After a volatile trading session in which Indies were slammed, U.S. equity markets reversed most of yesterday’s losses to close slightly lower on the day, led by the Dow fishing with a loss of 0.45%. Senator Joe Manchin (D-WV) recently rescinded his offer to the White House to support a $1.8 trillion Build Back Better plan – indicating that the legislation may be dead in the water and possibly weighing on economic growth. Goldman Sachs’ (GS) rate-hike forecast also weighed on technology stocks. The brokerage firm said the Federal Reserve will likely raise rates four times in 2022, marking an increase from its prior forecast of three. On the flip side, U.S. Wholesale Inventories rose more than expected in November, signalling warehouses were able to better restock items despite ongoing supply-chain disruptions, contributing to some economic growth last quarter in the process. Within the S&P 500, 3 of the 11 sectors finished higher. European Markets closed lower. Sentix’s Euro-Zone investor confidence data for January came in stronger than anticipated due to a recovery in sentiment surrounding the current economic environment. European Central Bank Board member Isabel Schnabel said it may need to take action to combat inflation if energy prices continue to increase. The German government is reportedly working on strategies to alleviate rising energy costs and inflation. European Union COVID-19 inoculations increased to 744.9 million through yesterday, with more than 68.6% of its residents fully immunized. In Asia, The China Securities Regulatory Commission said it will allow eligible Beijing Stock Exchange companies to apply for a listing on the technology-heavy STAR market. The China Central Commission for Discipline Inspection said it was investigating the chairman of China Life Insurance as part of an anti-corruption probe. Meanwhile, investors are waiting to see if the Bank of Korea will raise interest rates following its monetary policy update on Friday. Elsewhere, Oil fell 0.85% on news that the number of Omicron cases are rising despite OPEC’s comments that the new variant will only have a mild and short-term impact on crude demand, while Bitcoin fell 3% as investors shifted away from riskier assets in favour of value plays.
To mark my 2450th 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 141 points yesterday and is now ahead by 214 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 0.14% lower at a price of 4670.
The Dow Jones Industrial Average closed 162 points lower for a 0.45% loss at a price of 36,068.
The NASDAQ 100 closed 0.14% higher at a price of 15,614.
The Stoxx Europe 600 Index closed 1.1% lower.
Yesterday, the MSCI Asia Pacific Index fell 0.2%.
Yesterday, the Nikkei closed 0.2% lower at a price of 28,478.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% higher.
The Euro closed 0.3% lower at $1.1325.
The British Pound closed 0.1% lower at 1.3575.
The Japanese Yen rose 0.3%, closing at $115.22.
Bonds
Germany’s 10-year yield closed three basis points higher at -0.03%.
Britain’s 10-year yield closed one basis points higher at 1.19%.
US 10 Year Treasury closed one basis points lower at 1.76%.
Commodities
West Texas Intermediate crude closed 0.85% lower at $78.23 a barrel.
Gold closed 0.1% higher at $1,801.10 an ounce.
This morning on the Economic Front we have a speech from ECB President Lagarde at 10.20 am. This is followed by U.S. NFIB Business Optimism Index at 11.00 am. Finally, at 3.00 pm Fed Chair Powell Testifies before Congress on the Economy and Monetary Policy.
Cash S&P 500
It is so difficult to have fixed stops in U.S. Indexes especially when you are long the market. Both the S&P and Dow were trading well below their respective 50-Day Moving Averages before a vicious rally in the last two hours saw the S&P rally over 90 Handles and in the process almost see the 50-Day MA re-captured (4675) as yet again anyone short the S&P had to be quick to take your gain. After I bought the S&P at a price of 4640, I was stopped out of this trade at 4619, before we hit a low of 4581. Subsequently, the S&P rallied in a vertical line into the close. It will interesting to see what Powell says this afternoon in his Testimony before Congress. Recent history suggests that the S&P will rally over the coming days given the ferocity of the rally into the close. The S&P has support from 4630/4645 where I will again be a buyer with a 4615 stop. I no longer want to be short the S&P at this time. If I am taken long I will have a T/P level at 4659.
EUR/USD
The Euro traded lower to my 1.1300 buy level before having a small rally into the New York close, enabling me to cover this position at my 1.1326 revised T/P level and I am now flat. The Euro has strong support from 1.1240/1.1290 where I will again be a buyer with a 1.1195 lower stop. I do not want to be short the Euro at this time.
March Dollar Index
The Dollar again rallied to my 95.95 T/P level on Friday’s 95.70 long position and I am now flat. The Dollar has short-term support from 94.90/95.40 where I will again be a buyer with a 94.45 tight stop. If I am taken long I will have a T/P level at 95.70.
Cash DAX
My DAX plan worked well with the market trading lower to my 15770 buy level before rallying to my 15850 T/P level and I am now flat. Considering the damage inflicted earlier in the U.S. Indexes the DAX held in well and the positive price action is the main reason I do not want to be short the market at this time. The DAX has short-term support from 15680/15760 where I will again be a buyer with a wider 15595 stop. If I am taken long I will have a T/P level at 15815.
Cash FTSE
My FTSE plan also worked well as the market traded lower to my 7430 buy level before rallying to my 7470 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 7380/7420 with the same tight 7345 stop. I no longer want to be short the FTSE at this time.
Dow Rolling Contract
The Dow got hit hard yesterday, trading the whole of my buy range for a 35850 average long position before rallying nearly 400 points into the close. This move higher saw my revised 35940 T/P level executed and I am now flat. Yesterday’s aggressive move lower saw the 50 – Day MA (35821) penetrated before breaking back above this key pivot point into the close. Today, I will be an aggressive buyer from 35620/35820 with a lower 35445 stop. If I am taken long I will have a T/P level at 35980. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
The NDX traded the whole of my buy range for a 15360 average long position before reversing all of yesterday’s losses to close unchanged at a price of 15614. This move higher saw my 15450 revised T/P level filled and I am now flat. The NDX has had its worst start to a new year since the Tech Bubble burst in 2000, having fallen over 1400 points. Today, I will look to buy the market again on any dip lower to from 15380/15520 with a 15295 stop. Given the recent 10% fall in the NDX, I do not want to be short the market at this time.
March BUND
No Change. I am still a small buyer on any further dip lower to 169.00/169.50 with a 168.55 lower stop. If I am taken long I will have a T/P level at 169.90.
Gold Rolling Contract
Gold again traded in a narrow range on Friday. I still do not trust this market As a result I will not chase the price of Gold higher, despite Gold rallying 0.3% leaving my 1755/1770 buy level unchanged with the same 1743 stop.
Silver Rolling Contract
Silver again tested my 21.90 buy level before rallying into the close and I am still flat. I will now raise my buy level to 21.50/22.10 with a higher 20.95 stop. If I am taken long I will have a T/P level at 22.55.
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