.
The Stoxx Europe 600 Index closed 0.63% lower.
Yesterday, the MSCI Asia Pacific closed 0.4% higher.
Yesterday, the Nikkei closed 5.20% lower at a price of 52,728.
Currencies
The Bloomberg Dollar Spot Index closed 0.11% lower.
The Euro closed 0.05% higher at $1.1613.
The British Pound closed 0.15% higher at $1.3428.
The Japanese Yen rose 0.04% closing at $157.80.
Bonds
U.K.’s 10-Year Gilt closed 2 basis points higher at 4.59%.
Germany’s 10-Year Bund Yield closed 2 basis points lower at 2.84%
U.S.10 Year Treasury closed 4 basis points lower at 4.10%.
Commodities
West Texas Intermediate crude closed 2.79% lower at $88.36 a barrel.
Gold closed 0.63% lower at $5139.10 an ounce.
This morning on the Economic Front we have German Trade Balance at 7.00 am, followed by U.S. ADP Employment Data at 12.15 pm. Next, we have Existing Home Sales at 2.00 pm. Finally, we have a Three-Year Treasury Auction at 6.00 pm.
Cash S&P 500
Stocks fell sharply at the open but, as expected, snapped back throughout the day as volatility eased. The market got an extra bit of juice later in the day on headlines that the war may be over soon. The primary problem from a bullish standpoint is that today is a settlement date of roughly $15 billion in T-bills. The stats suggest there is about a one-third chance the market rises today, while two-thirds of the time it is down on settlement dates. It could be one of those days, I guess, where volatility overrides the settlement date, and we see a modest gain of 0.4%/0.5%, but again, the analysis has held up fairly well. From both an options and technical perspective, 6,800 is again an important level because once you get over it, the Index could easily return to 6,900, which is the zero gamma level. The other issue, of course, is that the USD/JPY cross-currency basis has been moving more negative, suggesting tighter Dollar liquidity conditions. This is in addition to the Treasury settlement data. So, the liquidity picture, as of right now, has not really changed, and in some respects it may actually be a bit worse. Again, the cross-currency basis could widen if there is a sense that oil prices are going to stabilise or move lower, but as of right now, I don’t think anybody can really say. Oil was obviously overbought, trading above its upper Bollinger Band with an RSI above 70, and support around the $80 mark seems fairly firm. So it could fall further, but I do not think it will be in the $60s again anytime soon. $80 oil is better than $100 oil, but still worse than $60, and a $20 increase in oil is still more than a 33% rise, which is not going to look good in the upcoming CPI report or at the gas station. It took a while and some nervous times as the S&P opened last night and went accelerated lower in the first ten minutes. I emailed my Platinum Members soon after the Futures re-opened that I had added to Friday’s 6771 position at 6638 for a 6704 large average position. As expected, the S&P had a large bounce off its 200 Day Moving Average tag at 6585 before accelerating over 200 Handles off this low into last night’s Chicago close. This move higher saw my revised 6721 T/P level triggered and I am now flat. The S&P has support below from 6698/6723 where I will again be a buyer with a 6669 ‘Closing Stop’. With the Fear & Greed Index again closing at 27 and the McClellan Oscillator unchanged I have no interest in pressing the downside. If I am taken long, I will have a T/P level at 6748.
EUR/USD
I am still long the Euro at an average rate of 1.1670 with the same 1.1695 T/P level. I will leave my ‘Closing Stop’ unchanged at 1.1575. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
My Dollar plan worked well as the market rose to my 99.60 sell level before trading lower to my revised 99.10 T/P level and I am now flat. Today, I will again be a seller from 99.50/100.20 with the same 100.95 ‘Closing Stop’. If I am taken short, I will have a T/P level at 99.00.
Russell 2000
My Russell plan worked well as the market traded lower to my 2430 buy level before rallying to my revised 2490 T/P level and I am now flat. This morning, the Russell is trading at a price of 2540. We have short-term support from 2410/2470 where I will again be a buyer with a 2355 ‘Closing Stop’. If I am taken long, I will have a T/P level at 2525.
FTSE 100
My FTSE plan worked well as the market traded lower to my 10100-buy level before rallying to my revised 10180 T/P level and I am now flat. Subsequently, the FTSE surged to a late high of 10380. The FTSE has short-term resistance from 10450/10550 where I will be a seller with a 10625 ‘Closing Stop’. I will wait for another move lower before looking to buy the FTSE. If this view changes, I will be back with a new update for my Platinum Members. If I am taken short, I will have a T/P level at 10360.
Dow Rolling Contract
The Dow traded in a near 2000 point range on Monday. The fact that Oil hit an overnight high at $119 before falling 35% just shows the incredible volatility that we witnessed yesterday. The Dow has support below from 46800/47100 where I will be a small buyer with a 46595 ‘Closing Stop’. If I am taken long, I will have a T/P level at 47420. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
My NDX plan worked well as the market traded the whole of my revised buy range for a 24110 average long position before rallying to my revised 24365 T/P level and I am now flat. The NDX has short-term support below from 24300/24500 where I will again be a buyer with the same 23975 tight ‘Closing Stop’. If I am taken long, I will have a T/P level at 25780. If any of these views change, I will be back with a new update for my Platinum Members.
December BUND
The Bund got hammered initially on Monday, hitting a low of 126.80 before rallying 140 points off this low into the New York close. The Bund has short-term support from 126.80/127.60 where I will be a small buyer with a 125.95 wider ‘Closing Stop’. If I am taken long, I will have a T/P level at 128.20.
Gold Rolling Contract
No Change: I am still flat. Gold has strong support below from 4650/4750 where I will be a strong buyer with a lower 4545 ‘Closing Stop’. If I am taken long, I will have a T/P level at 4920.
Silver Rolling Contract
No Change: Silver has now fallen over 20% from Monday’s high at 96.80. This is a huge move lower catching many long positions in the process. Today, I will continue to be a buyer from 73.50/76.00 with the same 71.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 79.35.
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